Overview of Practical Founders Podcast — Episode #182: Why Focus Beats Funding (Luigi Mallardo)
This episode features Luigi Mallardo (former founding CRO of Wofu) in conversation with host Greg Head. Luigi tells the practical, go-to-market story of Wofu — a European B2B SaaS company focused on time & attendance — from early product/market fit through growth, acquisition by Visma, and his post-exit work. The discussion centers on strategy over funding, disciplined focus, building predictable revenue engines, and how to plan an exit while preserving optionality.
Episode summary
- Wofu (founded ~2015) built a cloud time & attendance product aimed at SMBs and mid-market customers; started horizontal but then narrowed focus to a specific functional use case.
- Luigi joined early as an angel (~€2k MRR), became operational as CRO (around €50k MRR), and led the go-to-market scaling until the company was acquired by Visma in 2022.
- At exit the business was growing efficiently (roughly €0.5M MRR / ~€5M ARR range reported) with ~50–70 employees; the acquisition price range Luigi cites is between €15M–€30M.
- Growth sequence: 100% inbound low-ticket → build outbound SDR/AE engine and revenue operations → increase average revenue per account (5–7x over three years) → add partnerships and customer success as strategic differentiators.
- Wofu focused geographically (primarily Spain, ~95–98% revenue) while ensuring the product/platform could scale to LATAM and continental Europe.
- The team proactively prepared for an exit (hired an M&A boutique, ran weekly pipeline/control-tower meetings) rather than reacting to a sudden buyer.
Key takeaways
- Focus beats funding
- Narrow ICP and use case early. Deep focus increases traction and gives you more optionality later to expand.
- Practical allocation: ~75–80% of pipeline on core monetizing markets/use cases; ~20% reserved for experiments.
- Optionality > immediate valuation
- Having the freedom to say “no” to bad offers enables better strategic outcomes (choice of buyer, cultural fit, product continuity).
- Diversify revenue streams gradually
- Start with inbound; add outbound (SDR → AE), build revenue ops to measure funnel, then add partnerships.
- Invest in Customer Success early
- Wofu’s single senior hire was a Customer Success Director. Low churn and strong post-sale value solidified the company vs. large-funded competitors.
- Be proactive about exits
- Prepare the M&A pipeline early, build two pitch narratives (product buyers vs. revenue/market buyers), and run regular meetings to warm prospects.
- CRO as a builder role
- A modern CRO needs to be strategic and hands-on: build processes, coach teams, shape product–market decisions and go-to-market execution.
Growth & go‑to‑market playbook used at Wofu
- Stage 1: Product-market fit + inbound marketing
- Low-ticket, marketing-led; product solved a clear operational problem (time tracking).
- Stage 2: Add outbound and revenue ops
- Built SDR roles, AEs, CRM processes, conversion tracking across ~8–9 funnel stages.
- Increased ARPA 5–7x over three years by moving to larger account targets.
- Stage 3: Partnerships & compliance value props
- Partnerships (e.g., private-label with Sage) and compliance/regulation tailwinds added predictability and buyer interest.
- Stage 4: Prepare exit optionality
- Hired M&A boutique, ran weekly control-tower meetings, kept optionality (didn’t have to sell).
Fundraising, exit and ownership choices
- Wofu deliberately did not pursue large VC-driven hypergrowth; instead took "smart funding" and kept control and optionality.
- Two VC firms later bought ~50% of shares (timing near pandemic), but the founding team maintained strategic direction.
- The company was sold to Visma (a large European software acquirer) in a deal Luigi estimates €15M–€30M; an earn-out and founder transition were part of the arrangement.
- Benefits of chosen path: practical valuation, cultural fit with buyer, product continuity, ability to reject poor offers.
Notable quotes & soundbites
- “Focus is the F-word.” (Luigi) — focus is uncomfortable but essential.
- “Reduce the space of optionality to get more optionality.” — constraining the immediate scope enables better expansion options later.
- “Optionality beats valuation.” — more control over future choices can be more valuable than a slightly higher headline price.
Advice for founders (actionable)
- Decide early: What do you want the company to be when it grows up? (10–50M practical exit vs. billion-dollar VC path)
- Nail the use case and ICP before scaling horizontally.
- Build predictable funnels: measure conversion through funnel stages; create a revenue operations function.
- Diversify acquisition channels in layers: inbound → outbound (SDR → AE) → partnerships.
- Make Customer Success a strategic priority early to reduce churn and drive word-of-mouth.
- Run a weekly “control-tower” for go-to-market and M&A warming: CEO + CRO + M&A advisor to keep optionality and track interested buyers.
- Allocate pipeline: ~75–80% to proven markets/verticals, ~20% for experiments.
Who this episode helps most
- Practical founders and early-stage SaaS leaders aiming to scale deliberately (1→10M+ ARR) without large VC rounds.
- CROs, heads of sales and GTM leaders who need a playbook for building scalable, predictable revenue engines.
- Founders thinking about timing and strategy for exits and how to keep optionality.
Final note
Luigi’s story is a strong example of a focused, pragmatic path: prioritize a narrow use case and market, build repeatable GTM systems, invest in customer success, and prepare the M&A pipeline early. The result: sustainable growth, optionality at exit, and a practical acquisition outcome that preserved the product and team.
Credits: Practical Founders Podcast — host Greg Head; guest Luigi Mallardo (former CRO, Wofu).