This Playbook Reveals Roman's Proven Principles
The Science of Sustainable Growth
Understanding customer economics and achieving escape velocity through data-driven scaling.
Operational Excellence
Building systems and teams that scale efficiently without compromising quality.
Financial Strategy
Maximizing cash flow while minimizing capital requirements through strategic partnerships.
Strategic M&A
Identifying and executing value-creating acquisitions with proven integration playbooks.
Who This Playbook Is For
DTC Brand Founders
Generating $1M-50M in annual revenue
E-commerce Operators
Looking to improve unit economics and profitability
Exit-Ready Founders
Preparing their e-commerce brand for acquisition
Why This Matters Now
The e-commerce landscape has shifted dramatically. Rising customer acquisition costs, supply chain complexities, and changing consumer behaviors have made profitable growth more challenging than ever. Roman's framework provides a battle-tested approach to navigating these challenges while building lasting value.
Let's explore the four key principles that have driven Peak 21's success in building and scaling e-commerce brands that don't just survive—they thrive.
The Science of Sustainable Growth
Growth isn't just about pumping money into ads—it's about understanding the mechanics of how customers find, buy, and share your products. For brands generating $10 million or more in revenue, Roman's approach emphasizes three key elements: customer coefficient, calculated scaling, and market expansion.
Understanding Your Customer Coefficient
The coefficient of a customer is one of the most overlooked growth levers in DTC. This metric measures how many new customers each existing customer brings to your brand through word-of-mouth, referrals, and organic sharing.— Roman Khan
Different product categories have vastly different coefficients:
Baby & Kids Products
"A mom buys baby clothes, and suddenly her baby is a walking—or crawling—billboard. Other moms ask, 'Where did you get that?' That mom might bring in two more customers."
Jewelry & Accessories
"For Linjer, the coefficient was closer to 0.3. A necklace or ring isn't something people are always asking about. We had to lean heavily on paid media and influencers to scale."
Knowing your coefficient helps determine where to focus your efforts.High-coefficient categories can lean into organic growth and customer evangelism, while low-coefficient categories need to invest more heavily in paid acquisition and influencer partnerships.
Calculated Scaling: The Path to $50M
For brands looking to grow to $50 million in annual revenue, Roman advocates for focused, disciplined scaling. The key is finding the right balance between growth and profitability:
If you can break even or go slightly negative on customer acquisition cost (CAC) while being profitable on lifetime value (LTV), double down on what's working. Don't diversify too early.— Roman Khan
Roman's Framework for Rapid Scaling
Focus on Core Channels
Maximize Meta and Google ad performance before expanding
Build systematic testing processes for creative and targeting
Establish clear performance benchmarks by channel
Design for Virality
Prioritize shareability in product design and unboxing experience
Create systematic ways to capture and amplify customer testimonials
Test and iterate on referral programs based on your coefficient
Monitor Key Metrics Daily
Track blended and channel-specific CAC
Monitor cohort retention rates
Watch contribution margin by product and channel
Keep close eye on inventory turnover rates
Strategic Market Expansion
If you're in a market with a large total addressable market (TAM), double down there until you've hit significant scale.— Roman Khan
This is evident in Peak 21's portfolio approach:
Raycon
Achieved nine-figure revenue with 90% from North America by focusing on market dominance before expansion.
Linjer
With smaller, high-margin products, successfully expanded internationally with 65% of revenue from outside the U.S.
Before Considering International Expansion
Achieve comfortable eight-figure revenue with seven-figure EBITDA in your home market
Run small test campaigns ($1,000-5,000) to assess CAC in new markets
Build relationships with local logistics partners before scaling
Manage Your Growth: Balancing Ambition with Sustainability
One of Roman's strongest pieces of advice is simple yet often overlooked: manage your growth deliberately. Founders frequently fall into the trap of chasing explosive year-over-year growth without considering the risks, both financial and operational.
