Daniel Lee On Raising $70 Million To Build An AI-Driven Sales Assistance Platform To Automate Sales Tasks

In the fast-paced world of tech entrepreneurship, Daniel Lee stands out with a remarkable story of resilience, innovation, and vision.

Co-founder of Nooks, an AI-powered platform transforming the productivity of sales teams, Daniel recently announced a $43M funding round, bringing the total raised to $70M. Nooks’ top-tier investors include Kleiner Perkins, Lachy Groom, Stifel Venture Banking, and Tola Capital.

In this episode, you will learn:

• Nooks transitioned from a co-working spaces app to a dynamic virtual office platform, adapting to remote work trends.
• Daniel Lee emphasized deep user empathy, gathering insights to craft features that resonate with teams.
• Nooks automates dialing, coaching, and prospecting busywork to help sellers boost their pipeline and focus on the human side of selling
• By securing $70M in funding, Nooks aims to redefine how remote teams interact and work together.
• Lee’s entrepreneurial journey highlights the importance of perseverance and learning from setbacks.
• Nooks’ success underscores the growing demand for tools that enhance productivity and camaraderie in remote settings.

 

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About Daniel Lee:

Dan Lee is the Co-Founder and CEO of Nooks since 2020. Daniel was previously a Machine Learning Engineer at Scale AI in 2020. In 2019, they worked as a Quantitative Strategies for IEX Group, Inc. and as an ML Researcher for Cerebras Systems.

Connect with Daniel Lee:

• LinkedIn
• Crunchbase
• TheOrg
• Zoominfo

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty. Hello, everyone, and welcome to the Deal Maker Show. So today we have an amazing founder, a founder that is joining us and that they has built it, scaled it. I mean, ah you name it. you know They recently announced their latest round of financing. you know They raised over $70 million. dollars about 80 people, and they’re riding this rocket ship. so Again, we’re going to be talking about their founding story, some really interesting stuff there, how he met his co-founders at school, also how they went about um you know going, you know raising their last round. It was a round that came out of nowhere you know with a really strong partner such as a client of Perkins,

Alejandro Cremades: And then also what the early days looked like and and how they really you know found that interesting you know inflection point there when it came out the beginning with sales teams. But again, really interesting discussion, super inspiring journey. And without further ado, let’s welcome our guest today, Dan Lee. Welcome to the show.

Daniel Lee: Thanks, Alejandro. Super excited to be here.

Alejandro Cremades: So originally born and raised in New Jersey. Give us a walk through memory lane. How was life growing up for you?

Daniel Lee: Yeah, for sure. I was actually born in Manhattan, grew up in New Jersey, um and and then cameout to the Bay Area for school. But um say, growing up, um my main hobbies and activities, one was ice hockey. ah So I grew up playing ice hockey since I was little. I still really enjoy ice skating, rollerblading, you name it.

Daniel Lee: um And another was kind of science and math and and research. um So I was always you know kind of doing ah extra science, ah extracurriculars. um I remember one time in in high school, I got in trouble for for launching some sugar rockets that I had made and cooked up. um But yeah, those those were my main interests going you know growing up.

Daniel Lee: and then ended up going to to Stanford for for college. That’s where I met my co-founders, Rohan and Nikhil.

Alejandro Cremades: How do you get into computers and AI and machine learning and all of that jazz?

Daniel Lee: Yeah.

Daniel Lee: Yeah, at Stanford, it kind of just happens. Actually, you know, and ever no so i um ah in high school,

Alejandro Cremades: But was it before Stanford? Was it before Stanford? I mean.

Daniel Lee: took an AP computer science class and I really disliked it actually. um And I was actually doing some physics research at Princeton Plasma Physics Lab in high school.

Alejandro Cremades: Wow.

Daniel Lee: And that ah piqued my interest in materials, material science. So I thought I might do something around that longer term. um When I went to Stanford and I started, I wasn’t studying any computer science.

