eROI Days Email Agency

Over the past few months, a lot of what our team has been speaking, writing, and studying about relates to the philosophy that it’s okay to fail, as long as you are able to learn from it and, in the end, come out achieving success.

After reading our latest study “Use of Testing in Email Marketing” – which concludes by saying “if you’re not failing, you’re not learning” – I began thinking about how, as an entrepreneur and  business owner, it was extremely important for me to embrace this philosophy early on and realize that it expands to every aspect of business.  I’ll be the first to say it, failing isn’t fun! Doing so however, can be enlightening and isn’t something you should fear. If you fear failure, you will likely refrain from taking risks and experimenting with new ideas that can ultimately move you ahead.  I have gone through the “fail, learn and improve” process numerous times and each time I’ve learned more about it. One such lesson is that sometimes “the fail” isn’t always obvious. The below video is comedy and not relevant to my particular FAIL, but it’s a Fail Video worth watching.

There are times when the big FAIL sign isn’t held up to alert you, “the fail” is often something you have to keep an eye out for. This eye-opening lesson came upon me in early 2007 when eROI was going through a big transition period accompanied by lot of growing pains. Going though this period certainly made me stronger as a leader, us stronger as a company and created a culture where my employees have a stronger voice and a bigger influence in the ongoing success of eROI -it however was an emotional and professional journey to get to this point and one that I actually documented in a 5 part blog post back in the summer of 2007. If you are so inclined, the entire series can be found in the eROI Days archive for you reading pleasure but to sum it up:

The Fail

I had assumed that I was connected to the thoughts of each employee and each department because I had a hands-on management approach and frequently interacted socially with my employees.  I assumed that the agency was well aligned internally and that that everyone was happy, felt valued and felt they had a voice, both on a project level and within the agency as a whole.

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Guy Kawasaki bootstrapping image

Yesterday, Chanin Ballance (founder/CEO of viaLanguage), Mitch Daugherty (founder of Morange Design), and I (the eROI guy) got together to plan what we’d talk about for a webinar about Bootstrapping and our personal experiences with self-induced starvation and endurance thru the early days.  It was like catching up with old friends after a couple years – the instant bond entrepreneurs share in dredging up old stories that weren’t fun at the time, but are great memories in retrospect.  The OEN Webinar is set for June 17 (registration isn’t live yet, but will be shortly) and we’re going to use a different format than the usual put-your-audience-to-sleep-with-powerpoint.  We are going to try to re-create the casual, round-table discussion among entrepreneurs sharing candid stories.  Some of the topics will include:

– Risk vs Reward – How do you know if it makes sense to bootstrap your idea?
– Keep your Day Job – The stress of self funding with no income can sometimes lead to failure
– Cash Flow – How to get a handle on your most important business aspect
– How to market your business on a shoestring budget
– Why most business models don’t need funding as it can be a big distraction

Guy Kawasaki, in his old-school days before Alltop, delivers some awesome advice on this on his 2006 blog post titled “The Art of Bootstrapping”

Kevin Tate, a buddy of mine, had an awesome analogy featured on the front page of the Oregonian today in the article “Tech entrepreneurs defy recession” by Mike Rogoway.  Here’s the excerpt from the article with Kevin’s quote that really got me thinking from a different mindset:

“Portland fosters the creation of small, furry mammals rather than dinosaurs — the really big things,” said Kevin Tate, 35, CEO of StepChange Group, a social media advertising and marketing specialist in the Pearl District. The “dinosaur” model of big corporate campuses and regimented software development (think Microsoft — or even Google) is going by the wayside, Tate said, in favor of more informal and collaborative arrangements. Portland’s current high-tech foment positions the state well to capitalize when the recession ends, provided its technology entrepreneurs have the appetite to take it on.  “What happens when things start coming back?” Tate asked. “Will the small, furry mammals evolve?”

Nearly 9 years ago, 7 mainly tech start-up entrepreneurs co-founded a group called Starve Ups.  We all survived the dot com implosion, but were influenced by really wanting to scale our companies for growth.  Some Starve Ups companies have grown a little faster than others, but many contain a desire to do something world-changing with our companies through software, social good, amazing company culture or all of the above.  I really like Kevin’s quote because it is accurate and represents a strong contingent in Portland’s software community, but I think we need to be honest with ourselves that our dream is to do something bigger and be more like a lion than a forgettable Chihuahua.  So, how do we get there? Lack of capital is usually at the top of the list, but our biggest limitation is our mindset. Let’s grow game-changing, sustainable software businesses in Portland and tout Portland’s livability and balance as a BONUS, not a detriment to growth.

Comment below with your ideas of a more representative furry mammal for Portland.

The smiley face image to the left makes this blog post all the more enjoyable to write.  So, as an entrepreneur, let’s talk about which strategies worked and which failed last week amidst the absolute chaos in the financial markets and subsequently the economy. I was visiting clients and prospects from our NYC office on Mon-Wed last week and media is EVERYWHERE in Manhattan – you cannot escape it. 

