The Moments That Make Us: A Guide To Success With Mark Reed

Episode 164: The Moments That Make Us: A Guide To Success With Mark Reed

Imagine growing your business from a small contract to exceeding $10 million in revenue within a few short years. That’s the incredible journey of Katalyst Space Technologies, and in this episode, you’ll learn how they navigated the challenges of rapid growth from Mark Reed, the company’s former COO. 

If you’re a CEO, founder, or business owner experiencing rapid growth and facing the challenges of scaling your business, this episode is for you.

What the podcast will teach you:

• Identifying tipping points
• Aligning around a common objective
• Embracing diverse perspectives
• Implementing feedback loops
• Creating safe spaces for concerns
• Prioritizing self-care

Resources: 

• https://growwithelite.com/podcast/
• Katalyst Space Technologies
• Mark Reed

Watch the episode here

Listen to the podcast here

I have a great guest who’s been through some of those stage changes. Before I hit record, he and I were talking. He used a term called tipping point, but several of you are wrestling with those tipping points or stage changes. You will find this episode helpful. Let me introduce my special guest. His name is Mark Reed. He has years of experience in business. He is working with a company called Katalyst Space Technologies. We’re going to talk about Mark’s experience as they were growing through some of those stage changes or tipping points. Welcome, Mark, to the show.

Thanks, Brett.  

As we were talking before the recording went live, we discussed how you were there early on with this business when the first contract was secured. The first revenue in the door is exciting. Over the last couple of years, there has been some fast growth, and you passed some tipping points, as we discussed along the way. Why don’t you give us a high-level framing for the growth that was experienced? We’ll dive into some of the things you learned as a leader.

I started out with Katalyst Space in 2021. We won our first big contract at the time, $150,000. It was a small business development work for the Air Force. It’s a defense contract, non-dilutive. We were excited, and we worked on that program. We turned it into a follow-up program that we secured in 2022, which was a $750,000 contract. We thought we were rolling in it. That brought on some additional people and overhead. We converted $750,000 in 2023 to over $5.5 million. It’s quite a bit of additional employees and overheads.

Tipping Points

We call them tipping points as we go through things, whereas you’re building up momentum to get to this occasion. In our case, it’s contract awards. It is a tipping point because you can go back the other way. It requires an investment in momentum to get over the tipping point. If you don’t get there, there’s some regression that you know will happen. It’s $5.5 million in 2023, which is a great year for us. In 2024, we’ve started off the year strong. We’ve closed over $2 million so far in revenue.

Growth

It paces you at $12 million for the year. That’s quite the rocket ship for a space technology company. To go from nothing early on and in 2021, your first $150,000, to trending towards north of $10 million this year. That’s quite the growth within a few years. Let’s talk about how you experienced that growth as a leader. The team’s growing. There’s more complexity. At those tipping points, there’s a natural pullback to where the organization is optimally set. Here’s where we’re comfortable. In order to go to the next place, there’s some updating that we need to do in our people, processes, and systems.

You jump from $150,000 to $750,000 to $5.5 million. |Those are big jumps. It doesn’t have to be precise revenue points, but the first time that you felt like, “The natural law or the natural setup of our business is pulling us back to this comfortable level when we’re trying to go somewhere else.” |What was causing some of the pullbacks? Where did you guys have to invest to keep going through that?

There are a lot of different aspects of each of those things from a personnel perspective, from an internal time investment that you put into a new business to how you balance that with winning a big contract. How are we building systems to execute on this new level that we’ve already attained? How do we make sure that we execute successfully on that level of responsibility, scope, and revenue?

There’s a new and different aspect when you get into bigger dollar values. It’s not we write a proposal, and we win a contract. Some of the earlier work might have been. There’s actual market analysis and development that has to go into it to make sure that the product that you’re performing on is putting you in a position. When that $750,000 or $2 million contract comes around, you’ve positioned your product to scale into those contracts.

That’s creating personnel systems that make us repeatable and consistent. It allows us to bring new people into that environment. It’s also thinking differently about contracts, such as, “I don’t need a contract to be successful. I need multiple different revenue streams to keep feeding this now growing ecosystem that we’re building.”

