Revenue Per Employee (RPE) is emerging as the new critical metric for business success. While historically, SaaS companies scaled by expanding engineering and go-to-market teams, the rise of generative AI, automated cloud infrastructure, and pre-trained models now enables companies to achieve rapid growth and engagement with higher levels of productivity. Operating with AI-powered teams is becoming a critical competitive advantage. RPE is the key metric for measuring this AI-native approach, highly valued by investors. This shift is also reshaping venture capitalists’ expectations and company growth profiles across the technology sector. CEOs need to think differently, and instead of focusing on headcount as a proxy for scale or success, they need to see AI as part of the employee team or, to put it less apocalyptically, employee deliverables need to be augmented by AI. A new kid is in town, and this Alpha wants to play a part in every role.
Let’s start by looking at the old versus new way of building teams with the augmentation of artificial intelligence (AI).
A solid version of Old vs. New Approach to Building a Team
| Stage | Old Approach (Traditional Hiring) | Estimated Headcount (Old Way) | New Approach (AI-Optimized Hiring) | Estimated Headcount (New Way) |
| Pre-Seed | Full-time engineers, early sales hires | ~10-15 | Lean team with AI coding assistants, fractional sales & marketing roles | ~3-5 |
| Seed | Growing engineering team, first product managers | ~20-30 | AI-powered development, automation for lead gen and support | ~5-10 |
| Series A | Dedicated customer support, in-house finance, large sales team | ~50-75 | AI chatbots for Tier 1 support, outsourced finance, automated sales outreach | ~15-25 |
| Series B+ | Scaling with traditional hiring across all functions | 100+ | Focus on AI-driven efficiency, minimal headcount expansion | ~30-50 |
If this new approach resonates, then read on. If you are already taking action, then I would say you might consider yourself on the road to becoming an AI native CEO who understands AI is an integral part of your company’s DNA and not a separate project. AI native CEOs ask themselves how well they are integrating AI into their core operations and understand that measuring RPE is a key business health metric that tracks the ROI on AI investment.
For those who are considering RPEs, its power is that it is simple to understand, low in complexity and can be easily tracked across the organization. To further illustrate its significance as a short and long-term investment, consider the potential long-term impact on your Profit and Loss statement, as detailed in this insightful article by Lightspeed partner, Hemant Mohapatra. I grabbed charts to offer a compelling view of how AI adoption enhances P&L resiliency and expands margins as AI becomes cheaper to acquire.
Source: AI-The Last Employee?
If I have your attention and you need more, let’s look at the macro-level facts across the technology industry that clearly signal this trend and the growing importance of RPE as a key business metric worth tracking. It’s common knowledge that companies like Midjourney ($4.1M RPE) and Anysphere ($3.3M RPE) showcase what is possible with highly efficient, AI-powered teams. Even OpenAI, with its relatively large workforce of 2,500, maintains an impressive $1.5M RPE. Even if your product isn’t inherently viral or positioned for immediate, explosive growth resulting in a million-dollar-plus RPE, prioritizing this “alpha” is crucial. The key actions are to mandate AI augmentation, adapt your future hiring guidelines, and prioritize by setting RPE targets. The opportunity today is that AI is now both accessible and affordable. Your ability to generate substantial revenue with smaller, more efficient teams has become a defining characteristic of strong business health; this is not just a start-up company “thing” or one that requires big company money. As a CEO of a growth or venture stage company, high or higher RPE for your company is as accessible as water from the tap.
Let’s continue by understanding how to set appropriate targets based on your Annual Recurring Revenue (ARR) and why you should set a mandate to drive change.
Setting RPE Targets
There is a good amount of accessible data out there for ARR range and RPE targets. I have included a well-known industry source as well as a leaderboard to help you find a more comparable example aligned with your business. You need to know that as companies scale, they often achieve higher RPE due to economies of scale and more efficient processes. It really is very inviting!
The following table outlines median RPE figures based on Annual Recurring Revenue (ARR):
| ARR Range | Median RPE (2024) | Median RPE (2023) |
| $1M – $3M | $85,000 | $80,000 |
| $3M – $10M | $125,000 | $112,500 |
| $10M – $20M | $150,000 | $140,000 |
| $20M – $50M | $175,000 | $160,000 |
| $50M+ | $200,000 | $180,000 |
Source: SaaS Capital
The data is always updating, and I believe this is a solid average baseline. If you would like a different view and another data source to set targets, take a look at what Henry Shi @ Super.com (an Inovia Portfolio Company) is tracking on this Lean AI Leaderboard. Once you have selected a target, make it visible to the team with a cadence of review by adding your RPE target to your annual and month-over-month tracking of your core target metrics. Assign accountability to all leaders and manage the results.