However, I was with our NYC Director, Chris Masagatani, who is super talented and hilarious to hang out with while dashing to meetings all over town.  So, my NYC strategy was “Hear No Evil, See No Evil, Speak No Evil” in relation to all the news surrounding the markets crashing continuously.

Then, on the plane flight home to Portland on Wed night, I watched a little of Anderson Cooper and Suze Orman on the Jet Blue flight and Suze said the Dow could easily drop another 1000 points to 8,200 (little did I know that this would actually happen during the day 36 hours later).  This was on top of all the other stuff I had been trying to ignore – and the honest truth is that a lot of anxiety and a little panic set in.  It didn’t last long, but it was there for a brief moment that night.  Failed strategy #2.

I had the most relaxing, peaceful weekend with close friends and all of our families at Black Butte Ranch in Central Oregon (where I still managed to get a ton of work done) and I realized that the successful strategy #3 is to be aware of what is going on globally, but focus all of your energy on your own little world – your team, delighting customers, being frugal in how your company operates, stay calm, and exude positivity and optimism.  So, if an anxiety attack hits, remember to be happy dammit!

Yesterday, I joined the Board of Greenlight Greater Portland, an economic development group represented by Portland’s private-sector business community.  Greenlight’s goal is to recruit and retain growing companies in the Greater Portland region.  I was inspired by Greenlight’s mission and the approachability and competence of the Board – titans of industry in this town – I was inspired to write a thank you email to them last night. It went something like this:

From: Ryan Buchanan
To: Tim Priest ; Mark Ganz ; Malia Wasson ; Eric Parsons ; Pat Reiten ; Peggy Fowler ; Steve Stadum ; Roger Hinshaw ; Bill Stoller ; Bob Jesenik ; Wes Lawrence ; Jim Mark ; Dennis Rawlinson ; Keith Leavitt ; Lindsay Desrochers ; Wally Van Valkenburg ; Don Krahmer ; Alan Johnson ; Randy L. Miller ; Scott Campbell ; John Bradley ; Jay Platt 
Sent: Tue Sep 09 23:51:47 2008
Subject: RE: September 9 Greenlight Board Meeting: thank you

My hat goes off to a Portland entrepreneurial group called Starve Ups that I have been involved with for the past 7 years. John Friess, our leader with unbelievable entrepreneurial passion, wrote a really meaningful email to the group just now and I copied my response below his email.

—————————————————————–
From: John Friess
Sent: Monday, October 15, 2007 10:35 PM
To: List
Subject: Starve Ups 7 Years Later

Everyone,

Seven years ago this evening 7 companies met at the offices of Rumblefish in downtown Portland and founded Starve Ups. The founders of these companies (AssetExchange, Versation, eROI, viaLanguage, CoolerEmail, Rumblefish and wired.MD) met for about four hours that day as we discussed exactly what Starve Ups should be, what it should accomplish and where it should go.

That evening we decided that the group should be about providing one another feedback, resources and networks to propel our businesses forward. We decided that what it should do is make success the only business model worth pursuing and that eventually we should all get to our exit or existence strategy as defined by our teams.

Well since that time all 7 founding companies, though some have had name changes or have undergone corporate restructuring, have survived and have made it to profitability. One has been acquired and more are sure to be acquired within the next two years. We have collectively employed hundreds, we have sold product to tens of thousands and we have earned tens of millions. We have built two Inc. 500 companies and have provided viable business solutions in 6 of the 7 continents.

To date we have had a total of 32 membership companies, 27 of which are still in business and building or selling products and solutions. This is an 84% success ratio amongst our membership companies, where the national average after 7 years is approximately a 16-18% success ratio. We have built a brand with a single purpose and that is to ensure that we all succeed in our businesses through paying it forward. We have done exactly that as a group, as a team as Starve Ups.

Thank you all for a great 7 years.

John

————————————————————
My response:

This is awesome! And the cold, hard truth of it all is that Starve Ups would not exist if John Friess wasn’t driving it forward each and every day – you’ve done far more than you give yourself credit for.

With that said, congrats collectively to everyone on this list – we need to appreciate and celebrate our accomplishments – John’s email above shows all of us that we have legitimate things to be proud of with our companies.

Cheers,
Ryan

I fly over 2,000 miles to Chicago for the Inc. 500 Conference, and I run into two guys from my town, Portland Oregon, who I knew all about for the past 5 years, but never met. Eric and Jack (pictured with me above) originally started a company called Handyman Online in ‘97 which grew quickly, but got derailed from a $24 million VC investment that ballooned its headcount and expenses before flaming out. Eric and Jack pulled that business model (of selling valuable leads to contractors) out of the ashes, and have built an incredibly successful, high-growth, non-funded company called ReliableRemodeler.com. Looking forward to continuing the relationship in Portland, now that finally met each other in Chicago.

