In this concise talk, Ryan Deiss outlines the most critical performance metrics for companies generating around $20 million in annual revenue. He grades each metric on a scale from A (top priority) to F (low priority) and explains why certain numbers matter for operational efficiency, valuation, and growth strategy. Conversion rate and average order value (AOV) are important but should already be managed by teams beneath the CEO. Customer concentration receives an "S" rating because heavy reliance on a single client threatens saleability. Runway is an "A" for funded firms and an "F" for bootstrapped ones. EBITDA is highlighted as the primary driver of enterprise value, earning an "S". Revenue per employee, CAC, and churn also receive high marks, while LTV, gross margin, and others are placed lower, reflecting their relative impact at this revenue stage. The speaker emphasizes that CEOs should focus on the metrics that directly affect cash flow, profitability, and valuation, delegating the rest to specialized staff.
Chapters
$20 million still. Now we're talking about metrics. Conversion rate. A. I mean, conversion rate matters, but as a CEO, it's not the one I'm looking at. AOV. A. Again, it's a really important metric, but it should be somewhat established at this point, and you should have people below you who are optimizing it. Customer concentration. Customer concentration is an S if we're thinking about selling anytime soon. At $20 million, if you've got too much of your earnings, too much of your revenue concentrated in any one customer, This is when losing one customer can bring the entire business down. Runway. If you're funded, it's probably an A because you don't want to run out of cash. If you're bootstrapped, it's an F. We're funding the business out of our existing operations and out of our customers. EBITDA. At $20 million, EBITDA matters. I'm going to say S. This is what is going to define the value of your business if you want to go and sell it. So if you're thinking about enterprise value, which you need to be thinking about at $20 million, EBITDA is the metric period that you want to make sure that you're optimizing for. Revenue per employee. A. Your headcount is massively up, and if you want to get a snapshot of what your actual real cash flow and profit's going to be, look at revenue per employee and optimize that. LTV. I'm still going to say C on LTV. You're getting a sense of what the actual LTV is, but again, I'm still more focused on what is the value within a specific period of time. So, what's the 30-day, the 60-day, the 90-day? Lifetime value is just one of these metrics that's good for like phone companies and Fortune 500s. Gross margin. Gross margin, I'm gonna say B. It does matter, it is important, but you really should have financial people who are looking at that, who are watching that like a hawk. If you're looking at revenue per employee, and if you're looking at your EBITDA, you're kind of figuring out your gross margin. CAC. CAC is an A. How much it costs you to acquire a customer. Next to employees, the cost of acquiring a customer is your single biggest cost center in any business. So that's pretty big at $20 million. Churn. Churn's gonna be a B for just about any business. If you're subscription, it's an S, 'cause this is the thing that when it comes to valuing your business and figuring out what your enterprise value is, if your churn is bad, it almost doesn't matter what your EBITDA is.
