Marx Against Them Coming to America is tough. Coming to America from the U.S.S.R. is tougher. Then try starting a business...

BIZ Experiencess are evil.

That was the sort of thing you learned behind the Iron Curtainin the midst of the Cold War. That was the message drummed into theminds of Mikhail Kvitchko and Mikhail Markov as they grew up in the1960s and 1970s.

But it wasn't drummed into them enough. Now known as MikKvitchko, 43, and Michael Markov, 41, these two former Russiancomputer programmers are American capitalists in New York City,co-founders of Markov Processes International Corp., a technologyconsulting company for the financial services industry that hasprojected 1999 sales of a little more than $1 million, double whatthey made last year.

Not so long ago, if they were back in their homeland and hadmade a million dollars, they might have been shot. As Markov notes,"Millions of farmers were moved to Siberia in the 1920s and'30s for being more productive than their neighbors. Mygreat-grandfather was one of them." (Later, Markov'sgreat-grandfather was shot by the Nazis during World War II.)

Geoff Williams is a features reporter for The CincinnatiPost and a frequent contributor to BIZ Experiences. He haswritten for many other magazines, including LIFE andEntertainment Weekly.

Battling Prejudice

Even without Nazis, the Russian landscape was antisemitic whenMarkov and Kvitchko were growing up. Both Jewish, they weren'tallowed to attend the universities of their choices. They didmanage to go to college, however, and they did manage to get jobs,but not in the professions they'd studied for. It was the late1970s, and Markov, who grew up in a Ukrainian town calledZaporozhye, intended to be a mathematician. All he could find,however, was a job programming truck routes into a computer at atruck depot in Kharkov, a Ukrainian community with several collegesand "lots of factories," says Markov.

Kharkov was also where Kvitchko had been living all his life,but although the two met once at a conference, they were eachotherwise oblivious of the other, both living in a land where freemarkets and free exchange of ideas were not embraced.

Kvitchko had studied to be a mechanical engineer, but upongraduation, he became a punch-card operator. "It was not a jobfor [an] engineer," he says. "It was the lowest job youcould get."

And Kvitchko never would become a mechanical engineer. Heeventually became a computer programmer, and that's where hefound the first tremors of his BIZ Experiencesial awakening. "Wewere never taught BIZ Experiencesship, of course," says Kvitchko,"but I always dreamed about being able to do things on myown." And so he would create programs and give them away toanybody who wanted them. It wasn't true BIZ Experiencesship, butin the 1980s Soviet Union, it was as close as he could get. Anddangerously close, as far as the Russian government was concerned."Even this free distribution I had to do quietly," saysKvitchko. "I could have been suspected of running an illegalprivate business, and even prosecuted."

Is it any wonder they decided to leave?

Coming To America

Markov took his family out of the U.S.S.R. in 1989. With thehelp of several Jewish organizations, he, his wife, Faina, andtheir two children skipped from country to country for three monthsuntil they reached the United States.

But the family's arrival lacked a ticker tape parade or anysort of welcome wagon. With only $500 in his pocket, Markov set upcamp at a welfare hotel in Brooklyn Heights. "It was aterrible place," he shudders. Fortunately, his English was"decent," his computer-programming knowledge wasextensive, and he was a formidable mathematician. He landed a jobin just a few months.

The position he found was as a technological consultant to amoney management firm. Markov understood technology, but had noidea about finance. "In Russia, there's no such thing asinflation or investments," says Markov. "We're veryprimitive. They didn't even teach us these things inschool." He started spending his nights at a local bookstore.He couldn't afford to buy anything, so he stood in the aislesand read books on finance, improving his English and finessing hisunderstanding of the financial world at the same time.

Meanwhile, Kvitchko was also trying to carve his own niche, evenif that meant leaving Ukraine. "I came here with my wife andone of my kids to visit a distant relative, who invited us for anopportunity to see the United States"--in this case, he wasseeing Riverdale in the Bronx. But Kvitchko was thinking beyond avacation. Perhaps he could drum up some business with Americans andwork on projects for them from his homeland, he thought. "Iwas pretty naive," admits Kvitchko. "But my [naivete]disappeared quickly. Of course, I couldn't get in to seeanybody."

As the month-long visit drew to a close, Kvitchko had failed toturn his vacation into a business opportunity. "Of coursenothing's going to happen in a month," a friend of therelative told Kvitchko. "Why don't you stay with me for awhile and try for a little longer?"

Kvitchko was delighted--provided one thing: "Before Iagreed to his generous offer, I decided to find any job here.Something. Anything."

Any job turned out to be washing dishes in a cafe. Kvitchkoscrubbed dishes all day, and by night, he tried to improve hisEnglish. He could understand the language all right, but speakingit was another matter. So Kvitchko would read newspapers everynight, "trying to make sense of them." He would also porethrough the dictionary, writing down words on flash cards andmemorizing the meanings. "I still have the cards," hesays fondly.

Communist Capitalists

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

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

Once they were partnered, Kvitchko and Markov immediately wentto work creating a program called Style Advisor, whichcharacterizes investment portfolios to help financiers determinewhether certain investments are sound. They used this program toconsult what became their only client for a couple years, aNew York City money management firm called Balch, Hardy, Schienman& Winston.

The partners thought they were on track. Considering theircommunist educations, it's no wonder the thought never occurredto them that their only client might go bankrupt, but that'sexactly what happened. Before they had much time to lament theirmisfortune, however, one of the firm's partners decided tostrike out on his own. He bought the rights to Style Advisor andhired the Russians as his consultants.

Markov Processes was back in business--but not for long. Just afew months later, their client decided to hire in-staff computerprogrammers. Markov and Kvitchko again were without customers--andthey didn't own Style Advisor anymore. They had no client, noproduct...and no business.

So they again went to work, this time creating a new productthat analyzed the performances of complex pension funds andportfolios, as well as determined what type of investment decisionswere being made. But Markov and Kvitchko had no idea how to marketthe program, and worse, nobody understood the concept. The productwent 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 createsomething that ultimately did the same thing, only better. TheirStylus program analyzes changes in portfolios' values anddetermines the styles used to make those investments. It alsoassesses the work of funds' money managers.

And they wouldn't be thrown into a Siberian prison for doingit. 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 conceptimmediately--and liked what they saw. They were able to sell theprogram to a slew of companies, including Fidelity Investments,Charles Schwab and Bank of America.

But Markov and Kvitchko were still not exactlybusiness-savvy--"During some early sales pitches, they wouldargue with each other," recalls a colleague--and the businesswasn't turning profits. Markov was being supported by hisUkrainian wife, a financial executive; Kvitchko and his wife wereliving off their rapidly depleting savings. Kvitchko's wife didoccasional baby-sitting or housecleaning to bring in extra cash. Itwasn't until 1998 that the partners had their first profitableyear, but now those money worries appear to be gone for the timebeing. With a roster of 30 clients, Markov and Kvitchko can breatheat least a little easier.

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

"We are probably not typical businessmen," admitsKvitchko. "We want to live interesting lives, in terms ofhaving fun out of [a] job. I want to create new things; I want tobe able to learn new ideas and implement them in ways that neverexisted before. At the same time, I wouldn't mind being muchmore financially independent than I am now."

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

Contact Source

Markov Processes International Corp., info@markovprocesses.com