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Taking leadership to heart

After six months of vacation, the 8-year-old had had enough.

Alex Zapesochny was ready to return to school, return to his life in Russia. His parents, however, had American dreams and had framed the trip to Zapesochny as a long vacation.

“I thought we had a perfectly good life. What did I know?” Zapesochny says. “That five people lived in one room; it seemed like a normal way to be. I had friends; I had family all around. It seemed like a perfectly fine place to me.

“I have all these memories of all these family members coming over and crying, and it seemed like too much for people just going on vacation. But somehow, I didn’t really put it all together.”

Assimilating into a new culture and life in America helped prepare Zapesochny for being an entrepreneur.

Today he leads one of Rochester’s fastest-growing privately held firms, iCardiac Technologies Inc. The firm’s revenues have grown more than 50 percent each of the last two years and the company has been profitable for quite a few years, leaders say.

The technology firm focuses on cardiac safety and respiratory studies. It was launched based on some three decades of research at the University of Rochester. The company ranked fourth on the 2016 Rochester Chamber Top 100 list of fastest-growing private firms.

Eight of the top 10 global pharmaceutical companies are its customers, including Pfizer Inc., which helped the company enter the marketplace. Brighton-based iCardiac has 185 employees including 120 in Rochester.

Zapesochny, 45, was born in the former Soviet Union, in Leningrad—now St. Petersburg. His family emigrated to the U.S. in the late 1970s.

Locating first in New York City, the family moved to Rochester in 1979 when Zapesochny’s father, a violinist, had an opportunity with the Rochester Philharmonic Orchestra Inc.

“Unlike many other Russian immigrants who come here, who usually are drawn by Kodak or Xerox, we were actually drawn to Rochester because of the cultural scene and the opportunity with RPO,” Zapesochny says.

An unlikely career
The things that most interested him growing up were history, philosophy and politics. Being an entrepreneur, especially a tech entrepreneur, was not something he could have predicted.

“Back then, maybe because we were from the Soviet Union, the sense was for my parents and their generation—at that point the Cold War was still going on—so for almost everybody I knew…their goal was ‘get into a big company’,” he says. “Entrepreneurship was not something that most Russian immigrants were thinking about a lot.”

He did see a touch of entrepreneurship growing up by watching other Russian immigrants assimilate into the U.S.

“The only thing that they did—because we came from a country where you couldn’t own properties—everyone was really into property ownership,” he says. “But they weren’t starting technology companies.”

He graduated from Cornell University with a bachelor of science degree in applied economics and management in 1993. He went on to law school at American University in Washington, D.C., graduating in 1996. Later he earned his master’s degree in international human rights law from the University of Oxford in England in 2010.

In 1996, he became a paid staff member of the Bob Dole/Jack Kemp presidential campaign.

“It was very interesting, and I thought it was great, but at the same time it did make me wonder what else was out there,” Zapesochny says. “There’s a lot of perception versus really doing something. I definitely felt (that with) politics and policy there was a lot of perception and not necessarily a lot of doing.”

Despite having no real experience in politics, Zapesochny, then 24, embraced his role and figured it out as he went, he says.

When thinking about what to do with his law degree, a class helped to point him in a direction. It was a course he did not plan to take.

“I was looking to do a litigation course, and because the civil one was all filled up, I had to take the criminal one, which I kind of saw as a bummer at that time because I didn’t see how I’d ever apply it,” Zapesochny says. “But I really liked it. It was a fascinating thing for me.”

In 1997 he began his first professional legal job, as a prosecutor in the Bronx County district attorney’s office. The experience was a strong dose of reality.

“For a prosecutor, it’s as crazy and exciting as the stuff you see on TV shows and the movies,” Zapesochny says. “It’s a very intense environment. It was a great first significant work experience because it does teach you to deal with a very skeptical audience…. it teaches you the importance of communication at all levels, and it was just a fascinating experience.

“You were dealing with very real things and gritty things and for a twenty-something-year-old what could be more fun?”

Joining Lenel
Returning to Rochester for a millennium party, he met the founders of Lenel Systems International Inc., a security systems supplier. Elena and Rudy Prokupets, also Russian immigrants, offered him a job.

“At first, I really didn’t take it overly seriously, but then something about that kind of stuck with me because it did seem like an unusual opportunity,” Zapesochny says.

He joined the firm in 2000 as general counsel and director of business development. It employed some 80 people. Zapesochny saw the opportunity as an incubator to learn as much as he could about business.

“It was interesting being part of the executive management team there, seeing how the company evolved and, because it was also growing fast, I was able to jump in and take on all sorts of responsibilities,” he says.

With his legal background, Zapesochny helped the firm’s leaders see the practical side of opportunities, but he soon learned risk is something entrepreneurs must embrace.

“For most people, a legal background might not be all that helpful to being an entrepreneur,” Zapesochny says. “It somewhat makes you think, or teaches you to think…about risk mitigation and to be risk averse. So it was funny to have that role while I was there.”

