#421 – Alberto Gimeno on letting retention decide who you sell to

A story about a 40% revenue cut that paid off.

This episode is for sales-led SaaS CEOs who find it hard to say no to paying customers, even when it holds them back.

Most SaaS companies count all revenue as good revenue.

Alberto Gimeno, co-founder and CEO of Invofox, came into document processing as an outsider. He didn't know which customers would be best, so he tested four or five segments by selling to each of them himself.

At their first million in revenue, they let 40% of it go. They kept only software companies, where net revenue retention ran at 140–150%.

And this inspired me to invite Alberto to my podcast.

We talk about why message-market fit and product-market fit are two separate problems. You'll also hear why pushing up your win rate too often means leaving money on the table. And why the customers who end up bringing in 85% of revenue are often hard to spot upfront.

We zoom in on two of the 10 traits of remarkable software companies:

Acknowledge you cannot please everyoneMaster the art of curiosityBoth are chapters in The Remarkable Effect.

His story shows that remarkable software companies are prepared to cut deep into their revenue to get a focus advantage.

Here's one of Alberto's quotes that captures why picking your customers is a product decision too:

"Choosing a segment is not only about your go-to-market operations, it changes the product that you build. An accountant, a construction company and a developer are going to need three different things even when they're trying to solve the same problem."