I just returned from the Inc. 500 Conference, and I must admit that I am a complete evangelist of Inc. Magazine, Inc. 500, and especially the Inc. 500 Conference. As an entrepreneur and leader of a scalable, high-growth company (eROI), there is nothing better than being around other entrepreneurs who are dynamic, innovative, and going through the same fight in the trenches as I’m in. President Clinton was the keynote and clearly impressed the audience by driving home the value of entrepreneurial mentoring, empowering entrepreneurs from a micro-lending perspective in the global marketplace, innovation in the areas of cleaner, greener, independent energy sources, health and wellness reform from a cultural perspective. I can’t tell you how refreshing it was to hear a U.S. President that could actually speak intelligently about issues that matter (to me).

While Clinton was the initial draw, there were 3 big reasons why this conference was better than any I’ve ever attended in my life:

1. Getting recognized in business happens rarely, and the whole conference made all 1,000 of us (Inc. 5000 was included in the conference which was a huge success) feel like Hollywood stars.

2. I connected almost instantly with 6 other entrepreneurs from all over the country who had so much to offer on a personal and business level, that we ended up talking and socializing until 4am a couple nights in a row.

3. The speakers were THAT GOOD. One highlight was a guy named Tom Szaky who dropped out of Princeton after visiting buddies from his hometown in Canada who were successfully growing very healthy marijuana plants using a liquified form of worm poop (yes, worm poop)! Tom created a conveyor belt system to take a huge amount of food waste and have worms eat it and poop it out into containers. His company, TerraCycle, makes all of its products and its packaging out of waste. It’s 100%, completely eco-friendly. Tom delighted the crowd with a charismatic presentation.

I’ve really been impressed by the meticulous process, screening, surveying, and especially the writing of Inc Magazine and its journalists during this month’s issue of the Inc. 500. This is the first time I’ve been through this process as the leader of a high-growth company, but I’ve been in other award ceremonies, and I’m blown away by the Inc. 500 thoroughness.

Let’s break it down for all of the email and phone contact for information (and I’m missing at least 1/2 the steps and contact points below):
1. eROI submits 2003 and 2006 accrual revenue figures on the Inc. 500 website in April’07.
2. A few weeks later, we get confirmation that eROI could be considered for being an Inc. 500 honoree.
3. Sarah, an Inc. 500 journalists, emails and calls me to interview me and get the entrepreneurial backstory.
4. Sara, an Inc. 500 fact-checker, makes sure that my accountant and tax files and loads of other company and personal information is correct and complete.
5. I get Sarah and Sara mixed up in my head and continue to follow up on this “eROI: Startup Grows Up” potential story (that hasn’t come to fruition yet) with the wrong Sarah. Finally, Sarah and I chat and there is potential to run the story after the Inc. 500 magazine issue.
6. I’m strongly encouraged (multiple times) to take an in-depth CEO survey of my personal, business, and even political preferences, which proves to be one of the most interesting pieces in the Inc. 500 September ‘07 issue.
7. Final fact-checking via phone done.
8. June 26th – I received official notification (via physical mail) that eROI will be in the Inc. 500. Elegant presentation of materials and an invite to the Inc. 500 Conference that happens in Chicago next week (9/6 – 9/9). I will be there.
9. More e-invites follow (almost on a daily basis) to the Inc. 500 conference.
10. I just received another survey request last night.

Next week will likely increase in messaging as a huge lead-up to the big event. I’ll keep you posted on what the conference is like. I’d imagine it’s going to be a memorable conference with keynotes like President Bill Clinton. Tune in to the blog for more coming soon…

Lessons Learned
When you go through an emotional and professional journey like this one, it only makes sense to share my mistakes and the few things I did right. There are hundreds of lessons in just this one story, but I’ll share my top five:

1. As a business owner, never assume that informal socializing with employees is good enough. You must regularly meet one-on-one with your employees in a professional, confidential environment where true sharing is encouraged and rewarded. Additionally, I learned that employees that seem to get along socially do not necessarily respect one another professionally.

2. Take action quickly.

3. If your company is out of alignment, listen to your employees and let them know you are listening by sharing their suggestions with the whole company.

4. Get advice from other entrepreneurs. I was fortunate to have co-founded a group of 18 founders of high-growth startups called Starve Ups and received a lot of trusted advice from the trenches. Additionally, I am part of another group of advertising agency owners called Agency Owner Roundtable which is run through the Portland Advertising Federation. Both of these groups gave me pointers of real-world experiences on employee advice, branding advice, and strategic direction that I couldn’t get anywhere else.

5. You think you’ve delegated and given up a lot of control of your company, but you haven’t. If you want your company to soar, embrace delegation on every level and truly give key pieces of control to your employees. The Process Team is a result of this.

Bonus: Celebrate success when it happens.