Growth for the sake of growth is dangerous. You need to know when to push and when to hold back. The worst thing you can do is overextend yourself chasing a number.— Roman Khan
The Iceberg Scenario
"Imagine a brand projecting 100–200% growth in a single year. They stock up on inventory to match that projection, confident the demand will materialize. But then, demand stalls. Suddenly, they're stuck with mountains of unsold product, cash flow dries up, and they can't invest in the marketing needed to recover. It's like steering a ship straight into an iceberg."
How to Manage Growth Effectively
Cohort Analysis
Dive deep into customer retention and behavior over time. Know how often customers return and what their true LTV is.
Scenario Planning
Model best- and worst-case growth rates to stress-test inventory, cash flow, and marketing strategies.
Dynamic Adjustments
Revisit forecasts regularly. Monitor your CAC and LTV metrics, adjusting your strategy as conditions change.
It's easy to fall into the trap of taking every success or failure personally, but the truth is, growth should be driven by the business's capabilities and market realities—not by your desire to prove something to yourself or others.— Roman Khan
Key Takeaway
Approach growth with a clear head and a plan. Combine optimism with pragmatism by grounding your decisions in data and regularly stress-testing your assumptions. Emotional resilience is essential in entrepreneurship, but it must be coupled with strategic discipline to avoid costly mistakes and achieve sustainable success.
Operational Excellence
Building Systems That Scale
Roman's approach to operations emphasizes delegation, focus, and a unique philosophy around decentralization and talent retention. His core principle? "My unfair advantage is being great at marketing and spending my own money. I do nothing but what I am uniquely positioned to do."
I do nothing but marketing and M&A. Delegation is the name of the game. The people I work with are better operators than I am, so I stay focused on what I do best.— Roman Khan
Building Teams That Stay for Life
Peak 21's operational model challenges conventional wisdom about centralization:"People assume we centralize everything, but we don't."Fulfillment, for instance, remains fragmented and managed at the individual company level. The only things we centralize are paid marketing, influencer collaborations, and supply chain. Our biggest synergy isn't cost consolidation—it's talent.
The Peak 21 Promise
"If you join us, you can grow within the organization and eventually run one of our companies." This isn't just recruitment—it's a long-term investment in people that creates a deep pool of experienced operators.
Mastering Supply Chain Efficiency
Post-acquisition, Roman focuses on two key areas: leadership transition and supply chain optimization. Founders typically stay on for 1-2 years during transition, while Peak 21 gradually moves internal operators into CEO roles.
It's rarely in headcount—DTC companies are already lean. The biggest opportunities come from supply chain and COGS. For example, we buy $30 million worth of goods from China annually, and we've negotiated 85-day payment terms on average. This turns our suppliers into our banks.— Roman Khan
The Factory Relationship Advantage
Many founders haven't been to their factories in years. For Peak 21, they build deep supplier relationships and often cut costs by 20-30%.
Roman's 9-Step Framework for Supplier Excellence
Build Professional Relationships
Don't be an obnoxious foreigner. Focus on business, not politics.
Prioritize Factory Visits
2+ visits per year. Your factory is your most important partner.
Master Cultural Elements
Learn chopsticks. Small investment, big impression.
Negotiate with Transparency
Focus on payment terms, margin, and lead times with data.
Plan Production Carefully
Undersell and overdeliver first 4 quarters to build trust.
Master BOM Negotiations
Maintain detailed BOMs, update monthly for bestsellers.
Stay Informed on Economics
Know China's interest rates and economic conditions.
Control Quality Rigorously
QC every shipment. Don't trust anyone. Hire QC agencies.
Balance Negotiation Style
Negotiate hard but fairly. Starving partners are liabilities.
The Results
Through these methods, Peak 21 achieves significant cost savings while building stronger supplier relationships. The key is combining trust with strategic negotiation to drive both profitability and scalability.
Financial Strategy
Maximizing Cash Flow
Roman's financial playbook focuses on maximizing cash flow, leveraging negative working capital, and avoiding common financial pitfalls that can derail even the most promising businesses.
Don't Raise Equity for Inventory
Equity funding should fuel customer acquisition costs (CAC), not inventory purchases. Suppliers should be partners in financing your growth.