He picked up skills and leadership qualities he would later use as a leader. He learned how important it is that employees have a vision.

“It made me very much appreciate different elements of how to build a team, how to keep a good culture, the importance of over-communicating, the importance of making sure that everybody continues to be aligned with the same goal,” Zapesochny says.

It is also important that people know what is it about their jobs that is bigger than simply creating paychecks, he says. “What is it that we’re trying to really do? What are we trying to bring to the world that doesn’t exist?”

Lenel was purchased by United Technologies Corp. in 2005 for $440 million. Zapesochny remained there for a year before striking out on his own.

“I think that was a good transaction,” he says. “I wasn’t sure what my role would be, but I really liked it. I thought it was a very interesting company.”

Working in a large company was helpful to gauge his personal progress, he says.

“My initial goal was, let’s see what it’s like, and I want to stay at least a year so I really give this a chance, and it was fascinating,” he says. “That year was also a confirmation about how I had done things and how we had done things, and it served to be very helpful to me.”

After leaving Lenel, he and his childhood friend Mikael Totterman decided to go into business together, a dream they had had since middle school.

They, along with Mikael’s wife, Sasha Latypova, co-founded iCardiac in 2006. The couple had come from VirtualScopics Inc., so clinical trials and the medical industry were known to them.

Totterman is now CEO of Clerio Vision Inc., leaving iCardiac in 2014 to focus on the startup. He remains on iCardiac’s board.

“Because we had known each other for a long time, we knew that we would work very well together,” Totterman says. “He’s a phenomenal CEO. He has great leadership skills. (He) works very well across the organization … He cares tremendously about the success of the whole organization, obviously cares about the investors making money out of the projects but also making sure that it has a positive impact on the team.”

The friends continue to work together as Zapesochny is chairman and co-founder of Clerio Vision, which focuses on non-invasive refractive vision correction.

For Zapesochny, leading a tech startup in the medical industry was entering into complex and unknown territory.

“At first, I was open to all sorts of things, but of course I was hoping it was something I was familiar with,” Zapesochny says. “The health care field was not something I was familiar with.

Honestly I wasn’t totally comfortable with it at first, but two out of the three founders seemed to know what they were talking about, and I figured there’s other stuff I can bring to the table.”

Jay Baker, iCardiac’s chief financial officer, has seen Zapesochny’s career develop firsthand.

“I have watched Alex develop into an amazing CEO,” Baker says. “Alex started iCardiac with no experience in cardiac safety or running a company. He was a quick learner and really worked extremely hard to become one of the most knowledgeable CEOs in our industry.

Zapesochny leads by example and is extremely approachable. He routinely engages with employees and cares about them, Baker says.

“I think Alex has really found his sweet spot,” Baker says. “He is such a good CEO; he is right where he belongs. Our board, which has a number of very accomplished members, really trusts his judgment.”

Zapesochny became president and CEO of iCardiac in September 2014.

“The vision definitely changed in terms of what it was originally,” Zapesochny says. “With life sciences, when you go to venture capitalists, they have expectations that you’re going to be able to turn an event that will make 10 times their money down the road or at least that possibility.

“We had an obligation to make that a financial success, but on top of that what we all wanted to do was create an environment where people were passionate and happy coming to work.”

In August 2015, iCardiac acquired the clinical trials division of nSpire Health Inc. in Colorado, which expanded the firm’s offering to respiratory testing.

Jaimie Cole, vice president of technology, was among the first few employees hired at iCardiac. He has worked with Zapesochny for over a decade.

“Alex values creativity and innovation, and his leadership in this area has been a key contributor to our company’s success,” Cole says. “He encourages exploration of new ideas and the conversations that need to occur to properly rationalize those ideas.

“Alex is frugal and promotes a cost-conscious culture. I think all of us have seen the benefit of being mindful of how we spend money and how we can get things done without necessarily ‘buying’ the solution.”

Zapesochny is a proponent of the local startup community, Cole says. He and other founders of iCardiac were integral in establishing the High Tech Rochester Launchpad Program in 2013 for helping local software-based startup companies.

“His involvement in this has inspired me to look for ways to also reach out to the local startup community,” Cole says

Ready for change
Competition in the tech industry can come from anyone at any time. A company like iCardiac has got to be prepared for changes, Zapesochny says.

“One of the things that’s certainly different about this space (is) you know at any given day there’s some professor in Amsterdam that’s trying to develop something that’s competing with you, and you have to worry about it,” he says. “And that’s not the same thing, for instance, if you open a restaurant, if you’re doing something where you see it. Here you have no idea what may be coming at you and what big technology change out there might shift everything.”

The launch of iCardiac came at an opportune time for the founders as the U.S. Food and Drug Administration put forth new guidance for drug companies and testing in 2005.

The move clarified the market for the startup.

