Hubert Palan: how AI upended the Czech firm Productboard

Hubert Palan, co-founder and CEO of the Czech company Productboard, told The Forbes Show podcast how artificial intelligence forced his business through a painful overhaul — and why, despite layoffs and falling revenue, he considers the technology a huge gift to humanity and to his company.

Productboard, founded by Palan in 2004 together with Daniel Hejl, grew into a tool that helps product managers work more effectively. Today the company spans two continents, with offices employing more than 500 people in San Francisco, Vancouver, Dublin, London, Prague and Brno.

The past four years have been tough for the entire software industry — the aftermath of the pandemic, high inflation and rising interest rates reshaped the rules of investing. Productboard had to weather a recession, a cooling market and a wave of layoffs.

For Palan, it was a difficult trial, not just managerially but personally. “I'm an entrepreneur who likes to build and create, not tear down. As a company founder, I hire people hoping we'll work together for a long time. And suddenly you have to radically restructure the company and let some people go. That was hard. On the other hand, it toughened us up and prepared us for the future,” he admits.

The biggest challenge came with the rise of artificial intelligence, which forced the company to completely rework its strategy. “AI is amazing. I'm incredibly grateful for what it has given us — both humanity and the company. I see it as a huge gift. I believe it will help humanity move much faster, cure diseases and advance science. And for our business, it has completely changed the potential of what we can do as Productboard,” Palan says.

The first attempts to roll out AI in 2023 weren't very successful, since they touched only small parts of the company. A more radical approach taken later is already paying off, the entrepreneur notes.

“Indeed, investing in AI slowed down development of features that existing customers wanted. That led to a temporary drop in revenue and the loss of some customers. On the other hand, the move is already starting to pay off — you can see it in the growing usage numbers and data consumption,” Palan says.

According to him, the business model of the entire software industry is shifting too: companies are moving away from charging per individual user toward charging for actual service consumption.