1. A
s a skier,Allen Ruszkowski, President
& CEO of CVAC Systems, Inc., looks
for the challenge of the ‘Double Black
Diamonds’ because they provide the exhil-
aration of succeeding where others are
afraid to go. He has always been drawn to difficult chal-
lenges, and finds great reward in his ability to consis-
tently succeed in them. He is a cum laude graduate of
our country’s number-one rated engineering college:
Rose-Hulman Institute of Technology, Terre Haute,
Indiana. In 2005, for the 7th consecutive year, Rose-
Hulman scored ahead of prestigious colleges and uni-
versities such as the U.S. Military Academy, U.S. Naval
Academy,U.S.Air ForceAcademy and Cal Poly-San Luis
Obispo in U.S.News andWorld Report's annual 'America's
Best Colleges' guidebook. Allen also earned his MBA
from San Jose State University in 1996.
Allen’s 29 years of highly successful entrepreneurial
medical device industry experience includes 11 years
at GE Medical Systems. Allen’s track record of success-
es in business tells the story of character, vision, com-
mitment, passion and persistence.
In 1976, Allen joined GE and was soon recognized
for his leadership skills. He was ranked #1 and hand-
picked from a 2,000-person organization to develop
and manage one of the most challenging strategic
issues of the General Electric company—the service
business for the then-new Magnetic Resonance Imaging
(MRI) business. He conceived, developed and imple-
mented a pre-Internet dial-up network linking each GE
MRI scanner with headquarters. Branded ‘GE InSite’,
the network improved service quality and saved GE
hundreds of millions of dollars in annual service costs.
The system is still recognized by the industry as a cur-
rent benchmark of excellence. Allen’s perspicacious
nature provided the vision for GE’s success in MRI—
the only cryogen service contract that was independ-
ent from the magnet manufacturer.
C y c l i c V a r i a t i o n s i n A l t i t u d e C o n d i t i o n i n g ™
CEO Profile
1Q 2006
“The availability
of oxygen and
removal of
toxins are
fundamental to
life itself. We
are going to
bring this
amazing
technology to
everyday health,
because CVAC
can have
profound
benefit for
anyone who
experiences the
limits of human
performance,
whether it is a
result of athletic
competition,
the aging
process, or
sickness. I see
CVAC as a
disruptive
technology in
health care—
producing
benefits way
beyond those of
MRI. That is
why I have
taken all I have
learned and
accumulated,
and have fully
invested them
in the success
that will be
CVAC,” says
Allen Ruszkowski.
Meet the
‘Double
Black Diamond’
Entrepreneur…
ALLEN
RUSZKOWSKI
by Mary A. Steinman
Taking his FirstWorld Championship
‘Double-Diamond’ Run
Early on, Allen concluded that the superconducting magnets at the core
of the MRI platform were going to fail, and that GE should be prepared to
fix them. Allen recounts, “On the other hand,my competitors erroneous-
ly concluded that magnets would never fail. We were all buying the same
magnets.”
After developing a basic service contract to maintain GE’s MRI
machines,Allen also invented an optional service contract called a‘cryogen'
contract.“No one else had one,” he explains.“My competitors said that
this was another example of how GE was gouging customers on service--
charging $80,000 a year to put $12,000 worth of liquid helium in the mag-
net.They told their customers to buy the helium and fill the magnet on
their own when it was needed, and that magnets will never fail anyway, so
they shouldn't worry about it. We shipped our first units in late '84 amidst
this tremendous controversy.”
Allen would tell potential buyers,“Diagnosing an MRI magnet quench is
easy, much like electing a Pope. When you hear a rumbling sound and the
screens turn 30 degrees you know that the magnet is quenching. If there
is a white cloud three football fields long coming out of the hospital's heli-
um vents, you know it is a white quench. You then order $40,000 worth
of liquid helium. But, if that cloud is black, you also order another million-
dollar magnet to replace the one that has burned. I was accused of using
scare tactics.”
Then, in March 1985, magnets started having black quenches. The first
GE customer experienced a black quench at two o'clock on a Friday after-
noon. “We had them back up and running before noon the following
Monday,” says Allen. “Our competitors relied on the magnet manufactur-
er, so they couldn't even install a magnet on their own, and their magnets
were down for 3-6 months. Our market share climbed from 30% to 70%
within two months of the first series of black quenches because $80,000
for a cryogen contract became recognized as the necessary low-risk thing
to do. We ended that year with 80% market share and $200 million in
sales. “We then raised the price from $1.6m to $2.4m to sell off 10 points
of market share to avoid being regulated as a monopoly. The next year it
was a $400 million business, and GE still dominates the multi-billion dollar
MRI market today.”
Conquering, but Still in Quest of‘Double-Diamond’ Runs
In 1988, after the phenomenal GE MRI success, Allen joined a cash-
strapped venture capital-funded start-up MRI company in Silicon Valley
headed by EVP Jerry Knudsen, who takes credit for hiring Allen into GE
Medical.Subsequent venture financings were led by Dick Kramlich,the leg-
endary founder of New Enterprise Associates. Dick had commented to
Allen,“I can see your success by looking at the cash sheets.” Starting in
Operations, Allen transitioned into heading up international sales and mar-
keting. Allen passionately asserts,“In a small company,focusing on the right
opportunities is vital.” He conceived and executed a focused marketing
program to penetrate the Chinese MRI market, which culminated in an
agreement with the Ministry of Health of the PRC to place one of their
MRI scanners into each of the more than 2,000 county hospitals. GE
Medical acquired that business.
In 1994, Allen joined Imatron,a public company that competed with GE
and Siemens in the CT scanning market. Lew Meyer,the GE MRI customer
who experienced their first black quench and the amazing repair, had
recently become its CEO. Imatron's competitive position was tough—its
product cost twice that of its competitors, and had very limited perform-
ance. Allen accepted the challenge to be Director of International Sales
and Marketing,and subsequently was promoted toVice President of Global
Sales and Marketing. During his 5-year tenure, investors received a 25x
return. GE Medical acquired Imatron for $300 million.