May 17--Extreme stress manifests itself in many ways. A nagging headache, a gnarly stomach, sleepless nights. What Ryan Buchanan remembers is a metallic taste, like iron in the back of his throat.
It was the fall of 2010 and Buchanan's Portland marketing agency, eROI, was coming apart. The e-mail marketer's foray into software development had become an unmitigated disaster, draining funds and failing to produce a workable product.
"For a couple-week period I was tasting that," Buchanan said, "when two people a week were giving their notices because it seemed we were so unstable."
Employees were walking out as eROI struggled with direction, and as Buchanan struggled with the decision to kill the software product, called Switchbox. Jettisoning it could save the company, but it would mean abandoning Buchanan's vision -- and laying off many of the remaining workers.
That aspect of the eROI story is common enough. Plenty of young companies overreach, sputter and fail. It's nearly always traumatic, as it was at eROI, which shed two-thirds of its staff (more than 30 people altogether) as Switchbox fell apart.
For eROI, though, there turned out to be another chapter. In the three years since ditching Switchbox, Buchanan has steadily rebuilt the business, winning significant new clients including Nike with a new focus on building ongoing relationships rather than one-off deals.
If eROI's dramatic plunge offers lessons in what not to do when running a business, the story of its resurgence is at least as telling, said Cameron Madill, a friend of Buchanan's and chief executive of Portland marketing firm PixelSpoke.
"People love that uncomplicated story of the winner," Madill said. "In reality there's a lot more behind it."
An uncomplicated success was what Buchanan seemed to be when Madill met him seven years ago. Originally from Maryland, Buchanan worked summer jobs in college at Black Butte Ranch and came to love Oregon. He moved to Portland after graduating from the University of Virginia and took a job working as a financial analyst at
In 2002, a few days after his 28th birthday, Buchanan co-founded eROI and enjoyed almost immediate success.
The firm became the "it" agency in town, Madill recalls. A pioneer in e-mail marketing , eROI loaded up on high-profile clients such as HBO and Condé Nast (a sister company of The Oregonian's), big organizations that were impressed with eROI's ability to track the results of their marketing campaigns.
With a spot on the Inc. 500 list of fastest-growing startups for eROI and leadership roles in various trade groups for himself, Buchanan's distinctive, bald pate had an outsized profile among the small Oregon marketing and tech firms of the day.
"He was one of those guys you looked up to in town," Madill said. "Seemed like he had it all."
And yet Buchanan saw an opportunity for more. Instead of relying on other companies' software, eROI felt it could build its own online marketing tools. Late in 2008, the company began channeling revenue from its successful agency business into software development, a field where it had little experience and few qualified personnel.
"Since I'd been successful to date at that time, there was no question I was going to be successful transforming my agency into a software company," Buchanan said, reflecting on his thinking at the time.
In retrospect, Buchanan said, he was overly enamored with the tech "rock stars" whose mammoth companies captured the popular imagination. He didn't give enough thought to the steps necessary to build that kind of success. Switchbox, meanwhile, was draining resources from what had been a thriving marketing business.
Former eROI vice president Dylan Boyd recalls a walk with Buchanan at the end of 2010 after an executive team meeting, when he implored Buchanan to abandon the software project as a hopeless diversion. As they returned to the office, Boyd said, he thought Buchanan had agreed it was time to move