Steven Cohen, reluctant millionaire
Softline Pastel MD Steven Cohen isn’t your regular big business MD. He smokes, he swears, but more importantly, he’s not just willing to roll up his sleeves, he loves to. By Craig Wilson.
With an untucked shirt and a casual gait, Steven Cohen doesn’t look like the MD of one of SA’s most successful software companies. Softline Pastel was co-founded by Ivan Epstein and Alan Osrin in 1988 — with Cohen, then a young entrepreneur, joining the pair 22 years ago.
As I’m sitting with Cohen at Softline Pastel’s head office in Johannesburg, he greets passersby by name and jokes with many of them. He’s clearly well liked and attributes this to the lack of hierarchy in the company. “My office is so open plan you wouldn’t know I was the boss if you walked into it,” he says.
Cohen attended Greenside High School in Johannesburg and wanted to study medicine but didn’t achieve the required results. Instead, following the advice of his parents, he enrolled at the University of the Witwatersrand and became a chartered accountant.
“We didn’t have bucks, so I did it part-time over many years,” says Cohen. “I loved university; I’m a bit of an academic at heart.”
Like most of his white peers at the time, Cohen then went to the army. He completed his military service in 1989 and worked as a consultant to various local businesses.
In 1990, the young Cohen met Osrin and Epstein, who would later become his brother in-law. The two had started a software company and Cohen joined them as a “nerd accountant”.
“Ivan was strictly a deal maker in those days and Alan handled sales. I was the accountant who knew the ins-and-outs of accounting, which proved important. We were making accounting software, after all,” he says sarcastically.
Cohen also found himself filling the role of financial director, something that became increasingly tricky as the company grew. “In those days it was called Brilliant Software. We aggregated about 20 000 businesses with our software.”
In the mid-1990s, the IT group Persetel, which eventually became Business Connexion through a complex series of deals, acquired a 70% stake in Softline. But in 1997, Softline bought back the stake, paying double for it. Softline then listed on the JSE. “It was the time of the listings boom and as the financial director I became more of a corporate,” say Cohen.
“I was meeting with Morgan Stanley, Merrill Lynch. Hell, I even rang the bell on the Nasdaq. It’s easy to start thinking you’re a big shot, but really you just lose touch with your people,” he says. “When you list, you stop working on the business. You’re selling your share rather than your product. I think that’s screwed up,” Cohen says, before adding: “Everything I say is on the record.”
By 2003, Softline realised it wanted to delist. “The dot-com boom was bust, we were spending big listing fees, and our share price was going nowhere, so we tried to buy [the company] back. When you do this you kind of put a ‘for sale’ sign on your business.”
So, not entirely unexpectedly, a hostile bid came in for the company, and UK-based software giant Sage eventually bought Softline. “Sage was very powerful in the US and Europe. We now handle the southern hemisphere for them.”
Back to basics
“Before the buyout in 2003, when I was still the financial director, I was on a flight home and thought: I’m actually a shit accountant, but I’m a good operations guy,” says Cohen.
He says he loved the interactions with staff and working more closely with the actual software the company sells. “I told the board I wanted to become chief operating officer,” he recalls. “I was still flying around the world, but at least I wasn’t the FD anymore. Once Sage bought us I wanted to see if I could do a real job, so I started running Pastel.”
He professes to love the role. “I’m much closer to my okes and to the actual developing and designing of the software. My staff can tell me if I’m talking shit and that’s great. It’s about healthy disrespect; we challenge each other.”
These days, Cohen remains involved in creating strategic alliances for Softline Pastel and looking out for potential acquisitions, but he’s also more heavily focused on product strategy – something he clearly enjoys. More importantly, he’s working with a team again.
“As MD, I work for my people,” he explains. “If I screw up, I let them down. So often in corporates egos get too big and it becomes about the staff working for them. We all work for this entity called Pastel. When I screw up I feel bad; like I’m letting my people down.”
“I never thought I’d make bucks,” says Cohen. “I thought if I could get a cool job and earn a decent salary that would be great. But Epstein dragged me kicking and screaming into being a millionaire. I just wanted to graft.”
Epstein was far more ambitious than Cohen. “Ivan believed he would make money. I didn’t come from money, so I was more defensive. I just wanted enough to pay the bills and educate my kids.”
When Cohen isn’t working, he spends his time building and flying radio-controlled aircraft and collecting and playing guitars.
“I never got ambitious enough to be a rock star,” he says. “As Clint Eastwood says, ‘a man’s got to know his limitations’. I just love how music fits together, why a minor chord sounds sad…”
Cohen says he collects guitars and mounts them on the walls of his home. “Keeping a guitar in a box is a travesty.”
His other obsession is motorcycles. “I only ride a bike these days, even when the weather doesn’t hold.” He rides a BMW R1200GS. He has a Toyota Rav 4 in the basement at Softline Pastel’s Sandton head office but can’t remember when last he drove it.
Head in the cloud
Cohen is quick to steer the conversation back to business. Turning to the future of accounting software, he says cloud computing is the next disruptive wave.
“The move from DOS to Windows was aesthetic. It didn’t make things more efficient. But the move from Windows to the cloud is just win, win, win. There are just tons of compelling and fantastic reasons to move to cloud.”
The company is also dabbling in personal financial management, having recently launched Pastel My Money. But Cohen laments the fact that local banks won’t allow their customers to set up an automated means of getting their statements into the Pastel service.
“The question we have to ask is who owns your data? The banks are not being cool about giving us integration. It’s like me saying to okes who use Pastel that I own their data. It just doesn’t make sense.”
Sensible or not, Cohen intends to do what he can to get the banks to play ball. He says people are becoming more aware of the value of their own data and that it’s up to companies like Pastel to help them harness it.
With another appointment waiting, Cohen stubs out his cigarette, partially tucks in his shirt, and shakes my hand firmly. “Let me know if you spot anything weird in My Money,” he says. “That’s the best way to get these things right sooner.” — (c) 2012 NewsCentral Media