Kate Washut Speaks of Roles, Values, Partners and Pivots at the BIZ Luncheon
"Kate is focused on balancing the needs and demands of five partners, passionate about the entrepreneurial community in which she is heavily involved, and given that she spent nine years in the corporate world before going her own way, I would classify her as a reluctant CEO," Mike Colwell said by way of introduction for his guest at the May BIZ Startup Stories event, Kate Washut. Washut is the CEO of Far Reach.
Washut and her four partners, all refugees from a corporate environment that had turned cold and uninviting, formed Far Reach in 2007. Originally envisioned as a product development firm drawing upon the broad software development credentials of its principals and initially focused upon creating a better mousetrap in the form of an advanced student information system that could be sold to educational institutions, Far Reach would soon be introduced to the concept of the pivot. As Colwell, Executive Director of Entrepreneurial Initiatives for the Greater Des Moines Partnership, characterized it in his introduction, "You left the corporate world to build a product, pivoted to doing services, then came back to products and then added marketing to the business."
In her hour-long interview, fielding questions from Colwell and an engaged audience, Washut shared her thoughts on multiple lessons learned including the importance of the pivot, intelligent growth, the evolution of roles, housing services and product development under one roof, and the importance of core values.
Fully focused on the student information system, but generating cash flow on the side with consultation and website development, the partners discovered through market research that the product they were building was unlikely to be a success in a market sector reluctant to embrace change. They suddenly found themselves adrift in the entrepreneurial waters without a destination. "The consulting and website jobs were going okay and we were making a little money, so we decided we would do that until we figured out what would come next," Washut explained of their first pivot.
Growing the business as consultants yet never fully ignoring the lure of product development has seen them join in three equity partnership endeavors where they have developed products in conjunction with others who held expertise in the market sector, but not in product development. Finally they would add a marketing component to the business making them a unique integration of end-to-end services for product development, branding and launching.
The company that originally consisted of just the five partners has now carefully grown to a staff of 16, bringing in-house some of the services that they'd originally hired from outside. Key to that expansion has been the addition of a Project Manager position. "It was kind of a selfish decision," Washut said, noting that things were becoming chaotic and that the new position could focus on the project as a whole and provide a consistent point of contact for the clients allowing the team members to focus on their component and avoid the need to fully understand and communicate all aspects of all projects.
The Evolution of Roles
Along similar lines, Washut spoke to the evolution from five partners involved in every aspect of the business to some division of labor and definition of roles. Everybody discussing everything, she and Colwell would note, is an enormous demand on time and an inhibitor to work getting done. "Initially we all just pitched in and did what needed to be done, but over the years we just gradually fell into our roles," she explained. While she is not always altogether enamored or prepared for the role of CEO, it has embraced her and she it. She is quick to point out the importance in her role of knowing your strengths and weaknesses and determining when to educate yourself through your weaknesses and when to outsource/delegate that aspect of the role.
Services and Products
Integrating services and products under one roof with one team has both its challenges and rewards Washut observed of their fairly unique model. "The priorities are very different," she offered. "Product development is very long-term whereas services are very now. With services, if you want to get paid for an hour, you have to work an hour." The big challenge, which she admits they still struggle with, is allocating limited resources between the two business models. The upside for Far Reach has been that the immediacy of the service component has allowed them to bootstrap the business, not needing investment capital to carry them through a long product development phase.
"My biggest passion when we started this company was to create a place where people wanted to work," she said by way of expressing the importance she and all the partners placed upon core values from the day they started the business. While that was always a focus, it was difficult to formally define and would on occasion get briefly lost in the inevitable truth that a business must make money. "Core values are very important, but so is cash flow," she quipped. In 2010, inspired by a presentation of Tony Shay, Founder of Zappos, Washut and the partners undertook an initiative to define their core values. "We took some time to articulate what we stood for and what we believed in," she said. "It's a journey for us, it didn't happen overnight and it is still really hard for us, but I feel very strongly if you focus on those things, your people and your clients will be happier and the cash will flow."
In 2007 Far Reach began from a conversation among friends about what was really important, and seven years later, it finds its way to continued success through the extension and expansion of that conversation.
Square One DSM, an initiative of the Greater Des Moines Partnership, is formerly known as Business Innovation Zone (BIZ).