Insights from Xobin’s CEO Guruprakash Sivabalan on Pivoting, VC Funding, and Building a $500K ARR Business

Editor’s Note: This interview has been edited for length and clarity. Startup OG spoke with Guruprakash Sivabalan, CEO of Xobin, about his journey building a $500K ARR business.

Insights from Xobin’s CEO on Pivoting, VC Funding, and Building a $500K ARR Business

In the competitive world of HR tech, few founders successfully navigate the journey from initial concept to sustainable revenue. Guruprakash Sivabalan, CEO and co-founder of Xobin, has not only built a $500K ARR business but has done so through multiple pivots, strategic fundraising decisions, and a relentless focus on customer value.

In this exclusive interview, Guruprakash shares the hard-won lessons from Xobin’s journey—including the pivot that nearly killed the company, why they turned down VC funding, and the metrics that actually matter when building a sustainable SaaS business.

💡 Key Insight: “We were so focused on building what we thought customers wanted that we ignored what they were actually telling us. The pivot forced us to listen.” — Guruprakash Sivabalan

The Beginning: From Campus Recruitment Frustration to Startup Idea

Identifying the Problem

Guruprakash’s journey into HR tech began not in a corporate boardroom, but on college campuses across India. While running campus recruitment for his previous company, he experienced firsthand the inefficiencies of traditional hiring processes.

“We were spending weeks screening thousands of resumes, conducting endless first-round interviews, only to find that many candidates couldn’t perform basic tasks required for the job,” Guruprakash recalls. “The process was broken—expensive for companies and frustrating for candidates.”

This frustration led to a simple question: What if companies could assess candidates’ actual skills before investing time in interviews?

Building the MVP

In 2016, Guruprakash and his co-founder Amritpal Singh launched Xobin (then called a different name) as a technical assessment platform. The initial product was barebones: a simple interface for creating coding tests and a basic dashboard for reviewing results.

“Our first version was embarrassingly simple,” Guruprakash admits. “But it solved a real problem. Companies could send candidates a link, they’d complete the assessment, and hiring managers could see actual work samples instead of relying on resume claims.”

The MVP found early traction with small tech companies and startups in India who couldn’t afford expensive enterprise assessment tools but needed better screening than manual resume review.

The First Pivot: From Horizontal to Vertical

What Went Wrong

For the first two years, Xobin tried to be everything to everyone—a general-purpose assessment platform for any type of role. They built assessments for developers, designers, marketers, salespeople, and more.

“We spread ourselves too thin,” Guruprakash explains. “Each new assessment type required research, validation, and maintenance. We were mediocre at everything instead of excellent at something.”

The horizontal approach also made marketing difficult. Their messaging was generic, and they competed with well-funded players in every category. Customer acquisition costs were high, and retention was mediocre.

The Pivot Decision

The turning point came when they analyzed their customer data. Despite building assessments for dozens of roles, 70% of their revenue came from technical assessments for software developers.

“The data was screaming at us, but we weren’t listening,” Guruprakash says. “We were emotionally attached to our vision of being a universal platform.”

In late 2018, they made the difficult decision to pivot. They discontinued most non-technical assessments and doubled down on becoming the best technical assessment platform for hiring developers.

Results of the Pivot

The focused approach paid off quickly:

Product Development: Resources concentrated on features that mattered to technical hiring
Marketing: Clear positioning as a technical assessment specialist
Sales: Higher conversion rates with a focused value proposition
Retention: Better product-market fit led to higher customer satisfaction

Within 12 months of the pivot, revenue had doubled and customer churn had dropped by 40%.

The Second Pivot: From Tool to Platform

Listening to Power Users

As Xobin grew, Guruprakash noticed a pattern. Their most successful customers weren’t just using Xobin for assessments—they were integrating it into broader hiring workflows.

“We’d visit customers and see spreadsheets, emails, and other tools surrounding our assessment tool,” he recalls. “Our product solved one step, but hiring managers were still juggling multiple systems.”

This observation led to the second major evolution: transforming from a standalone assessment tool into a comprehensive hiring platform.

Building the Platform

Xobin invested heavily in integrations and workflow automation. Key additions included:

ATS Integrations: Native connections with Greenhouse, Lever, Workday, and others
Video Interviews: Built-in capability for remote technical interviews
Collaboration Tools: Features for hiring teams to review and discuss candidates
Analytics: Insights into hiring funnel performance and candidate quality

The platform approach increased stickiness. Customers who integrated Xobin into their workflow were significantly less likely to churn than those using it as a standalone tool.

The Funding Decision: Why They Said No to VC

The Temptation

By 2020, Xobin had achieved product-market fit and was growing steadily. They attracted attention from venture capital firms eager to invest in HR tech during the pandemic-driven remote work boom.

“We had term sheets on the table,” Guruprakash reveals. “The money would have allowed us to hire faster, spend more on marketing, and potentially accelerate growth.”

The Concerns

Despite the allure of venture funding, Guruprakash and his co-founder had reservations:

Growth Pressure: VC funding comes with expectations of rapid growth that might force premature scaling
Control: They wanted to maintain decision-making autonomy
Unit Economics: Their business model worked at current scale—they didn’t need capital to survive
Customer Focus: They worried rapid growth might compromise customer experience

The Decision

Ultimately, they declined the VC offers and chose to grow organically.

