The Prof G Pod with Scott Galloway Office Hours: Revenue Per Employee, Should I Move Production to Mexico? And Advice to an Early Career 23-year-old
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Jan 25, 2023 The discussion kicks off with insights on using revenue per employee as a key business metric, emphasizing its informative yet non-deciding role in strategy. A luxury furniture designer explores the pros and cons of relocating production to Mexico, balancing quality with cost-efficiency. Wrapping up, valuable career advice is shared with a young professional looking to break into venture capital, focusing on the importance of finance skills and maintaining work-life balance in their journey.
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RPE Insights
- Revenue per employee (RPE) is a useful metric, especially for small service companies.
- Compare your RPE to industry benchmarks for meaningful insights.
Use Multiple Metrics
- Track multiple business metrics like logo renewal, dollar renewal, ARR, and PE ratios.
- Don't let any single metric dictate your decisions, as this can lead to perverse incentives.
RPE Benchmarks
- Scott Galloway aimed for $550,000 RPE when starting Profit Brand Strategy, benchmarking against McKinsey.
- Tech companies like Pinterest and Snap have RPEs of $500,000-$800,000, while Meta and Google reach $1.5 million.