Daniel Lee: I was thinking it might be either physics or math. Um, but then all my smartest friends, you know, uh, Rohan and Kiel and, and, you know, a bunch of others were studying computer science and I was like, Oh, I must be missing something. Uh, so I tried a couple of computer science classes, really enjoyed it and then, um, kind of sprinted to catch up. Cause I felt behind. Um, and I think, uh, when you study computer science and you learn to build things, naturally you tend to want to go build things. Um, so that, uh, definitely played a big role in in starting Nooks.

Alejandro Cremades: So let’s talk about a dropping out of Stanford because I know that, I’m sure your your parents were not happy about it.

Daniel Lee: um So you see, i I was fortunate in a sense. um It was, so i can I can explain the chronology. I was class of 21 at Stanford. I first stopped in 2019 actually. So I did a little bit over two years. um And I started working at Scale AI on their machine learning team as like a, um you know,

Daniel Lee: in during the school year internship where I stopped school and I was living and working in SF. um And, and I actually plan to study abroad at Oxford, uh, the, the following quarter after, after scale, but the pandemic, you know, obviously that was canceled, uh, scale started working remotely. So I went back to New Jersey. Um, and you know, then after wrapping that up, you know, the alternatives, one was remote classes and the other is, you know, kind of just continuing working, hacking on things. Um, and, uh, I was already a bit ahead. So the, the.

Daniel Lee: Remote classes, ah based on what my friends were telling me, didn’t sound super fun. So instead I started hacking on ah Nooks ah with this idea, how do you actually help making, ah make working slash, you know, studying remotely a much better experience, um kind of this concept of a a virtual office.

Alejandro Cremades: So then let’s talk about, a you know because that’s that’s kind of like when you were ah when you were at ScaleAI, obviously the whole thing, pandemic hit, nukes, it’s more like a site you know gig type of work. So how does the whole concept of maturing and graduating like um you know weekend project, you know to to two to really taking it seriously enough to say, hey, I think that this may be my next chapter and and perhaps you know I give my notice and go all in.

Daniel Lee: Yeah, great question. It was definitely a gradual process. um And I would say Nooks starting as a weekend project is maybe, um it was it was like, a I was doing it full-time, right? um ah Not as like a school project, not, you know, but but I was pretty interested. Like I was i got really into it. um And I probably like the sequence of events ah that that kind of led to more and more buy-in.

Daniel Lee: um First was deciding not to do my next summer internship that was lined up. um And that wasn’t a super hard decision. I was enjoying, you know, working on Nooks a lot. People were starting to use it.

Daniel Lee: And I figured I’m going to learn a lot more doing this. um you know But at the so at the time, it was still a project. My my ah ah parents were actually a little bit worried about that. um And then the next probably big step was getting Rohan and Nikhil to join in.

Daniel Lee: So you know we were all really close friends at Stanford. They were roommates. I was ah a quasi roommate. And in the early iterations of Nooks, I often showed showed them some of the prototypes. And I remember Rohan in particular was always like, hey, this sucks. like Why don’t you change it this way or you know make this improvement?

Daniel Lee: And at some point I was just like, dude, like, just come, come help me build this. Um, and that’s how, uh, that’s how Rohan joined and in, in Nikhil, uh, very shortly after. Um, and then probably the, the, um.

Daniel Lee: last step in in committing and really going all in and making this a company was um over that summer we had started getting a bunch of Stanford classes using Nooks and started you know basically ah gaining some some traction and momentum. ah And that fall, some VCs started approaching us and saying, hey, you should actually think of this as a company and raise some money.

Daniel Lee: um

Alejandro Cremades: and we’ll We’ll get into that in just a little bit. I want to ask you, what were the early days like? i mean Was there any ramen noodles in there or not?

Daniel Lee: Yeah, so um started working just at home in in New Jersey. um We actually then moved to Rohan’s basement in Virginia. um So there there were a couple of us in in Rohan’s family’s home in in Virginia. um Rohan’s mom was very nice and enough to to make us dinner often, so no no actually ramen noodles, um but definitely that vibe.

Alejandro Cremades: That’s incredible. so I guess for the people that are listening to um to get it, what ended up being the business model of Nooks, how do you guys make money as well?

