Vets First Choice, Portland
7 Custom House St., Portland
CEO: Benjamin Shaw
Employees: More than 200 by end of 2015
Business: Online veterinary and prescription-management services
Revenue (2014): $45 million
Investment to date: $74.5 million in five rounds from more than 40 investors
Contact: vetsfirstchoice.com | (888)280-2221
Benjamin Shaw focuses calmly and steadily on his visitor during a recent interview at his Portland office. The only "tell" that there's intensity behind his quiet demeanor is the rhythmic shaking of his legs under the table.
After all, the CEO of Vets First Choice, an online pharmacy and prescription-management company for veterinarians and their pet-owner clients, has built a $45 million company in just five years.
"Ben is an entrepreneur through and through," says Kevin Bitterman, a partner at Polaris Partners in Cambridge, Mass. He's also an investor in and board member of Vets First Choice. "He's a big thinker, a visionary and is bold. He's one of the hardest-working CEOs I've ever seen. He sees profound opportunity to disrupt an industry."
In July, Bitterman and 32 others invested $52.3 million in Vets First Choice, bringing its total investment to date to $74.5 million in five rounds. Shaw says revenues have doubled each year over the past four years, and he expects another doubling this year. He plans to add 60 employees this year. The company also has been named several times to Inc. magazine's 5,000 fastest-growing private companies list.
But as Bitterman says, Vets First Choice brought a disruptive business model to an industry known for strong relationships between large manufacturers and distributors.
Shaw founded Direct Vet Marketing Inc., which is doing business as Vets First Choice, in 2010. The company has partnered with more than 12,000 veterinary practices to deliver pharmaceuticals, therapeutic diets and compounded medications to pet owners' homes, typically at competitive prices as it has more volume-buying power than a typical single veterinary practice.
"I think that the founding of Vets First Choice would be one of my proud moments," Shaw, 37, says of his career so far. "But this cat has nine lives. We defied a lot of odds out of the gate. There are huge, well-established industry relationships that are hard to break into."
He adds, "The regulatory dynamics are difficult because we're applying the practice of human pharmacy exclusively for veterinary medicine. Our patients don't have Social Security numbers or birth certificates. They have breeds. It was very challenging to fight through some of the fundamental infrastructure to do what we needed to do. It broke the convention of how things work."
While the notions of a central-fill pharmacy or technology-enabled prescriptions are not new, he says, it took the application of technology to make it work online in the veterinary world. His company broke into the business with persistence and perseverance. It demonstrated its services to a small group of customers, gained support, grew the company, gained more support and built up incrementally over time, he says.
"Our manufacturers have really embraced us and see us as an important part of the future of veterinary pharmacy," says Shaw. "So we've come a long way in five years."
He says the company in some cases is managing 150% of the pharmacy aspect of a veterinarian's practice. That includes the drugs the vet practice is selling on its own, as well as Vets First Choice helping bring back clients who were buying their goods elsewhere. Future services include reminding owners to refill prescriptions and helping them better manage their pet's health.
The company is operating around the break-even point, investing the appropriate amount of capital to grow at each stage, Shaw says. It is using the big investment from July to accelerate critical aspects of its service, including building the sales organization, providing account management services, building out technology and looking at business development opportunities, including acquisitions and at some point, expanding overseas. The company uses technology heavily for inventory control and other business aspects.
Bitterman says Shaw has been smart in surrounding himself with strong people. "The first thing that strikes you is deep, unparalleled knowledge about the industry and every facet of the business," he says.
Shaw says starting a business is hard and it takes courage. "If you're going to take that step, it's better to take bigger, well-calculated risks," he advises. "Set an expectation of what great looks like and surround yourself with that frame of reference."
He says deciding to make Maine his home stoked his entrepreneurial instincts. "It forces another level of creativity," he says.
With three majors at Bates College — political science, biology and environmental science — he wrote a thesis on how the nonprofit research community in Maine was able to effectively leverage facility funding to attract more research grants. He has served as a trustee of The Jackson Laboratory and Maine Huts & Trails.
Shaw knew early on that he had entrepreneurial leanings, and he especially respected veterinarians as small business owners and as medical practitioners.
"I had the opportunity to bear witness to that through my father's experiences at IDEXX. I grew up around the IDEXX business," says Shaw, whose father, David Shaw, founded IDEXX Laboratories Inc. in Westbrook. The two also run Black Point Group, a private investment partnership focused on life sciences, technology and other companies and which has invested in Vets First Choice.
"I like what we do," says Shaw of Vets First Choice. "This is the convergence of healthcare, technology, direct marketing and data services. It's really interesting."