Building a life-changing startup, making your own marketing, and rejection + conviction: Kathryn Cross (Anja Health, YC W22)
Welcome to the fifth episode/edition of YC Founder Stories. I started this experiment curious to learn from the best founders who went to YC and take this opportunity to narrate their stories.
The Format: The interview is divided into two parts: 1) Q&A and 2) BONUS CONTENT. I’m still experimenting, so bear with me as I iterate. Let’s get started.
Today’s guest is Kathryn Cross from Anja Health (YC W22), which reimagines cord blood banking.
Kathryn previously founded Bridge Strategy, a management consultancy helping early-stage businesses grow their Gen Z consumer base, and worked at MIT Research Lab and Goldman Sachs.
Anja Health is helping pregnant parents save the most personal source of stem cells - from their umbilical cord and placenta - to unlock future disease treatments. Offering cord blood banking, cord tissue banking, and placenta stem cell banking.
Read on to learn more about Cross’s YC application and journey!
Prefer to listen to the interview? Just hit play or get it on Apple Podcasts or Spotify.
Q&A:
What is your startup idea?
We help pregnant parents keep stem cells from their umbilical cords and placenta via cryopreservation so that they can use it for future disease treatment of their children.
How did you come up with the idea?
My younger brother needed cord blood stem cells because he had cerebral palsy from a near-drowning accident. So I've always been adjacent to the space and known about the promise of cord blood stem cells.
As I've grown deeper and deeper into the space, I realized that cord tissue and placenta stem cells were also a really rich resource for future disease treatment. Most parents don't even know about the fact that you can save stem cells from all these different resources. So I wanted to create a more accessible and comprehensive option for parents.
When did you get into YC?
I went through the Winter 2022 batch, so I got in around December 2021.
What are the key elements to focus on when applying to YC?
Being concise. It's kind of interesting. Normally on podcasts, I go into a whole narrative, but because this is a YC-focused podcast, it's good to be on the more concise side.
For the applications, showing traction is always better. It's not necessary, but traction and then remaining concise are the most important for the application and the interviews.
Share your YC interview experience in 1-2 sentences.
My interview experience was short. All the interviews are short. You really just have to kind of have your concise answers at the ready and be ready to respond to pretty much anything.
How did YC help you go from 0 to 1 to N?
Bookface and access to the partners helped a ton. There's so much information at the ready that they can personalize whatever issue you're facing.
I think fundraising was probably one of the ways that YC was most impactful. They have a lot of resources in Bookface on how to reach out to folks and who to reach out to.
Share a “do things that don’t scale” story in your startup journey.
I’ve been making eight TikToks a day for nine months - and I'm still kind of doing it.
How did you get your first 1,000 users?
By making eight TikToks a day for nine months. 😉
Share 3 tips for founders who are trying to get into YC.
Plan to have really fast progress: Every chance that you get to check in with someone at YC, you should have a progress update.
Chat with other YC founders if you're going to do practice interviews.
Don't doubt the value that YC has: This is a hot take, but I think my least favorite question from prospective founders is if YC is worth it. It never hurts to apply and it obviously has a ton of value.
How was the Demo Day experience?
Very fast. You present one slide and then you get some follow-up.
I think it's prudent for folks to have a fundraising process already going by the time Demo Day comes around. So Demo Day should just kind of be the cherry on top.
BONUS CONTENT: Deep insights, more tactical advice, and an open discussion.
Talk to me about how much of a struggle is for you to educate parents.
Really accessible social media content is super helpful. Engaging with the community, especially through personal comments so that it feels really personal is really great.
Beyond that, it's meeting parents where they are. There's quite a variety of people that come across us, especially if they're from a less health-educated background, then we definitely have slightly larger hurdles to overcome.
We get some folks that are just kind of skeptical in general about American healthcare. But in those cases, especially, we have a lot to explain to them. So yeah, it's just sort of meeting them where they are in terms of health education level, whether that be with their providers or online.
What are the biggest gaps you’re seeing in educating parents and how does Anja Health fill that gap?
Yeah, I would say the biggest gap is finding parents that might be more prone to taking risks and still trying to get them to understand the value of cord blood banking and placenta banking and cord tissue banking as well.
Some parents do think that they can deal with whatever happens. In those cases, I tell them about my personal family story, where we didn’t have a history of disease and nobody anticipated that things could go wrong.
But then because of a freak accident, my brother developed cerebral palsy. My parents always wish that they had additional safety nets. And so I think cord blood banking really is able to provide that.
It's really just about letting parents know that even if they are alright with taking risks, this is still a good option to have because freak accidents happen where they would suddenly need cord blood stem cells and not have them.
How do you show parents the importance of Anja Health?
I usually tell them my family story. I think that really puts it in perspective for families. I also try to get to know them and their personal preferences, if they are a more risk-averse or not.
And I talk to them about all the different use cases and their potential use cases. There's pretty much always some sort of relatable use case, even if the family has no history of disease.
For instance, cord blood stem cells and placenta stem cells have been used for general anti-aging purposes or sports injuries.
So in those cases, your family doesn't even need to have a history of disease or even a future of disease, but you just need to know that this opens up potential options for your family in the future when it comes to their healthcare.
