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Why Mechanical Orchard is different

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Marcos Ortiz
February 10, 2024

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Hey Data Geek.

Two days ago (February 8, 2024), I was reading a very interesting post on LinkedIn from Jake Saper, a General Partner at Emergence Capital (one of my favorite Venture Capital firms out there) where he explained one of the compelling reasons why Mechanical Orchard is the last investment of the firm:

I was shocked to learn how much of our economy still runs on mainframes. Applications written in dying languages like COBOL and sitting in aging on-prem servers still power every flight you book and every credit card you swipe.

The brittleness of these systems drives outages like Southwest Airline's 2022 meltdown. It's been hard to sort through the spaghetti code to modernize these apps.

Until now. Rob Mee and the team at Mechanical Orchard are leveraging this GenAI to get these critical apps into the cloud and help harden our economy. In one year since founding, they're grown to double digit recognized revenue while achieving profitability- quite the feat. We at Emergence Capital are thrilled to partner with them on this journey.

Jake Saper, General Partner at Emergence Capital

There are so many interesting nuggets in this small set of words:

  • Rob Mee (CEO of Mechanical Orchard) is a Software veteran. He comes from being the founder of Pivotal Labs where he has helped to solve some of the most challenging problems in software out there for more than 30 years

  • The company finished the year 2023 as a profitable company. It is an incredible milestone because the company has less than 2 years since being founded

  • This is one of the most interesting use cases I’ve ever since for Generative AI: with the help of AI, they are migrating the old code on-premise inside old big boxes to the cloud efficiently and properly

The potential here is simply astronomical. Why? Jake Saper and Yaz El-Baba (Principal at Emergence Capital) shared a lot of interesting numbers about why these systems are critical today:

  • Today, $13 trillion of the U.S. economy depends on mainframe systems.

  • 71% of the Fortune 500 are still reliant on mainframes and spend more than $20B annually on buying and maintaining them

  • 44 out of the top 50 banks, 10 out of 10 top insurers, and 23 out of 25 top U.S. retailers all run on them

These numbers are incredible, but this is only in the United States.

In many regions out there, including Latin America where I’m based; you can see the same:

I had the privilege to work for one of the biggest insurance companies here in Peru (RIMAC Seguros), and its critical system is a big grey box as well known as “The Monster”. The main problem with this monster is that it can be touched by a single guy in the whole city of Lima.

One single guy was responsible for the most important system of the company, and relying on that, you are in a very risky position.

This is why I see a big potential in the things that this team is building.

So, my advice to you? Learn COBOL and Exilir and apply for a role inside Mechanical Orchard.

Why COBOL? Because these legacy systems are written in COBOL:

There are an estimated 240 billion lines of COBOL in operation in America. The community of COBOL programmers is shrinking faster than the open positions they create can be filled.

The average age of a COBOL programmer is 58, and roughly 10% are retiring each year. It is estimated that there were 84,000 unfilled mainframe positions in 2020, and that number goes up every year.5 GAO reported instances where federal government agencies were using systems that had components that were at least 50 years old or the vendors were no longer providing support for hardware or software.

Similarly, in June 2019 GAO reported that several of the federal government's most critical legacy systems used outdated languages, had unsupported hardware and software, and were operating with known security vulnerabilities.1

JEFF SCHOMAY, STAFF AI Engineer at Mechanical Orchard

This team is just starting and I love the approach they are taking

Good luck with your application

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Tool of the week: Teal

Marcos out

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