Forever Labs didn’t get into Y Combinator the traditional way. The incubator hosts 100 companies at a time at two cohorts a year. About 14,000 startup apply each year. But not Forever Labs. “We didn’t apply. They weren’t even on our radar,” Clausnitzer said.
Clausnitzer and Katakowski met at Clausnitzer’s wedding in 2004 and became friends.
In 2015, the two of them were chatting on the phone. Katakowski was a research scientist at Henry Ford Health System and Clausnitzer was a manager of business development at American Express, and Katakowski told him research he was working on showed that mice who had been injected with stem cells lived longer and had fewer effects from osteoporosis.
“When we gave late-middle-age mice genetically-matched mesenchymal stem cells from young donors, we increased their life expectancy,” Katakowski told Crain’s.
At the time, Katakowski was about to turn 40, and he told Clausnitzer he thought it would be cool, and helpful, to bank his own stem cells for future use.
“He’s telling me that, and I’m getting excited. I was 38,” Clausnitzer said. “I like to joke that Forever Labs was born out of our own midlife crises.”
Like kids in old black and white movies saying “Let’s put on a show,” Clausnitzer and Katakowski said “Let’s start a company.” Forever Labs was launched late that year and Clausnitzer quit his day job. Katakowski quit his in 2017.
In 2016, Katakowski was on Hacker News, a social-media site affiliated with Y Combinator that focuses on technology and entrepreneurship. Someone had posted a link to a clinical trial studying the effects of using mesenchymal stem cells to treat stroke victims. The posting claimed that patients were experiencing benefits even months after their strokes, and Katakowksi posted that because of the therapeutic value of stem cells, he had not only banked his own stem cells but had co-founded a company to do the same for others.
“We were deluged with calls,” said Clausnitzer. Soon, executives at tech companies in Silicon Valley were flying to Ann Arbor to get their stem cells banked. One was Paul Bohm, an active angel investor and the creator of something called the Dropbox LANSync protocol, which syncs files on local area networks.
Clausnitzer and Katakowski were also invited to Silicon Valley, where they met with potential customers and pitched the benefits of stem cells. One presentation was before 50 techies at a big house in the valley.
“People started writing us checks,” said Clausnitzer.
Sam Altman was the CEO of Y Combinator in 2017. He heard about Forever Labs through the Silicon Valley grapevine and asked Clausnitzer and Katakowski if they wanted a spot in the next class. “We moved out there for three months, even though my wife was three months pregnant,” said Clausnitzer. “It’s amazing. Y Combinator takes you from zero to 100 miles an hour.”
(Altman is now the CEO of OpenAI, a lab co-founded with Elon Musk to conduct research into artificial intelligence.)
While at Y Combinator, Katakowski also made a one-hour presentation at Google headquarters.
There was enough interest that Forever Labs needed to find a Bay Area doctor to do the bone-marrow withdrawals and signed on Chad Roghair, who has a practice in Berkeley.
While the storage of stem cells from umbilical cords has been common since the 1990s, Forever Labs was the first company to store adult stem cells for future use, though several others have launched since. Clausnitzer says a four-year head start on the competition will continue to be an advantage, as well as three patents it has applied for and others it is working on. “We think competition is a good thing. It helps get the word out,” he said.
Other companies include Vault SC Inc. of Marietta, Ga., and BioCardia Inc. of San Carlos, Calif.
One of the patents Forever Labs has applied for covers the process for exponentially growing the number of a patient’s stem cells, something Katakowski calls dynamic incubation.
Clausnitzer said the company expects to pass the 1,000-customer mark early this year. One customer is John Bogdasarian, the president and CEO of the Promanas Group, a real-estate investment firm in Ann Arbor, who posted a YouTube video about banking his own stem cells and who provides stem-cell banking for all of his employees as a fringe benefit.
Forever Labs has two payment options. One is to pay $750 upfront and then $250 a year. The other is to pay a one-time payment of $5,000 with no annual fee.
Generally, customers tend to be in their 30s, but Katakowski said his 71-year-old father has had his stem cells banked. If he needs stem cells implanted when he is 80, for example, his 71-year-old cells will be more vigorous than his 80-year-old cells.
Currently, three doctors in Michigan do the procedure, in Brighton, Troy and Rochester.
Forever Labs has also started a pilot with Kirkland, Wash.-based Sono Bello, which runs a national chain of liposuction facilities. Fat also has high concentrations of stem cells. Doctors at a Portland, Ore., facility will let liposuction patients know about Forever Labs and see if they are interested in having a bone-marrow procedure as well.
If enough of them are willing to pay for it, Clausnitzer said Forever Labs will sign a contract with Sono Bello.
Contact: [email protected] (231) 499-2817; @TomHenderson2