From an outside perspective, Steve Reardon has already lived “the dream.” He’s a passionate photographer, golfer, and cyclist who has followed his hobbies into businesses more than once. Fast forward 10 years, a master’s in management from Stanford, and a move from his native South Africa to the SF Bay Area, and the experienced operator will be the first to admit that creating jobs out of your favorite activities isn’t as glamorous as it seems. Today, a passion for people—and a fascination with recurring revenue SaaS companies—fulfills him at work, while golf courses and bike trails remain beloved escapes reserved for evenings and weekends. As Steve begins his next role as CEO of Alpine Software Group (ASG), he discusses his role as a coach and mentor, the value of knowing your strengths—and owning your weaknesses, and how taking chances can lead to unexpected outcomes.
Tell us about your background. Have you always wanted to be a CEO?
I grew up in Durban, a city on the east coast of South Africa, the furthest landmass from Silicon Valley. I studied finance and accounting and went into the retail business after college as a financial manager for a clothing company in Cape Town. We had 15 stores and my job was to manage six associates, most of whom were older than me. I quickly moved from finance management into brand management, and I loved being an operator. I think there’s no better way to learn a business than interacting physically, one-on-one, with a customer who’s trying to buy a product that you made.
Like many young people, especially in the ‘90s, I dreamed of starting my own company. I was passionate about photography, and photo printing was a growing industry, so I started Peldon Technologies to supply photo printers and all-in-one kiosks to pharmacies and retailers. I started with $1,000 in savings and went door-to-door selling my printers across Cape Town, Johannesburg, and Durban. Four years later, I had built a team of seven and had business across the three cities. We ultimately sold to one of our competitors and had a pretty good outcome. I gained a real appreciation for being a founder; I handled every aspect of a small startup, from dragging my machine around to doing demos, running payroll, doing my own books, and hiring and training people. One of my learnings early on was that the founder experience is less about glory and more about lying awake at night worrying about making payroll.
At the start of our conversation, you alluded to a major life lesson around passions. What can you tell us about following—or not following—your passion?
The headline of my career is “Don’t follow your passion.” After I sold my printer business, I pursued a role at a business centered on another passion: golf. The Pro Shop Group was a big box golf retailer in South Africa that ran these large-scale golf retail businesses. They also had a business called PlayMoreGolf that aggregated unused tee times across hundreds of golf courses in South Africa and sold them to members. I was a member at the time and really loved the service. Unlike the traditional model of joining a golf club, you could join PlayMoreGolf and play a hundred different courses at off-peak times. They were looking for a general manager, so I applied and joined soon after.
That GM role was my first taste of managing a recurring revenue business. We looked at cost to acquire customers, monthly recurring revenue, revenue retention, churn, ACV per customer upgrades, downgrades, and everything else. I wouldn’t join Alpine for eight more years, but those early lessons set me up for my role today. I ran our in-house development team that created all of our ecommerce sites, and I ran a team of graphic designers and I focused on other digital projects. Pretty soon, we looked for a focus area outside of golf. I was part of the team that looked at cycling as the next expansion. At the time, I was getting into cycling, especially mountain biking. We led the acquisition of Cycle Lab Group, South Africa’s largest retail chain of cycling stores. Over time, we opened big box bike stores, including the largest cycling store in the Southern Hemisphere. We also added other elements like a cycling club and partnerships with bike parks. We aimed to create the three legs of the stool: retail, membership, and facilities, just like we had for golf.
Cycle Lab Group, (MoreCycle) was my first large CEO gig; we had a team of over 150 people and I loved it. Toward the end of that chapter, I realized I had followed my passion into photography, golf, and cycling, and in the end, I’d fallen out of love with all three. I remember one Saturday morning we had a club bike ride starting at 5:30 a.m. and I asked myself, “Am I going to have fun or am I going to work?” I realized I didn’t know the difference, and that really frustrated me. But I also realized that even while I fell out of love with each sport or passion or hobby, I fell in love with the businesses.
I asked myself, “Am I going to have fun or am I going to work?” I realized I didn’t know the difference, and that really frustrated me. But I also realized that even while I fell out of love with each sport or passion or hobby, I fell in love with the businesses.
How did you end up in the U.S. and how did you discover Alpine?
I’ve always been fascinated with moving to the U.S. As a family, we made the decision very deliberately. In 2016, we sold everything: the house, the cars, seven bikes, and four sets of golf clubs. My wife, two girls, and I put our stuff in six duffel bags, got on a plane, and moved to California so that I could attend Stanford’s GSB. Stanford taught me a lot, but most importantly, it taught me about introspection, growth mindset, and knowing yourself. It unlocked some key things for me that I’d been struggling within my career. I can confidently say that the graduate program changed my life. Most importantly, I met Alpine Partner Matt Moore and the Alpine team.
I remember meeting Alpine Partners Mark Strauch and Will Adams during the interview process. We were talking about industries and I told my story about following my passions through the photo, golf, and cycling businesses before deciding I had a deep passion for developing people. I told them how I loved working with teams and growing businesses, and that I didn’t really care what industry I worked in as long as I was working with the right people. Will looked at me and said, “That’s exactly how we think about the world.” And I knew I’d found the right place.
I told them how I loved working with teams and growing businesses, and that I didn’t really care what industry I worked in as long as I was working with the right people. Will looked at me and said, “That’s exactly how we think about the world.” And I knew I’d found the right place.
What roles have you played at Alpine?
In my early months at ASG, I led our third investment in an Alpine Software Group (ASG) company called Bill4Time in Seattle. During my tenure, we completed several add-ons and Soumya Nettimi stepped in to run the business. Then I shifted focus to Traject, a marketing technology business, where we also followed the add-on playbook, completing eight fantastic add-ons during my time. In July, I left Traject in Alice Song’s very capable hands and moved to the ASG level. Today I’m CEO of ASG.
