From Vision to Venture: Roman Khan's Journey in the DTC Space

Roman Khan, the president and founder of Peak 21, has carved a notable niche in the direct-to-consumer (DTC) business landscape with his innovative and strategic approach. Peak 21 specializes in acquiring and growing DTC brands, driving their success through strategic acquisitions and operational excellence. Roman's journey from private equity to leading a portfolio of thriving DTC companies is a testament to his entrepreneurial acumen, strategic vision, and relentless pursuit of growth. With a keen eye for potential and a hands-on approach to business management, Roman has successfully transformed numerous brands into industry leaders.

Open and accessible, Roman extends an open invitation to company owners interested in selling to connect with him on social media platforms like Twitter and LinkedIn. This approach fosters a collaborative and transparent environment for business expansion, allowing entrepreneurs to explore opportunities with a seasoned expert who values mutual growth and success. Roman's commitment to building lasting relationships and his reputation for integrity and excellence make him a trusted partner in the constantly shifting DTC space. This article, based on Episode 48 of The Operators Podcast, aims to explore Roman Khan’s career and the lessons he’s learned along the way.

Roman's Early Career and Lessons from Rocket Internet

Roman Khan's career began in the world of private equity, where he gained invaluable experience in the complex processes of buying and selling companies. This early phase of his career was instrumental in shaping his analytical skills and understanding of financial intricacies, providing a solid foundation for his future endeavors. In private equity, Roman developed a keen eye for identifying promising investment opportunities and learned the importance of due diligence, strategic planning, and operational improvements to enhance business value. This period also exposed him to a variety of industries, broadening his perspective and equipping him with a diverse skill set.

A significant turning point in Roman's career came when he was recruited by Rocket Internet to lead Lazada, an Amazon clone in Southeast Asia. Under his leadership, Lazada experienced explosive growth, scaling from 100 orders a day to an astonishing one million orders daily. This role was a high-pressure environment that demanded not only exceptional management skills but also the ability to adapt quickly and make data-driven decisions. Roman's time at Rocket Internet taught him the critical importance of knowing your numbers inside out. The rigorous, fast-paced environment fostered a culture of accountability and precision, where every decision was backed by detailed analytics and financial metrics.

One of the most valuable lessons Roman learned at Rocket Internet was the importance of hiring and nurturing talent. He realized the immense potential of "insecure overachievers" – individuals with high potential who required guidance and support to fully realize their capabilities. Transforming these individuals into secure achievers who could confidently lead businesses became a cornerstone of Roman's leadership philosophy. By fostering an environment that encouraged growth, transparency, and accountability, Roman built strong, capable teams that could drive the company's success. This experience highlighted the value of investing in human capital and demonstrated how nurturing the right talent could significantly impact a business's trajectory.

The Launch of Linjer and the Shift to DTC

Luxury goods without the luxury markup – that was the vision that led Roman Khan to resign from his high-profile job and start Linjer with his partner, Jennifer. Their goal was to offer high-quality leather goods produced in the same factories as top luxury brands, but at a fraction of the price. To achieve this, they cut out traditional marketing costs by selling directly to customers online. This direct-to-consumer (DTC) model allowed them to maintain control over their brand and pricing, ensuring that their products remained affordable without compromising on quality.

One of the critical strategies Roman and Jennifer employed to fund Linjer and validate their business idea was crowdfunding. This approach allowed them to maintain full control of their venture without the need to take on investors. Their first crowdfunding campaign on Indiegogo in 2014 raised $144,000, which was used to finance their initial purchase order and to gauge customer interest in different colors and styles. The success of this campaign led to a second crowdfunding effort on Kickstarter in 2015, which raised over $350,000 in just over a month. These campaigns not only provided the necessary capital but also validated their market, confirming that there was a significant demand for their products.

However, the journey to success was not without its challenges. Roman and Jennifer spent several years sourcing high-quality materials, finding a suitable supplier, building a potential client base, developing their brand, and designing their collection. One of their biggest hurdles was finding a manufacturer willing to work with their smaller production quantities, which were much lower than those of the major brands the factories typically served. After attending numerous trade fairs around the world and making countless cold calls, they finally secured a manufacturing agreement. This perseverance paid off, allowing them to take another step toward realizing their dream. The experience underscored the importance of persistence and adaptability, key traits that would continue to drive Linjer’s success in the competitive DTC market.

Building a Portfolio of DTC Brands

Following the success of Linjer, Roman Khan set his sights on expanding his influence within the DTC space by building a portfolio of brands. Leveraging the credibility and financial success Linjer provided, Roman began acquiring equity stakes in other promising DTC companies. His role as a fractional Chief Marketing Officer (CMO) allowed him to apply his expertise across multiple brands, driving their growth through strategic marketing, operational efficiencies, and his deep understanding of the DTC model. This hands-on involvement enabled him to identify synergies and implement best practices across his portfolio, fostering a collaborative environment where each brand could thrive.