Daniel Lee: Yeah, great question. So um really quickly, like background on Nooks or high high level idea of like what what Nooks is, ah we make sales seems more productive. So sales reps today spend a lot of time um doing things like writing emails and making calls and doing research online. um And AI is really good at doing these things.

Daniel Lee: um So, our goal is, can you automate this busy work, ah so that sales reps can focus on the more human parts of the job. And we have three um kind of main AI assistants, or, or products, um and I can kind of explain how how we monetize on each.

Daniel Lee: um We have a dialing assistant, which helps automate the manual parts of calling. So think like finding phone numbers, skipping answer machines and ringing, taking notes on calls. um We have a ah coaching assistant ah that helps you basically identify areas to improve on calls. Basically, are people answering questions the right way? We have an AI role play, part of that as well, that simulates customers and a sales rep can practice trying to sell to it.

Daniel Lee: um And then the prospecting assistant is the the third piece, which automates um a lot of the rest of the manual work in doing account research, ah prioritizing lists of prospects, and actually drafting emails towards them.

Daniel Lee: Um, and the prospecting and coaching assistant, uh, sorry, the the dialing and coaching assistant, uh, both charge on a per user basis. Um, uh, like, so it’s a per seat, uh, model and the prospecting assistant is charged more on a usage based model. Uh, and it’s all, you know, kind of SAS subscriptions.

Alejandro Cremades: So what was that moment like when you guys were like, I think that maybe we’re into something with this.

Daniel Lee: Great question. um So ah probably there were maybe two distinct phases of of Nooks. In the early days, we were not focused on sales teams. ah We were interested in kind of more, um I can share actually, I was interested in two problems ah getting started at Nooks. One was, hey, everyone’s working remotely. ah Can you help them work as you know efficiently as they were in person with this like virtual office? Kind of like a Zoom, but for co-working instead of for meetings.

Daniel Lee: um And then the second problem I was interested in is, hey, if you get that virtual office working, you have a lot of data on how people work. um And can you actually make it smart? So can you automate the manual parts of the job? Can you automate feedback loops to help people get better?

Daniel Lee: um And ah in that initial you know kind of first phase of Nooks, we spent a lot of time on that virtual office piece. um And you know the initial traction, we had a lot of Stanford classes using Nooks for office hours during the pandemic.

Daniel Lee: um ah that you know that’s kind of our initial set of users, and then started expanding to a bunch of startup teams, like sales, marketing, products, like varying and you know ah types of startup teams. And then in the second phase of Nooks, that’s when we started really making it smart and doubling down on on sales teams, focused on you know not only how do we help them collaborate, ah but make them a lot more productive. And i’ll I’d say like the aha moment there is,

Daniel Lee: you know We get feedback you know all the time, even kind of since the early days, where people sales reps and our users say, nooks makes my job fun. um People say, I would quit if we you know couldn’t use nooks. Or I’ve gotten promoted ah because I’m able to learn and you know get better at my job via nooks. Or even I’ve made more money.

Daniel Lee: because I’m able to hit quota and be more productive because of Nook. So I think um that’s been kind of this second aha moment, ah where we’ve seen that Nooks is able to really deliver ah meaningful value to to users.

Alejandro Cremades: So you were alluding to earlier, you know, how the whole fundraising journey, you know, started and with the VCs, you know, giving you some thoughts and guidance. and So I know that you guys have raised about $70 million. dollars The last round was announced in early, earlier this year, like a couple of months ago. But walk us through what was that journey to of going through the finances?

Daniel Lee: Yeah, great question. um So you know for context, this is my first company. um I have been really fortunate ah to to have a lot of help ah during you know learning the the fundraising and company building process from really great advisors. um And um I’d say the first round that we did um That one we were getting approached by by VCs. Nooks was still a project at the time, right? And we were getting approached by VCs saying, hey, you should, you know, make this a company and think about scaling it. um ah So really leaned heavily on advisors to to evaluate like, how do we think about it? Who should we talk to? um And ended up raising our our seed round um kind of in late 2020, early 2021.