What do you love about recurring revenue SaaS businesses?
I love the idea that you can manage a recurring revenue SaaS business in a very hands-on way through data and metrics. I’ve often thought if you give me four or five data points about a recurring revenue business, I can tell you immediately whether it’s working or struggling. And I’ve always been fascinated with the idea of using data to make minor tweaks or adjustments that can have huge ripple effects across the business. There’s a direct feedback loop, and they’re highly capital efficient, profitable, and can be real engines of growth. For example, if I increase the top of the funnel by X and keep the conversion rate the same, it will yield a new monthly recurring revenue (MRR) to this level. I love that these businesses are predictable and resilient; we’ve seen that proven during COVID-19 this year.
How has the Alpine support system helped you grow?
Alpine Partner Mark Strauch has been my champion from the beginning. He’s a mentor and a coach who has helped shepherd me through my Alpine career and he’s played a huge part in my success and growth as a leader. He’s always been able to put me in touch with folks who can help me along the way. Matt Moore has also believed in me from the beginning, he met a sarcastic South African in a Stanford library and somehow believed I could become a software CEO.
I believe that talent is the majority of the game, a belief that really hit home for me in the Alpine Playbook. If you can field the best players, you’re going to win the game 99 times out of 100. When Soumya Nettimi took over as CEO of LegalTech, she proved that a high quality, people-first leader could run a large software business despite being relatively new to executive management. She was so talented that she achieved incredible outcomes in a short period of time—better outcomes than any experienced operator might have achieved. Talent is such a systematic advantage. The Alpine Playbook provides guidance on deep dive interviews, the one-page planning process, personal development plans, regular one-on-ones, and three-by-three feedback and it has structurally reformed the way I think about the world.
Is there a moment that stands out from your 2.5 years as CEO of Traject?
The most crazy and interesting time at Traject was the end of 2018; we completed six add-ons in 45 days. I had recruited a bunch of folks for upcoming M&A activity, but nothing had hit. Then in November and December, everything happened at once. I learned to lean on our team to step up and contribute. We developed a culture of real resilience and comfort with change because change was happening every day. In most businesses, that number of moving pieces would have put stress on the business, but we managed to turn the chaos into a positive. The team got excited about the rapid pace of change, and we recruited more team members who would thrive in a complex, evolving environment. As a result, we won lots of opportunities.
That pace of change meant we didn’t have a chance to second-guess whether we were doing the right thing or whether we should be moving slower. We would tell employees things like, “Katelyn, you’re now the head of Sales and Marketing for all of these businesses, and you have to figure it out.” There wasn’t a lot of time to think about whether we were making the right decisions; we always backed our strongest, most talented leaders and that always ended up being the right call.
How did you know that it was time to turn the CEO reins over to Alice Song?
When I met Alice, I knew she was a high-potential leader. We were very fortunate that she agreed to join as COO of Traject. I was blown away by what an effortlessly good manager she was from the start. She has an ability to assimilate stress and think clearly, and she also excels in areas where I do not. She brings a contemplative, collaborative style that becomes clear in meetings. When someone makes a point, you see her pause and say, “That’s interesting,” and almost put her hand on her chin. She’s deeply considering someone’s point, which is genuine, and also makes team members feel like their opinions are being taken into account and that her decisions are thoughtful. I tend to operate with speed, and sometimes the downside of speed is that team members don’t feel as heard.
Toward the end of last year, I started realizing that Alice could take on the CEO role, and that she would do a better job than I would. If I could provide mentorship or help her along, that would be gratifying for me as well. Leadership requires multiple gears. I look to Alice for that contemplative, considerate decision-making, and hopefully she looks to me for my speed and bias for action in some circumstances. Ultimately, that’s the power of the Alpine community. When we bring high quality individuals together and channel their strengths, it makes us all want to improve. We want to grow and develop the better attributes we see in our colleagues.
Ultimately, that’s the power of the Alpine community. When we bring high quality individuals together and channel their strengths, it makes us all want to improve. We want to grow and develop the better attributes we see in our colleagues.
Now that you’re CEO of ASG, how do you spend your days?
My primary role is recruitment, retention, and development of high-quality talent. I want to make sure that we support our impressive CEOs-in-Training (CITs) both professionally and personally. Folks are trying to build their careers, run bigger businesses, and win. My job is to get out of their way and try to be a lightweight shepherd of their careers. I think of myself as a sounding board for decisions that have long-term consequences, or sometimes just another person to help think through a sticky strategic problem. We have what Alpine Partner Will Adams calls an “embarrassment of riches” in our CITs. If you give them the right opportunities, they’re going to spike the ball.
I’m now also a custodian and allocator of capital. I spend my time thinking about the three phases of our portfolio businesses: buying, building, and selling. Depending on which stage we’re in, I spend time differently. In ASG two, we’re more focused on buy and build. In ASG one, we’re getting closer to the building and selling phase. I spend time thinking through how deals might be constructed and put together in a software vertical, and then I consider who might be the best fit to lead those verticals.
My phrase for 2020 is, “We have done well, all things considered.” We’ve grown over the past year at ASG, but I am most looking forward to a return to some version of normality. Some of our portfolio company CITs and CEOs-in-residence are having a tough year, not because their businesses are impaired—though some are—but because it’s hard to see rewards right now. I’m excited about a world where we can play a little more offense. ASG itself is proving to be very resilient. It’s already a rocket ship, so as we return to normal, our belief is we’re poised for real, explosive growth.