(Re) Writing Code

Some days, the company's Russian-based expertise makes Relativity seem like an organization with a Russian brain and an American face -- like two teams working across different cultures, across different spoken and machine languages, and across half the globe. At Terekhov's telecom company, 65 of his 160 employees work full-time on Relativity projects. In the United States, another 10 Russians work full-time out of Relativity's North Carolina headquarters. Sasha Aprelev, for example, spent six months working with National City Corp., a Cleveland-based bank that operates in five states. A 23-year-old hotshot who started working for Terekhov at age 13, he helped the bank move private-client accounts to the Web so that tellers could access information faster.

Given that an estimated 200 billion lines of COBOL code are now in use worldwide, and that at least two-thirds of corporate data now resides in mainframe computers (rather than on servers), the prospects for selling RescueWare seem bright. Relativity already has 40 customers. But for now, the company is sitting on a lot of overhead -- and banking on future sales. It has 200 employees (including the Russian programmers), 10 sales offices, and a huge bill for phone calls to St. Petersburg. Sales per employee in 2000 came to only $50,000. Even with projected 2001 revenues of $20 million, sales per employee would be just $100,000.

And Relativity's world is a moving target. Even as the company perfects version 6.0 -- which can translate old programs (or even newer programs, such as Visual Basic) into J2EE (the latest version of Java), XML, and Intel's Itanium platform -- another crew is working on version 7.0, which will serve the next generation of technology platforms.

Relativity is trying to act on lessons that Wadhwa and Erlikh learned during their days at First Boston and at Seer Technologies. Lesson one: Automate as much as possible. Any change made to a version of RescueWare becomes immediately accessible to all of Relativity's programmers. And every night, a computer automatically tests the software to ensure that there are no new glitches.

Another important lesson: Don't rush growth. For all of his enthusiasm about his company's technical achievements, Wadhwa understands the challenge of building a business. "Had I not been through the Seer crisis, Relativity would be a public company right now, and we'd be sweating," he says. "We're not an overnight success story, and we don't want to be. We've had nine years of struggle, and we're still working at it."

Rekha Balu (rbalu@fastcompany.com) is a Fast Company senior writer. She still has files on her office computer in WordPerfect 2.4. Learn more about Relativity Technologies on the Web (www.relativity.com).