The first thing that happened for us was a realization of, in our world, we call it, business development and capture. The business development is the backend driving force that’s architecting solutions and captures that forward customer-facing thing where it’s like, “We said that this was what we wanted. This was what we were going to pay for. Let’s make that happen.”

That’s a significant amount of work even from the place where you’ve said, “This is the thing.” This is how much the actual making of that agreement takes way more time, care, and feeding than any of us anticipated. We kept learning these things in an iterative cycle, with each one having a growing scope and magnitude.

I love the way that you framed those agreements. A business, at its core, is about making and keeping commitments. We’re making and keeping commitments to prospects, customers, or clients as a team grows. At first, we’re keeping commitments with each other in the team, but there’s a core group of people at the beginning who are like, “We’re all in.”

Over time, as this thing grows, making and keeping commitments to the team is another element. It’s not inherent, like, “I’m one of the originals. I’m in.” We’re adding people who have lots of options for where they could work. They’re choosing you based on the inherent commitment of this arrangement. Sometimes, it’s benefits, but other times, it’s around the purpose or the exciting market, but there’s a whole set of things that people are committing to. They’re sure to come to an agreement. An organization or a business is about making and keeping commitments. I like the way that you drew that out..

Leadership Lessons

As a key leader in this business growing, what did you guys come across from a people standpoint as you went past that original core group of people to we’re hiring people that aren’t friends and family and aren’t people we know, and we’re trying to get better at putting out the right kinds of job ads and select the right people and bring them on and helping be successful? What were some of the leadership lessons you learned in that process?

We learned a lot of lessons. The biggest one that stuck out to me was this nagging thing that kept coming up. Are we solving the same problem? Asking in several meetings. Are we solving the same problem because my problem feels like a revenue problem, and the CEO’s problem feels like getting ready for venture capital, which isn’t necessarily the same thing?

I would go talk to our product owner, and he’d say, “In order to develop the product, I need to do this.” We have to make sure that we’re solving the same problem. Where are we going? What are we doing? Are we a company that’s trying to generate revenue? Are we a company that’s trying to prepare for private equity or venture capital? Do we have revenue targets that we’re trying to get to? We kept going back to, what’s our exit strategy? What are we marching towards? What are the steps that we have to take to get there?

As long as we can start from the top and say, “At the top, this is what the outcome is that the senior leadership team is looking for.” We implement that by doing these things intentionally. Those things are the strategy for how we put together our tam, sam, som. How does the product then support those things? Having that linear organizational alignment is the problem we’re solving. It’s not a revenue problem, a VC problem, or a product problem. It’s all of ours together.

If internally we’re not synced on what that problem is, you’re going to go out and try to get a contract that doesn’t make sense for what we’re building, or you’re going to make a modification to our product that makes sense for the customer you’re talking to, but it doesn’t get us where we need to go to be at $10 million or $20 million in revenue. It gets us that customer. That clear communication of what the problem is and how we are going to solve it was number one. Do I have time for a number two?

Guide To Success: If internally, you’re not synced on what the problem is, then you’re all going to try to get a contract that doesn’t actually make sense for what you’re building or you’re going to modify your product.

You do, but I’d love to underscore what you’re talking about because a lot of businesses default their way into their current position, especially from zero to $1 million. We’ve got our proof of concept. We have enough product market fit or service market fit. This thing is off the ground. It works in concept. Having that level of thing that works is different from an intentional future that we’re going to create together. I love the way you were calling it out.

You talked about unifying around a common problem. Some people may have heard that as a problem. I’ll offer another perspective, a common objective. Here’s what we’re going to create together. It may not even be a problem, but I love the problem-solving mindset and bringing everybody together. What we want is clarity and alignment. We want that clarity to be around what we’re going to build together. I love the way you framed it.

It was like these people over here. This party over here. This constituency and partner want different things. Who are we going to be? What are we going after? Once you have that clarity, you can come together and make important trade-off decisions, whether it be in the product or how we go to market. I wanted to underscore some of that.

I like to solve problems so much that everything becomes a new problem to solve. I forget that there’s an alternate way to think about that.

I love the framing. I use another language in case somebody else is like, “I don’t get that problem thing.” We have to have a clear objective that we’ve created and agreed upon together. We’re aligning all of our resources, effort, time, and energy towards that thing.