By 2019, Roman's portfolio had grown to achieve $50 million in group revenue. This impressive milestone was a testament to his ability to identify and nurture high-potential DTC brands. His approach emphasized not just financial investment but also active engagement in the day-to-day operations of these companies. This hands-on strategy ensured that each brand benefited from his experience and insights, leading to significant growth. The portfolio's revenue surged to $200 million in 2020, an achievement made even more remarkable by the fact that it was accomplished without external capital. This organic growth highlighted Roman's keen eye for scalable business models and his adeptness at fostering sustainable growth.

The strategic investment from the Yam family and other investors marked a new chapter for Roman's portfolio. With additional financial backing, he was able to pursue larger acquisitions and further diversify his portfolio. This influx of capital provided the resources needed to accelerate growth and expand market reach. Roman's ambition is to reach $100 million in EBITDA within five years, with the current run rate already slightly north of $30 million. His criteria for acquiring new companies remain focused on strong cultural fit and the potential for continued growth. By prioritizing both financial performance and the quality of the people he works with, Roman ensures that his portfolio not only grows in size but also in strength and cohesion.

Acquisition Strategy and Criteria

Roman Khan's acquisition strategy is both ambitious and methodical, focusing on identifying companies with strong growth potential and a solid operational foundation. His criteria for acquisition target companies with an EBITDA between $1.5 to $5 million. This range allows him to find businesses that are already profitable but have significant room for further growth and optimization. Roman's extensive experience in the DTC space gives him the ability to quickly assess a company's potential, making informed decisions that align with his long-term vision for Peak 21.

A key component of Roman's acquisition strategy is cultural fit. He places a high value on working with founders who are not only successful but also share his values and vision for the future. Roman seeks out entrepreneurs who are passionate, driven, and committed to their businesses, ensuring a smooth transition and continued success post-acquisition. This focus on cultural alignment helps maintain the integrity and ethos of the acquired brands, fostering an environment where both the companies and their employees can thrive. By prioritizing relationships and mutual respect, Roman ensures that each acquisition is more than just a financial transaction; it's a partnership built on trust and shared goals.

Roman's ambition to reach $100 million in EBITDA within five years underscores his strategic approach to acquisitions. With a current run rate slightly north of $30 million, he is well on his way to achieving this goal. The strategic investment from the Yam family and other investors has provided the necessary capital to pursue larger acquisitions, further accelerating growth. Roman's meticulous selection process and emphasis on cultural fit, combined with his operational expertise, position Peak 21 to continue its upward trajectory. His ability to integrate new acquisitions seamlessly into his portfolio, while preserving their unique strengths, is a testament to his visionary leadership and strategic prowess.

The Role of Supply Chain and Negotiation

One of the critical aspects of Roman Khan's success in the DTC space is his innovative approach to supply chain management and negotiation. He treats suppliers not just as vendors but as strategic partners, recognizing that their cooperation is essential for achieving operational excellence. Roman employs the Bill of Material Leveling and Evaluation (BOMLE) negotiation approach, which emphasizes transparency and collaboration. This method allows both parties to clearly understand the costs involved and work together to find mutually beneficial solutions. By fostering strong relationships with suppliers, Roman ensures that his companies receive high-quality materials at favorable terms, which is crucial for maintaining the quality and affordability of their products.

Roman's negotiation strategy extends beyond securing competitive prices. He focuses on obtaining favorable payment terms and financing options from suppliers, effectively turning them into a source of growth funding. By negotiating extended payment terms, Roman can improve cash flow and allocate resources more efficiently, allowing his companies to invest in other areas of growth such as marketing, product development, and customer acquisition. This strategic use of supplier financing reduces the need for external capital and supports sustainable expansion. Roman's ability to leverage these relationships demonstrates his deep understanding of supply chain dynamics and financial management.

Roman's approach to supply chain management is characterized by a commitment to sustainability and ethical practices. He carefully selects suppliers who adhere to high environmental and social standards, ensuring that the materials used in his products are sourced responsibly. This commitment not only aligns with consumer demand for ethical products but also enhances the reputation and credibility of his brands. By integrating sustainable practices into the supply chain, Roman differentiates his companies in the competitive DTC market, attracting customers who value quality and corporate responsibility. This holistic approach to supply chain management, combining strategic negotiation with a focus on sustainability, is a key driver of Roman's success in building and growing DTC brands.

Conclusion: Lessons from Roman Khan's Journey

Roman Khan's journey from a private equity professional to a powerhouse in the DTC space is a compelling story of strategic vision and relentless pursuit of excellence. His experiences at Rocket Internet and the launch of Linjer have shaped his approach to business, emphasizing the importance of knowing your numbers, nurturing talent, and building strong supplier relationships.

For entrepreneurs and business owners, Roman's story offers valuable insights into the strategies that drive success in the DTC space. Focus, strategic acquisitions, and operational efficiency are key pillars of his approach. By understanding these elements, aspiring business leaders can draw inspiration from Roman's journey and apply these lessons to their ventures.

For DTC company owners considering a sale and those wanting to learn more about the DTC industry, tune into The Operators Podcast on Spotify, YouTube, or Apple Podcasts.


Jason Panzer
Jason Panzer
Sean Frank
Sean Frank
Mike Beckham
Mike Beckham