Ensure CAC Backs Out into Profitability
Every dollar spent on acquiring customers must translate into profitable lifetime value (LTV).
Leveraging Negative Working Capital
Negative working capital occurs when a company collects cash from customers before paying its suppliers. This creates a cash flow advantage that can be reinvested into growth, such as marketing or new product launches.
We buy $30 million of goods from China every year and negotiate 85-day payment terms. That means our suppliers are essentially financing our growth.— Roman Khan
How It Works in Practice
Negotiate Extended Payment Terms
Secure 85-90 day payment terms with suppliers
Collect Revenue First
Sell products and collect revenue before supplier payments are due
Reinvest Cash Flow
Reinvest the positive cash flow into growth without taking on debt
Strategic Financing: The Three-Lever Approach
For managing working capital, especially during high-inventory periods like Q4, Roman advocates for a sophisticated, multi-lever approach:
You need to be very pragmatic about stacking these three things in combination to alleviate your working capital going into Q4.— Roman Khan
Supplier Partnerships and Sinosure
Begin by exploring Sinosure coverage with suppliers
If Sinosure isn't viable, offer 1-2% more on specific POs for better terms
Maintain transparency throughout negotiations
Split financing costs fairly with suppliers
Asset-Based Lending (ABL)
The second lever involves securing an ABL, which typically finances 40-60% of your current inventory position. This provides a stable foundation for working capital management.
Alternative Financing
The final lever involves alternative financing sources like Wayflyer. While these options can be more expensive, they complete the capital stack when used strategically as part of a blended approach.
Using Contribution Margin as a Compass
Contribution margin serves as a critical guiding metric for decision-making. This metric represents the profitability of a single unit after variable costs:
Example Calculation
Product sells for $100 with $40 variable costs = $60 contribution margin (60%)
Mergers & Acquisitions
The New Reality
The M&A landscape has undergone significant shifts in recent years, with declining deal volume and the collapse of several high-profile aggregators. According to Roman, many of these aggregators were doomed from the start, often managed by individuals lacking deep eCommerce experience.
Volume has dropped like crazy. There's no clear signal of where the market is going right now.— Roman Khan
The Hidden Opportunity
Despite market uncertainties, Peak 21 continues to close meaningful deals with founders who value strategic partnership over pure financial transactions.
"We're finding amazing opportunities to partner with founders. If you'd asked me in 2021 if we could acquire companies of this caliber, these companies wouldn't have even taken my calls. Today, pragmatic founders are choosing to work with operators who can truly add value."
— Roman KhanWhat Peak 21 Looks For
Peak 21 focuses on acquiring profitable eCommerce brands with annual revenue between $10 million and $50 million. Their evaluation process is straightforward but thorough, typically completing within two weeks.
Sustainable Profitability
Businesses with consistent EBITDA margins and positive cash flow
Untapped Growth Opportunities
Clear potential to scale through marketing improvements, product expansion, or operational efficiencies
How to Get Acquired by Peak21
Submit Your Business
Reach out via the Peak 21 website or email with a high-level overview of your brand.
Evaluation Process
Key materials—such as management accounts and ad account performance—are reviewed over a ~2 week period.
Feedback & Offer
Within two weeks, Peak 21 provides an LOI or actionable advice. "If we don't acquire you, we'll tell you why—and give you recommendations to make your business more attractive in the future."
Key Takeaways from Roman's Playbook
Sustainable Growth
Focus on customer coefficient to guide growth strategy
Scale deliberately with clear metrics and forecasts
Expand into new markets only after dominating home territory
Operational Excellence
Build systems that enable delegation and focus
Retain talent by creating clear growth paths
Master supplier relationships with strategic negotiation
Financial Strategy
Use negative working capital to fuel growth
Apply the three-lever approach to working capital management
Let contribution margin guide key business decisions
M&A Preparation
Focus on EBITDA and market leadership
Build scalable systems that can thrive post-acquisition
Document operational processes and supplier relationships
Learn Directly from Roman Khan
Get 1:1 access to Roman's proven strategies. Discuss your specific challenges in scaling, operations, supplier negotiations, or preparing for acquisition.
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