It allows you along the way to say, “This thing that we’re doing, I don’t see how it fits in line with that.” It causes you to pause and go, “Does it matter that we’re doing that? Is it a distractor from where we need to go to keep ourselves moving in the right direction?”

I want to hear that second thing.

The second thing is consensus on leadership interaction with employees. I tried to create a buzz line for you, but it didn’t work. Consensus on how leadership interacts with employees is what’s in my head. It’s not about personality because there are many different types of effective leaders who lead in different ways. One of the things that we found that was a struggle for us was that we had one type of leader who wanted everything to be done his way, and he knew what the outcome needed to look like. We had another type of leader who said, “You can do it however you want, but this is the outcome that it has to be.”

It’s Not About Personality

It’s not about personality, because there are so many different types of effective leaders that lead in different waysIt's not about personality, because there are so many different types of effective leaders that lead in different ways Click To Tweet

As we brought in people who weren’t part of the forming party and who didn’t have all of those preconceived notions about this is how catalyst space operates, they came in with their own expertise, and their own way of doing things was different than how we had operated. We had to decide, “Are we going to allow these outsiders to come in and mess with things and bring their own expertise? Are we going to double down on how we think things should operate?” That created a lot of tension for several months between different parties and our leadership.

That’s something that a lot of companies are going to go through when they pass that $1 million, $3 million, $5 million points. We have an identity and culture that is us. If you’re going to grow, you’re going to have to let new people swim in your pool and adjust how they do business. It doesn’t mean that you don’t get to keep your identity as a business, but it does mean that you have to be accepting of how other people are going to come in and populate your organization.

It’s not personality-driven. There are all different types of personalities of leaders that are effective, but understanding that when people come in, they’re going to come in with different expectations, skills, experiences, and perceptive filters that are going to cause them to think about your outcomes and problems differently. If you can’t make that work, you’re not going to pass those $1 million, $3 million, $5 million points. It’s not going to happen.

Provide a second witness to what you’re saying. We’ve seen over and over again as we’ve worked with seven-figure business owners that at these stage changes, or tipping points, the people, the leadership, and the talent that helped you get from zero to one and one to three aren’t the same necessarily. That can go from 3 to 10.

You start getting some of that outside perspective. You bring them in, and they’re used to 3 to 10 or 10 to 30 or more level systems and processes that don’t necessarily match the current level of organizational maturity in our business, let alone the cultural differences that you alluded to. Sometimes there are cultural differences, and sometimes there are, “I’m used to swimming in a pool that’s at a different caliber of a different level of operation. I’m having to step down here, and I’m not used to the lack of visibility in our systems. I’m not used to the lack of process control.

You guys do that out of an Excel database. How do you do that?

They come in with, like, “I’m used to a more mature and developed organization with more resources, and now you have me playing down here.” It’s funny because we want their perspective at that higher level. We’re saying, “Yes, come bring some of that goodness,” They’re uncomfortable with our current level of maturity, and it’s a disconnect.

Preserving The Core Of The Katalyst Way

I heard you talking around the idea of, like, are we going to keep our way intact? Are we going to allow strong, experienced leaders from other organizations, industries, or levels of business to come in and shape how we do things? That’s a hard tug-of-war that goes on there. What did you guys do, if anything, to try to preserve the core of the Katalyst way? What did you guys leave open for others to influence?

It’s an ongoing conversation, first and foremost. You’re never going to say, “We’ve hit it perfectly. We’re going to stay in this spot. It always ebbs and flows on either side.” We implemented a couple of tactical things that helped us out. We implemented everything that we did across the board, which we called a 10-50-99 review. We didn’t create it. We stole it from somewhere, but we started reviewing things earlier in the process.

Guide To Success: You’re never going to say, “Okay, we’ve hit it perfectly. We’re just going to stay in this spot.” It always ebbs and flows on either side.

You’re creating a new process document. You’re creating a piece of hardware code. You’re creating a CAD document. Let somebody look at it at 10% and review it at 10%. That started to help us understand earlier in the decision-making process. What’s going on? What are you thinking about when you’re developing things, you’re writing a new process, or doing business development outreach to somebody new? It allows us an earlier look at whether we are thinking about this the same way. Are we going after the same outcome? Is there something that you’re bringing to the table that we hadn’t considered? Ten percent is when we need to consider it, not the day before. It has to go out the door when it has to be 90% or 99%.

