Cutting through the hype, smoke and mirrors these numbers of revenue show what’s really happening at Twitter, Groupon and their big cousins.
2012 Revenue Per Employee
Here’s a data table comparing the 2012 reported revenue over employee headcount, found from online public data.
Comment: Foursquare is officially “not to be focussing on revenue, but on growth”, in contrast to the others, so enjoys a little unfair comparison here.
Facebook shows highest revenue per employee
As reported by public available data, Automattic, Zynga, Twitter, and Facebook are all making over $300k per employee despite tech salaries often ranging in 100k range, with additional costs.
300k is benchmark
300k per employee can therefore be used as a benchmark for good revenue per employee. For comparison, Facebook is pushing over $1m per employee, and Google (50b revenue for 53k reported employees) is about the same, at $946k per employee. And while WordPress team has a modest $45m their revenue per employee stands toe to toe with the big dogs.
True success is in the ratios
People have a tendencies to compare apples with pears, such as Groupon’s revenues with Yelp’s, despite the massive difference in size and expenses occurred making same revenue. Unless you’re looking at the opportunity costs of one sector vs another, a much more nuanced picture is from ratios. It gives you a much better understanding of how you’re company is really performing.
Example, the startup scene is famously hyped, and early stage success tends to be measured in headcount. This is not a great measure since headcount is an expense and therefore hardly a great measure of success in itself (any idiot can hire lots of people). The best measure of success (or productivity) early stage is employees per user.
Best pre revenue performance
Among the most famous ratios, Instagram comes out on top, with one employee for every 2.07 million users.
The second highest user-to-employee ratio is OMGPOP (Draw Something) with only one employee for every 875,000 users (fastest growing mobile product in history, scaled to 50 million users within 50 days so probably never even got the change to hire).
On the other end of the scale are Aardvark, with one employee for every 1,800 users, and Zappos with one employee for every 3,400 users.
This came from two super informative blogs:
Revenue per employee, by Web-strategist: Full article here
users per employee, by Wired. Full article here