Daniel Lee: Um, and then since then, um, you know, our, our series a and our our recent series B, um, uh, each has been kind of, uh, kicked off by like a preemptive offer. Uh, and then, and then we’ve, um, you know, kind of gone out and and tested the market.

Alejandro Cremades: So talk to us about the um you know the the the whole process, like the expectations that you experience and and how you know the whole interaction you know was changing with with investors to us. You were going from one financing cycle to the next.

Daniel Lee: Yeah, so when when you say the changing expectations, do you mean, like, the the differences in race?

Alejandro Cremades: because yeah Because it’s not the same, like for example, what you experienced at a seed stage was probably different you know than what you experienced at a series A in the latest round.

Daniel Lee: Yeah, totally.

Alejandro Cremades: also so So walk us through that too.

Daniel Lee: Yeah, so at The Seed, you know, we had no deck. We had no company. it was ah ah We had a product, and we had a bunch of, ah you know, varied different groups.

Daniel Lee: ah having giving great feedback on it. um so the seed was ah you know The seed was probably less of like a typical structured funding round. um and you know This was also our first time fundraising.

Daniel Lee: ah so I think we were lucky you know at every round to have ended up with with great investors who’ve then helped kind of with with subsequent rounds. um But yeah, that that seed round was probably the most interesting to to navigate. um And then at the Series A, um that one that one was was definitely different in the sense by that time we had already started focusing on um ah making sales seems more productive.

Daniel Lee: We already had, you know, we had revenue um and starting at the Series A, they were actually, it was more metrics driven. It was more like, okay, what is the longer term vision? What is the market size, right? A lot like more of the fundamentals. um And by the Series B um ah really, really much stronger emphasis on on metrics, on on growth and retention. And also of course on on the TAM and our our ability to go in and capture it.

Alejandro Cremades: So this last one too, where you got the round being preempted and you got Kleiner Perkins coming in, what does it look like when a round is preempted? Because i mean most people that are listening you know to us now, they’re probably thinking of the whole race of knocking doors. and how How did it work differently this time around?

Daniel Lee: Yeah, I think um it’s a good question. So one thing that that we’ve um kind of done around and and even in between rounds is um leveraging investor connections to actually get intros to their portfolio companies.

Daniel Lee: um We sell to a lot of you know growth stage tech companies and ah you know VCs often invest in a lot of these growth stage tech companies. So um you know even outside of funding rounds, we’ve kind of kept in in in contact with investors ah to help you know break you know break into their portfolio companies. um And at the most recent rounds, one of these firms that we you know was was helping us ah ah basically sent like a reverse pitch deck, and which indicated, hey, they’re they’re gearing up to to make an offer. And you know it’s it’s important in fundraising. it’s It’s best because this is a ah not a, um I’m forgetting the word here,

Daniel Lee: So it’s not a perfect market, right? Like there’s not perfect visibility. So you actually want to go um not make a decision based on one offer, but but actually collect multiple data points to to make a decision. um So then we we kicked off a bunch of other conversations with investors that we had um been been talking with.

Alejandro Cremades: So talk to us, I mean, because obviously investors and employees ah that you got their customers to, they’re betting on a vision. um So if you were to go to sleep tonight, Dan, and you wake up in a world where the vision of Nooks is fully realized, what does that world look like?

Daniel Lee: Yeah, that’s a great question. So, I’d like to give the analogy, you know, we’re we’re making sales reps more productive. I’d like to give the analogy of um the the transformation that that farmers have seen over the past, you know, like a couple hundred years, especially with the the industrial revolution. Farmers used to be plowing fields and more like manual labor. And now they have fleets of machines. They have drones, tractors, plows that do a lot of that manual work. ah And they are more like scientists today, where they can measure soil composition and optimize yields. And there are a lot fewer farmers actually, but there’s a lot more food.

Daniel Lee: um And I think something similar is is happening for for sales reps. ah It’s you know kind of an out there analogy, but um especially for sales reps that are focused on on generating opportunities, um ah like sales development and business development reps,

Daniel Lee: You spend the vast majority of your time on things now that AI can do, like writing emails and making calls and doing research online. AI is really good at you know writing an email or browsing the web and and summarizing things. um so As a result, the job is undergoing a very significant transformation.