It doesn't even have to be the most dire use cases, but it could just be an additional option. It's adding on an additional checkbox for you that you can look at a stem cell treatment.
What does the biggest chunk of your audience look like?
With families that test for certain genetic diseases, such as sickle cell anemia, we have a partnership with a company called Billion to One, where they will actually cover the cost of cord blood banking with them.
In those cases, I would say like definitely look at cord blood banking as an option because you can most probably use the cord blood stem cells within the first year of your baby's life. So there's a very immediate possibility.
Talk to me about Anja’s business model.
We have a kit that parents can buy and that they can bring with them to birth. It contains all the materials that they need to collect stem cells. So that's $199. Then starting one month after birth, storage payments start. So it depends on what you've decided to store, but you can store the cord blood, cord tissue, or also the placenta.
The most popular is doing all three because then you get the greatest volume and variety of stem cells. So depending on that, it's $49, $79, or $99 a month and it covers 20 years of storage, but you only pay for eight years.
So that way they're essentially 12 years with no payments and then you can choose to renew and you can also choose to pay. Some of those payments are more upfront if you'd like; you can pay 20% of it upfront for a discount or you can pay all of it up front for an even greater discount.
How did you convince YC to invest in you during the interview?
YC was really interested in the possibilities of research around this. They asked me a lot about the history of research with cord blood, cord tissue, and placenta stem cells and the future of it.
They inquired about my personal experience. Since team is really important to YC, my family's connection to the industry was really crucial. It was quite science focused.
Surbhi, one of my partners, was a young female solo founder as well and she has exposure to motherhood, as well as the women's healthcare space. So she knew that the business was scalable. It was just a matter of vetting the science.
When you got rejections, what were the things that they didn't believe in that you had a strong conviction towards?
Most rejectors either didn't understand the science or didn't believe that it could be applied to a scalable business. Sometimes, they had talked to parents who didn't move forward with this, because they were alright with taking the risk or they couldn’t afford it.
And so if they met parents that hadn't done this, then I think that cast some doubt on it. However, most of them just didn't feel confident enough in the science or they themselves didn't feel like they were scientifically inclined enough to understand the science.
So yeah, a lot of it was around like the science behind the company.
Since Alexis Ohanian from Seven Seven Six is an investor in Anja Health, how is the experience working with him?
He has a really amazing network. So if he himself doesn't know the answer to something, then he'll refer out to his network to find you the answer, which I think is really valuable.
I also really appreciate that he drives his own VC fund with metrics. So he tweets a lot about this, but they have Cerebro, their part note-taking app, talent directory, and message board, and they track a lot of metrics.
So there are all these different metrics that allow them to really hold themselves accountable to making sure that they are providing value constantly. So I really respect that about him and just Seven Seven Six in general. He just tries to be super founder-friendly.
He's not one to follow signal or noise. Honestly, he moves forward with what he believes is right and so I really respect that about him too.
How did you prove that your product was successful and how did you go to market and scale that up?
A lot of setting up the supply chain happened before YC, but that was kind of the first step. Then it was about really like micromanaging a lot of our user experience and having constant touch with our users.
I was the one managing our customer service for the first 200 customers. So I think that was really crucial to me learning about the user experience.
I think the founder should be doing everything themselves first before hiring for it. Then when you hire for it, you should try to hire someone that can do it better.
That was pretty much my approach to scaling and thinking about the team. And of course, we put out a lot of media.
I previously ran a consultancy for small businesses and startups. And my first recommendation was always to get online and start talking.
People love to relate to the founder themselves and more deeply understand the ethos behind the company. I took the advice that I gave all of my clients and just started making my own media.
How do you keep up with the competition when you create content as well as your own competition in healthcare?
The way we differentiate from our competitors in the industry is price, since we're about 30% cheaper. We also offer payment options.
Our information in general is more accessible. Additonally, we do manual processing of the stem cells, which allows us to personalize the approach and even maximize stem cell count.
With community and media, that's a large part of the really accessible information piece too.
Just the concept of like being able to freeze your umbilical cord and placenta for its stem cells is so novel that I actually don't feel like I have to do too much to spruce up the content. That in itself is just such a new concept to so many people that it almost inherently has a sense of novelty baked in.
What is an ambitious goal you're chasing?
The ambitious goal is to touch 10% of births in the US. I want to get to a point where 10% of people that are giving birth every day are at least considering the option of cord blood banking.
I think so many parents give birth and never even hear about it. So I feel like if we could even make sure that everyone at least hears about it and is exposed to it to some degree, then we're able to really progress.
Any closing thoughts before we wrap up?
I would just say even if it doesn't seem like the products you're building are impactful, you never know what kind of a difference it could make. For Brianne Kimmel, games comforted her a lot when her dad was sick and then, years later, when a gaming founder pitched her, she knew the importance of games in making her feel alive.
So yeah, I would say even if it doesn't seem like it's that impactful, like it's still impactful.
Thank you for sharing, Kathryn! Where can people find you?
That’s it for today. I have some awesome founders lined up for the next episodes, and I can’t wait to bring them to your inbox.
Meanwhile, if you like this interview, please share it with your founder friends - nevertheless, grateful for your time 🙏🏼
Let me know your thoughts and suggestions in the comments below 👇🏼