Marx Against Them

By 1990, Markov was successful enough as a consultant that he began his own company, Markov Processes, and started consulting to financial firms. A year later, he'd grown his business enough that he was looking for a partner. In 1992, a mutual friend introduced Markov to Kvitchko, who was also working as a consultant.

Kvitchko had washed dishes for two months, and then segued into a job at AT&T. An atypical segue, yes, but Kvitchko had been a dynamic force in the the world of computer programming in his homeland, as a few of his friends argued when talking to managers at AT&T.

Once they were partnered, Kvitchko and Markov immediately went to work creating a program called Style Advisor, which characterizes investment portfolios to help financiers determine whether certain investments are sound. They used this program to consult what became their only client for a couple years, a New York City money management firm called Balch, Hardy, Schienman & Winston.

The partners thought they were on track. Considering their communist educations, it's no wonder the thought never occurred to them that their only client might go bankrupt, but that's exactly what happened. Before they had much time to lament their misfortune, however, one of the firm's partners decided to strike out on his own. He bought the rights to Style Advisor and hired the Russians as his consultants.

Markov Processes was back in business--but not for long. Just a few months later, their client decided to hire in-staff computer programmers. Markov and Kvitchko again were without customers--and they didn't own Style Advisor anymore. They had no client, no product...and no business.

So they again went to work, this time creating a new product that analyzed the performances of complex pension funds and portfolios, as well as determined what type of investment decisions were being made. But Markov and Kvitchko had no idea how to market the program, and worse, nobody understood the concept. The product went nowhere.

By 1996, the two men had clued in to capitalism in a big way. They didn't have their Style Advisor, but they could create something that ultimately did the same thing, only better. Their Stylus program analyzes changes in portfolios' values and determines the styles used to make those investments. It also assesses the work of funds' money managers.

And they wouldn't be thrown into a Siberian prison for doing it. For perhaps the first time, it dawned on Markov and Kvitchko: Here in America, competition is encouraged. Who knew?

And what's more, companies understood the concept immediately--and liked what they saw. They were able to sell the program to a slew of companies, including Fidelity Investments, Charles Schwab and Bank of America.

But Markov and Kvitchko were still not exactly business-savvy--"During some early sales pitches, they would argue with each other," recalls a colleague--and the business wasn't turning profits. Markov was being supported by his Ukrainian wife, a financial executive; Kvitchko and his wife were living off their rapidly depleting savings. Kvitchko's wife did occasional baby-sitting or housecleaning to bring in extra cash. It wasn't until 1998 that the partners had their first profitable year, but now those money worries appear to be gone for the time being. With a roster of 30 clients, Markov and Kvitchko can breathe at least a little easier.

But the partners aren't as interested in money as they are freedom. "My vision is to be a team of people who can implement ideas," says Markov. "What's good about the company is when you have an idea, you can do it. You can take it and implement it in the best possible way, and we take pride in what we do."

"We are probably not typical businessmen," admits Kvitchko. "We want to live interesting lives, in terms of having fun out of [a] job. I want to create new things; I want to be able to learn new ideas and implement them in ways that never existed before. At the same time, I wouldn't mind being much more financially independent than I am now."

They may not be full-fledged capitalists yet. But they're learning.

Contact Source

Markov Processes International Corp., info@markovprocesses.com

This article was originally published in the November 1999 print edition of Entrepreneur with the headline: Marx Against Them.