Establishing Your AI Mandate and Empowering Your Employees – Your Job as a CEO
Look, Mr or Mrs CEO, this is in your hands. It’s one of those culture-change management calls that needs to come from the top as a mandate, not as an option. Don’t overcomplicate this mandate; it does not mean you need to change company values, but it does require a clear framework for employees to understand what is expected of them.
Here is a phenomenal example from an Inovia portfolio CEO of Spare Labs, Kristoffer Vik Hansen that was launched in their latest quarterly memo to their team. Titled “The Golden Age”:
“While this is likely deserving of a full memo, we want to briefly touch on AI and what our expectations are in relation to it. AI is now a fundamental part of how we work at Spare. Every team member should be using AI, whether that means leveraging ChatGPT for day-to-day tasks or adopting new AI-driven tools to improve output. If you’re not integrating AI into your work, you’re falling behind. We recommend each team put on an AI Showcase each quarter to demonstrate how you’re using AI. We’ve also introduced a new AI Share page in the Spare Handbook where teams can document the AI tools that are being used. We recommend that any showcases be added to this page! We aren’t using AI to shrink our team, but rather we’re using it to achieve 10 times more. That belief is baked into our approach to new products and how we operate as a company. AI gives us leverage, and we expect everyone to take advantage of it.”
The memo continues and lays out an empowering directive. So, congratulations if you’ve completed this step; if this is on your to-do list, then consider the following:
- Develop your mandate and create a short list of principles. Here are two examples from well-known CEOs: Aaron Levie, Box, and Tobias Lutke, Shopify
- Approve tools and invest in training
- Say NO to letting your employees use outside tool sets (think about your privacy)
- Gamify it, create spaces for employee knowledge sharing, and let development grow virally in your company
The best news is that most of your employees are likely already using AI in their daily lives, and we are talking about a change that empowers them to think, learn, and develop differently. Consider maxing out internal tools that are already deeply embedded across the organization. For example, since most teams already use Google Suite, why not take it to the next level, enable Gemini for AI writing and research and, more importantly, train people to build their own Gemini Gems templates. That way, they can create custom AI tools tailored to their needs. I have recently been working with a couple of our portfolio companies on enterprise selling training and coaching tools. In Gems, within a few days, we have been able to build out successful sales coaching AI tool prototypes that we are now fine-tuning. The optionality of building in-house solutions and doubling down on leveraging externally built options seems endless. Here are some suggestions from a couple of Inovia portfolio CEOs that they consider quick wins when it comes to driving productivity with AI.
Andrew McLeod, CEO @ Certn.co
- HR: Slack-Based AI Assistants: We deployed bots in Slack that handle internal HR, compliance, and policy questions. These used to take ages for our team to triage manually. Now, people get instant answers, and the volume of repetitive queries to our ops and HR teams has dropped dramatically
- Customer Support: 24/7 Chat: For external support, we use Ada on our websites to handle chat in real time. It resolves a huge chunk of inbound support on its own and routes only the complex stuff to our agents
- Sales and Customer Success Enablement: We also lean on HubSpot’s AI tools for email drafting and customer research. It helps our team get more done with less, and cuts a lot of the prep work out of their day
Ned Dwyer, CEO @ Great Question
- Product Development: Vercel’s V0.dev – the fastest way to generate a prototype. I’ve built calculators to full prototypes of complex workflows in minutes, fast-tracking communication of ideas to product, design & engineering
- Operational: GPT4.5 – everyone is using this for deep research (great!) and text generation, but it’s a godsend for ideation and generation of swag. We created a dozen new swag items in half a day of prompting, which all look incredible;his would have taken a long time and lots of back and forth with internal or external resources
Call to Action – Grow Smarter and healthier with RPE
Let’s wrap this up! What if you were to prioritize actions that significantly impact RPE in 2025? What would your employee profile and financial performance look like in 2026 and 2027? How much more empowered would your teams be? AI is fundamentally reshaping the economics of building and scaling companies, making its adoption a strategic imperative for every CEO. The ability to operate with lean, highly effective teams will be a critical competitive advantage and needs to come from the top. Revenue per employee is rapidly becoming a key indicator of AI-native leadership, increasingly valued by investors.
I encourage you to share your insights and experiences, particularly regarding developing your mandate and identifying quick-win, high-impact AI tools that boost productivity. Please reach out if you’d like to connect. I can be reached at [email protected].