The CEO of $1.7B-valued Productboard on the company’s Vancouver office origin story and tech’s talent crunch
Hubert Palan talks growth, sales and the great office debate.
Last May, after Productboard raised USD $72 million, I talked to Hubert Palan, its CEO. We discussed the company’s Vancouver hiring plans and hybrid work, among many other topics. We talked about the increased capital flowing into businesses whose customer growth accelerated. But while many startups saw pandemic-driven spikes, Palan said his firm's growth was different. He believed Productboard, a product management platform, had sustainable growth.
"We are in a different situation because we are in a new market category,” he told Vancouver Tech Journal. “And when you are building and establishing a new market category, the COVID shock is not as immediate. It's more the long-term implication of digitization. So we're riding that wave, but it's not the immediate, short-lasting tsunami. It's more like a tide, it's rising.”
Eight months later, the surf is very much still up. Productboard recently announced that it closed USD $125 million (CAD $159M) in Series D funding. Dragoneer Investment Group led the round, with Tiger Global as the secondary investor. Bessemer Venture Partners, Sequoia Capital, Kleiner Perkins, Index Ventures and Credo Ventures also participated. This funding round brings the company’s total amount raised to USD $262 million. It's now valued at a whopping USD $1.725 billion.
Productboard has 95 employees in Canada, a majority of which are housed in its Vancouver office, according to Neha Jewalikar, a company spokesperson. It plans to hire 70 more people across the country this year. As such, I've decided to revisit part of my chat with Palan. It provides context for what comes next for the Silicon Valley juggernaut. Here’s the Czech-born CEO commenting on topics key to his firm’s future.
On the need for in-person collaboration: “The need for physical collaboration in person differs by the team and differs by the kind of stage of the initiative that you're working on,” he told me.
“If you're on a production team, which is a highly collaborative, cross-functional team of product management, design, engineering, product marketing and quality assurance cycle—that's a very closely tied group of people. Especially in the early stages, if you're working on the discovery of new functionality that you want to put together or in the early stages of building and delivering the feature, collaboration is super important. You're brainstorming, you're prototyping your mockup, and you're throwing ideas out there.”
For those situations, Palan said physical space is important so people can do creative brainstorming. “But once you figure out the direction and clarify how the solution looks, that's when you can work completely remote," he shared. “You don't need to see each other. I would argue that for startups that are discovering solutions for new problems, it's critical to be in person. I would argue that productivity is lower if you're distributed during those periods of time.”
On his first impression of Vancouver: “It's international. It's clean. It's great. I mean, it's beautiful. And the people are nice.”
On choosing Vancouver for an office in 2019: “It was a mix of rational [thinking] and serendipity. I hired Zach Anderson to lead our customer success team as a VP and he used to work at Hootsuite,” Palan explained. “He was based out of Seattle, so he knew people. That's how it all happened because Hootsuite was based out of Vancouver.”
Back in 2020, Invest in Canada’s Sean Elbe claimed Productboard chose Vancouver over Seattle, Austin and Toronto. He wasn’t wrong. Palan said his team looked out east and down south, but zeroed in on a few factors that led them to choose Vancouver. They looked at timezone and access to talent first, Palan outlined. They dug into “what the market is like for the skills that we need,” he said. They asked, “Do we have some relationship to an experienced leader who can be the most senior person at the office? That can oversee things and be the cultural bearer and, you know, help run the office?”
Back then, that person ended up being Anderson’s right-hand man, John Henwood, according to Palan.
On the growing talent crunch: The competition has been heating up for years, Palan said. “You know, regardless of location, the market is so competitive because of all the influx of money and the ability of people to work remotely and choose from a wider set of employers that resonate with their mission.”
How can companies compete? “It's crazy competitive and it comes down to walking the talk and building the right company culture and treating people with honesty, integrity, respect. And then differentiating yourself and explaining why the mission that you have as a company—why does it matter?”
On Productboard’s advantage: On why Productboard is well-positioned to attract workers, Palan has two points. First, a new and unique opportunity in what they’re building. “Product management is the last major function of pretty much any company that doesn't have a system of record,” he suggested. Sales, customer success, support, marketing and engineering all have major platforms to build on like Workday, Salesforce, Marketo, Hubspot and other well-known tools. Product management as a function doesn’t have one—yet. “So that's exciting because we have the opportunity to dominate that whole new category,” Palan argued.
Palan’s other point is that his team has been thoughtful about scaling the company. Productboard could’ve raised capital at a higher valuation in previous rounds, he said. But Palan and his staff chose not to. He said it's because he wanted to ensure upside for new and current employees moving forward. (It’s common practice to use stock options as compensation in scaling tech companies. The idea is that as the company sees increasing success, employees benefit from a stake in the business that grows in value.)
“If you raise money at a $10 billion valuation, at some companies, there's very little upside for employees to participate in the future appreciation of the equity," he explained. "So I feel like we’re balancing it well."