“It wasn’t an easy decision,” Guruprakash admits. “In the startup world, VC funding is often seen as validation. But we had to be honest about what was right for our business, not what looked good on TechCrunch.”

Life as a Bootstrapped (Mostly) Company

Xobin did accept a small angel round early on, but has since been primarily revenue-funded. This approach has shaped their culture and operations:

Capital Efficiency: Every hire and expense is scrutinized
Customer Revenue: Growth comes from customers, not investors
Profitable Growth: They’ve been cash-flow positive since 2021
Long-term Thinking: No pressure for a quick exit

Building to $500K ARR: The Metrics That Matter

The Wrong Metrics

In the early days, Xobin tracked vanity metrics like total signups and website traffic. Guruprakash now considers these distractions.

“We celebrated when we hit 10,000 signups, but most of those users never became paying customers,” he reflects. “We were optimizing for the wrong thing.”

The Right Metrics

Today, Xobin focuses on metrics that directly indicate business health:

Net Revenue Retention (NRR): Currently 115%—existing customers expand more than they churn
Payback Period: Under 12 months to recover customer acquisition costs
Gross Margins: 80%+—the SaaS dream
Logo Churn: Under 5% annually—customers stick around

“These metrics tell us if we’re building a real business or just chasing growth,” Guruprakash explains.

The $500K Milestone

Xobin crossed $500K ARR in late 2023, a significant milestone for a company that had eschewed traditional venture funding. The journey took longer than VC-funded peers, but Guruprakash believes the business is stronger for it.

“We know our unit economics work because we had to make them work,” he says. “There’s no cushion of venture capital to hide inefficiencies.”

Lessons for Founders

1. Pivot Early and Decisively

Guruprakash’s biggest regret is not pivoting sooner. “We wasted 18 months trying to make the horizontal approach work when the data clearly showed we should focus. If you’re going to pivot, commit fully—half measures don’t work.”

2. Let Customers Guide You

“The best product decisions we made came from watching what our most successful customers were already doing,” he notes. “Don’t just listen to customer feedback—observe their behavior.”

3. Funding Isn’t a Strategy

“Too many founders treat fundraising as a milestone,” Guruprakash observes. “It’s not. Building a sustainable business is the goal. Funding is just a tool—sometimes useful, sometimes not.”

4. Focus on Unit Economics

“Before you worry about growth, make sure your unit economics work. If you’re losing money on every customer, scaling just means losing money faster.”

5. Build for the Long Term

“The startups that survive are the ones that make decisions based on what’s best for the company in 5 years, not what will look good in a press release next quarter.”

What’s Next for Xobin

With $500K ARR achieved, Xobin is setting its sights on $1M and beyond. Their strategy includes:

Geographic Expansion: Increasing presence in North American and European markets
Product Evolution: Adding AI-powered features for candidate evaluation
Strategic Partnerships: Deeper integrations with major ATS platforms
Enterprise Growth: Moving upmarket to larger customers

“We’re not trying to be the biggest—we’re trying to be the best at what we do,” Guruprakash says. “If we stay focused on that, growth will follow.”

❓ Frequently Asked Questions

How do you know when it’s time to pivot?

Look for these signals: (1) Customer acquisition costs increasing while conversion rates drop, (2) High churn despite product improvements, (3) Difficulty articulating clear value proposition, (4) Better traction in an unexpected segment. The key is to let data, not ego, guide the decision.

Should all startups avoid VC funding?

No. VC funding makes sense for businesses that need significant capital to reach product-market fit, have winner-take-most dynamics, or require rapid scaling to capture market share. The key is being honest about whether your business fits that profile or if slower, sustainable growth is the better path.

What’s the most important metric for early-stage SaaS?

Product-market fit indicators trump everything else. Look for: (1) Organic growth without heavy marketing spend, (2) Customers expanding usage or upgrading plans, (3) Low churn among engaged users, (4) Willingness to pay premium prices. Revenue and growth don’t matter if the fundamentals aren’t there.

How long should you give a pivot to work?

It depends on your sales cycle, but generally 6-12 months is enough to see if a pivot is gaining traction. Set clear milestones upfront—if you don’t hit them, be honest about whether to persevere or pivot again. The danger is pivoting too frequently (never giving any strategy time to work) or not frequently enough (staying committed to a failing approach).

What advice do you have for first-time founders?

“Talk to customers more than you build. It’s easy to retreat into coding or product development, but nothing substitutes for direct customer conversation. Also, don’t compare your behind-the-scenes to everyone else’s highlight reel—most startups struggle more than their press releases suggest.”

📝 Final Thoughts

Xobin’s journey from a general-purpose assessment tool to a focused technical hiring platform illustrates the importance of listening to customers and being willing to make hard decisions. Guruprakash’s choice to grow organically rather than chase VC funding demonstrates that there’s no one-size-fits-all approach to building a startup.

The common thread through Xobin’s story is pragmatism—making decisions based on what’s best for the business rather than startup mythology. Whether it’s pivoting strategy, rejecting funding, or focusing on sustainable metrics, Guruprakash has consistently prioritized long-term success over short-term optics.

For founders navigating their own journeys, Xobin’s story offers both inspiration and practical lessons: build something people want, listen to your customers, focus on sustainable economics, and don’t be afraid to make hard decisions when the data demands it.