Headquarters | This facility, located at 34 Dutch Mill Road, houses Transonic Systems' manufacturing, R&D, sales, marketing and support staff

Courtesy of Transonic Systems

Headquarters | This facility, located at 34 Dutch Mill Road, houses Transonic Systems' manufacturing, R&D, sales, marketing and support staff

February 26, 2018

CEO of Ithaca-based Transonic Systems Talks ‘Disruptive Change,’ Cautions Against IPOs

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Interested in having your own startup? An Ithaca-based company with annual revenues of $20 million and subsidiaries in the Netherlands, Japan and Taiwan is here to give you the inspiration you need.

Researchers and clinicians seek reliable quantitative data to make informed decisions about patients and experiments. Transonic Systems aids in this process by producing diagnostic and research measurement equipment. Cornelis J. Drost, CEO and president of Transonic Systems, discussed his inspiration behind creating the business. After working for 10 years as a research associate in the Cornell College of Veterinary Medicine, Drost realized that there was a need for improved measurement tools in the worldwide market of animal studies.

“More accurate flow measurement tools for chronic animal studies (where one animal may be used at its own control during the course of a chronic study) reduces the number of animals needed to answer questions on physiology, drug efficacy and such,” he said. Building on the research he did at Cornell, specifically developing innovative bloodflow measurement technology, Drost said that he wanted to create a company that could carry this patented technology outside Cornell and into other life science researchers’ labs.

He aimed to do just that by founding Transonic Systems in 1983. Prof. Alan Dobson, biomedical sciences, who taught at Cornell from 1964 to 1995 and died in 2017, was the founding director of the company. Drost talked about the impact of the company’s first technology. “Our Cornell University flow measurement technology has become the worldwide gold standard for chronic and acute animal studies,” he said.

Drost also talked about other product lines which have become successful. “We expanded our early Cornell University technology with ultrasound indicator dilution measurement,” he said. This development has led to improved measurement of patient cardiac output and dialysis access flow. “An estimated one million such measurements are made per year with Transonic hardware,” said Drost.

Drost also discussed the size and scope of Transonic Systems’ target markets.

“Blood flow measurement in life sciences has many niche markets, from $5 million per year for flowmetry in animal studies, to $600 million per year for the central hemodynamic monitor in the [operating room/intensive care unit]” he said.

Drost believed his company has made an important contribution in advancing innovation across the life sciences industry.

“All our products start as innovations – we initially sell these to the innovators/early adopters in the various life science disciplines who then help us to bring about a disruptive change,” he said.

Faster than the speed of sound | This T101 Ultrasonic Bloodflow Meter was Transonic Systems' first commercially available flowmeter

Courtesy of Transonic Systems

Faster than the speed of sound | This T101 Ultrasonic Bloodflow Meter was Transonic Systems’ first commercially available flowmeter

Drost discussed how Transonic Systems has continually adapted in the face of competing technologies.

“Once a market segment has been made successful by us, me-too competitors pop up, growth slows down, and the company (or part of it) needs to restructure into a sales organization,” he said. According to a talk Drost gave at Cornell in 2013, Transonic Systems has an annual growth rate of 6-8 percent.

Transonic Systems is a privately held company, meaning that it does not issue stock on public stock exchanges. When asked about the potential for a Transonic Systems IPO, Drost was firm in his answer, reiterating that “they are strong believers in organic corporate growth.”

Drost offered advice for Cornell students aspiring to be entrepreneurs.

“If at all possible, grow your company organically: you will have the advantage of adjusting your plans according to ongoing successes and failures. Many start-ups that follow the IPO route will end up over-promising on one trajectory, and be locked in on that trajectory,” he said.

Aside from talking about the pitfalls of IPO-oriented growth strategies, Drost emphasized passion over profit. “Follow your technology innovation dream, don’t follow a get-rich quick dream,” he said.