Daniel Lee: um and In this world, you know one rep will be able to do what used to take 10. And they’ll be able to deliver a lot more value to customers and and to more customers. um so So in this world, you know I wake up one day and um the the vision is realized.

Daniel Lee: um ah value creation will be a lot more efficient, right? Where you can do it with fewer people, reps will be able to focus on the more human parts of the job, and millions of people will will have, you know, much, much better experiences in in their day to day.

Alejandro Cremades: So how does this AI you know wave is saying is, I mean, it’s it’s everyone is talking about it, no? I mean, how how how are you guys unlocking it with Nooks?

Daniel Lee: Yeah, it’s a great question. um I think it’s it’s really interesting how AI is being applied to to different domains. I think ah one thing that ah is is pretty evident in in the market is you know um intelligence is has reached levels, you know AI intelligence has just reached levels that were previously thought it’s going to happen in the next several decades, not you know not years.

Daniel Lee: um And you know with foundation models pushing the boundaries of intelligence with LLMs, I think one you know pretty interesting thing is that the practical the practical applications to solve real business problems remain underdeveloped you know compared compared to this intelligence. um So you know i’m I’m explaining um um explaining this this vision and this challenge with with the 3 million inside sales reps in the US.

Daniel Lee: um Even without improving intelligence much, you can imagine that their jobs will will be significantly transformed. um So I think sales is interesting ah as compared to other domains that people are applying AI. For example, support ah you know customer support or for coding or for like legal or compliance. um Because in a lot of these other domains,

Daniel Lee: the the end user or the consumer of the AI is a customer that’s looking for help, right? Trying to answer our question. Or it’s a lawyer who’s trying to also you know answer a question and and ah comprehend like some some documents. In sales, you know the the consumer is is a buyer that you know wasn’t necessarily thinking of of buying a product. right and you know they have They have other responsibilities. But you know this product can can potentially add a lot of value to them.

Daniel Lee: um In sales in particular, there’s there’s just this this higher bar ah that you have to meet. um you know In a world where everything is AI and like a buyer’s inbox is full of you know AI spam, um then the thing that stands out really is being human.

Daniel Lee: um so i think werere we get to work on some really interesting problems that are not just you know kind of automating completely a job with AI, but actually really interesting and complex like human-AI interactions. What are the parts of the job that AI should do? What are the parts of the job that a human should do? right In sales, humans should focus on building customer relationships ah and in delivering value and empathizing with their problems and developing like creative strategies to solve them.

Daniel Lee: um So um yeah, I think that that’s one interesting area that we get to ah think about in AI.

Alejandro Cremades: So ve we’ve been talking about the future here. i want I want to talk about the past, but doing so with a lens of reflection. now So if I was to put you into a time machine and I bring you back, you know let’s say to 2020, when you were starting to think about a world you know where you were going to do something on your own and become as an entrepreneur, and let’s say you’re able to go back in time and have a chat with that younger Dan, and you’re able to give that younger Dan one piece of a advice for launching a company, what would that be and why, given what you know now?

Daniel Lee: Yeah, that’s a great question. um

Daniel Lee: I think ruthless prioritization. um And this is…

Daniel Lee: um this This is you know becoming more and more common advice, but really have a small number of goals and and stick to them. um And you know this idea that you can do anything, but you can’t do everything. And you need to pick really what you want to focus on and and do. um I think early on, ah we were not as as as ruthless and in terms of prioritizing. ah And over time, we’ve realized, hey, we want to do few things and few things very well. um I think that that advice i’d I’d give to more entrepreneurs.

Alejandro Cremades: I love it. Dan, for the people that are listening, I would love to reach out and say hi. What is the best way for them to do so?

Daniel Lee: Yeah, connect with me on LinkedIn.

Alejandro Cremades: Amazing. Well, easy novel. Dan, it has been an absolute honor to have you with us. Thank you so much for being on The Dealmaker Show.

Daniel Lee: Yep, thank thanks for having me.

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