Getting a drug to the market is a complex process. Due to the high level of caution in the industry, drugs can get stalled or never approved depending on the degree of uncertainty around them. Even if they get on the market, if doctors or leaders have any misgivings about the drug, it can decrease the likelihood of being used.

This dilemma is what iCardiac is trying to remedy, since the uncertainty surrounding drugs can often be unfounded. The caution of the industry can sometimes be the greatest hindrance to helping those who truly need powerful and effective drugs.

Cardiac safety is applicable to most every drug, as any drug could potentially disrupt the heart’s electrical activity. That makes iCardiac highly sought after, he says.

Though his current role was hard to foresee for him, Zapesochny does have history with cardiac research. His grandmother was a cardiac researcher in Leningrad. The memory of visiting her at work continues to inspire his current role, he says.

“For me when I thought about this particular problem that exists with cardiac safety, I actually thought about my maternal grandmother,” Zapesochny says. “I remember the feeling of pride of how important that work was… this is the kind of area where if you succeed, the value is so much broader to the society that it seemed worth the risk.”

Navigating a career that spans politics, law and technology has been a welcome challenge. The opportunities have been a tribute to family members who have come before him who had little control over the direction of their lives.

“I think my background first of all changes my perception of what is risk—that risk versus reward equation—because it’s not just that I was born in the Soviet Union, but there were some pretty horrible stories with my immediate family,” Zapesochny says. “During World War II, about a third of the people in St. Petersburg starved to death, including many of my relatives.”

One grandmother narrowly escaped being in Poland and the Holocaust, and his other grandparents worked in Siberian labor camps. For Zapesochny, the stories of his family are in his mind when making career decisions.

“When I came over here (to the U.S.), I was always very cognizant of what their lives were like at the same time,” he says. In “Russia you almost marinate in your family’s stories and how difficult they were, and so that stayed with me. I would oftentimes think about where were each of my four grandparents at this exact same time in their lives and what would they think about how risky something sounds… ‘Oh you’re giving up a dental plan?’ It changes things quite dramatically in terms of what feels worth it.”

Fast growth
Today the company is expanding at a fast clip. Zapesochny expects to grow even faster in 2017.

“If I look at this company every year or two, it looks so different than the previous segments of time,” he says. “It’s almost unrecognizable in some ways.”

The firm plans to roll out a new platform that is compatible with wearable technology in April. It will allow the company to have more information on users to better monitor how the drugs are affecting them.

“Whenever you’re rolling out a brand-new platform that’s quite sizable and important, especially one that is really only useful in these big global studies, it’s really creating a third element of the company that is going to have all sorts of challenges,” Zapesochny says. “As well-designed as anything is, once it actually comes into contact with the real world there are always going to be unexpected things that we have to respond to.

“Our name is iCardiac but we had to go outside of the world of cardiac safety,” Zapesochny says.

“For us this is a huge move. It’s a very big market and because we already have the relationships and the experience and the global capacity, we actually think it will be a big success for us.”

A challenge for the firm continues to be spreading the word about the firm’s capabilities worldwide. So far iCardiac has been involved in some 300 cardiac safety studies that have led to getting 15 drugs on the market.

The process from development to testing to the marketplace takes time.

“We’re not the only ones, but we’re one of the companies that has figured out something about how to thoughtfully introduce technology-enabled change to clinical trials in a way where we can get it to be accepted and utilized,” Zapesochny says.

While ultimately opting out of a career in politics—except for his campaign for Monroe County legislator in 2005—Zapesochny, who lives in Brighton, feels he is able to effect change as an entrepreneur.

“I assumed that in order to try and do something positive for the broader world, that you needed to somehow be in public policy, politics,” Zapesochny says. “But in reality, not only does entrepreneurship offer those opportunities, but also oftentimes you get to do that without a lot of the headaches and the compromises that some of those other things, like being in the policy world or government, require.”

Technology has changed a lot since the company’s start in 2006. Zapesochny thinks the intersection of medicine and technology is only getting started. ICardiac is in a prime spot to take advantage of the precipice point, he says.

“It’s a great moment in time to be in this industry and to be a technology innovator in a clinical trials space.”

Alex Zapesochny
Title: President and CEO of iCardiac Technologies Inc.; co-founder and chairman, Clerio Vision Inc.
Age: 45
Education: B.S. in applied economics and management, Cornell University, 1993; J.D., Washington College of Law at American University, Washington, D.C., 1996; master’s of studies in international human rights law, University of Oxford, England, 2010
Residence: Brighton
Family: wife, Katie Wagner; daughter Marina, 13, and son, Max, 10
Hobbies: hiking, reading, watching movies and travel
Quote: “One of the things that’s certainly different about this space (is) you know at any given day there’s some professor in Amsterdam that’s trying to develop something that’s competing with you and you have to worry about it. … And that’s not the same thing, for instance, if you open a restaurant, if you’re doing something where you see it. Here you have no idea what may be coming at you and what big technology change out there might shift everything.”

2/3/2017 (c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.
 

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