I’m not a pilot, but my understanding of how aviation works is that there’s an autopilot going. The plane is going to get thrown around. The forces of nature are going to throw that plane off course almost constantly. The autopilot’s job is to do these course corrections all along the way. The end result is that we get where we want to go. If we’re late until 25%, 30%, 50% off, or even underway, let’s not call it off before we check in; we could be wildly off course. I like that 10-50-99. That’s cool.

It was good for our organization. Organizations typically wait too late in the process to provide feedback. If they’re providing feedback at all, there’s a tendency to say, “Give me the thing. I’ll make the changes and send it out. That feedback loop is what gets everybody acquainted with each other and how Katalyst does business. Everybody’s mind becomes everybody’s mind as they’re reviewing and talking to one another.

You used a process to bring ideas together, and that collaboration keeps that high. We have a coordinated effort towards a desired outcome. It sounded like you might have one more practical idea to share along those lines. How did you keep the Katalyst way intact with the changes happening so fast?

The other thing that we did was we created and stole this. It’s like Jim Collins. There are pieces of everybody in here. We created what we called a red flag. Suppose somebody felt like, “This isn’t within our core competencies. This doesn’t make sense for where we’re going.” If this meeting is a waste of time, somebody, anybody at any moment, can say, “I have a red flag. We’re going to stop what we’re doing and listen to what you have to say. We’re going to consider it before we respond.”  Creating these red flags allows us to have a moment of, “We’ve been going back and forth on this thing. We’ve been focused on this, but somebody is realizing that we’re not doing what we’re supposed to do.” Everybody is able to say, “I got a red flag. This doesn’t make sense to me.”

You had a mechanism for giving voice to concerns that anybody could have at any time in any setting. That symbolic flag allowed the right conversations to happen. We didn’t get too far down a path without considering an important perspective.

It gave the new people agency to feel like they were standing on a valid set of thoughts and concerns, even in conversations that maybe they didn’t have the same depth as some of the people who had been there for a long time. There are lots of town hall conversations, transparency, and communication. There’s no secret to making it happen.

You guys figured out how to get clear on a problem that we were all going to work on together. You had certain organizational or leadership rhythms and vehicles that allowed you to move forward together as much as possible, as you’re moving fast because you guys are on fast. Mark, as you consider your experience at Katalyst and how quickly you guys move through those things, you shared some important ideas that our audience can benefit from. Is there anything else that you would like to leave one of those business owners who’s working through those tipping points, and it’s like, “If I could arm him or her with this one more idea, what would that be?”

Unplug When You Need To

The biggest thing that benefited us was taking a walk. Take it in stride. When you need to unplug for a minute, unplug for a minute. It’s going to feel weighty. You’re going to have long days. You’re going to pound your head for missing opportunities. Go for a walk. Take it easy. There’s going to be another opportunity. The people that you’re there with are bought into it like you are. Take a breath. Take a walk and re-attack.

Mark, it’s been a pleasure to have you here. Thank you for sharing your wisdom and your experience at Katalyst. If people want to connect with you on social and learn more about Katalyst, how would they do that?

I’m on LinkedIn. That’s the best way. My LinkedIn would be Mark A. Reed.

Thank you again, Mark. For all of you out there reading, please like and share this episode. Do all the things that allow us to get in front of as many seven-figure business owners as possible. We’re going to keep bringing these real people with real experiences in the trenches, learning the things that help you get through those tipping points, as Mark mentioned, to keep growing, to achieve the goals that you have for your business. Thanks for reading. We’ll see you next time.

Important Links:

• Katalyst Space Technologies
• Mark A. Reed

About Mark Reed

Mark recently departed from the role as COO at Katalyst Space Technologies, an early stage startup in Flagstaff. Mark started his career as an Air Force officer, serving on active duty for 7 years. During this time, Mark held roles in satellite command and control as well as a Program Manager for multiple weapon systems. After separating Mark worked multiple roles as a Program Manager for Aerospace companies like Viasat, General Dynamics Mission Systems, and most recently Katalyst Space Technologies.

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