Speaker 1Hey, everybody. It's Sam Jacobs. Welcome to Topline Spotlight. Topline Spotlight is that short segment where we go deep with an operator, an investor, a CEO, people that are in the field building, and we ask them about a challenge that they faced over the last 12 to 24 months. We're trying to get tactical, and we're trying to learn about the challenges that operators face in real time, particularly in the age of AI. And today, we are excited because we've got on the show Dan Lee. Dan is the co-founder and CEO of Nooks. Nooks is an incredible company. We're big fans of them here at Pavilion. And Nooks is the revenue agent platform powering many of the fastest-growing and most advanced companies today, like Cursor, Replit, and Deal. Nooks provides agents and execution infrastructure to drive outcomes across the revenue lifecycle from accelerating outbound pipeline, automating inbound leads, accelerating deals, and coaching reps. Dan, welcome to Topline Spotlight. Thanks for having me. We're excited to have you. So I gave the overview of Nooks, and for those that are listening, Dan just wrote that overview. So that is an accurate description. But Dan, in your words, if you wanted to tell us a little bit more about the company, where you are in your growth journey, how old the company is, and why you're so excited about building it, just give us a little bit more information and detail on what you're doing with Nooks.
Speaker 2Yeah, at the very highest level, the opportunity that we're going after, every knowledge job is transforming right now. And they're all following a similar curve, right? The job of a software engineer is completely different than it was two years ago. Similar is happening for, you know, for legal, for support. The job of a salesperson has changed, but not that much over the past couple years. And the outcomes in sales, have not nearly followed the progress of model capabilities, as they have in, you know, these other domains. We believe that sales is the next job to inflect. And the future will be entire go-to-market teams, collaborating with agents to deliver orders of magnitude better outcomes. And we're building the agents and revenue infrastructure that power that future. So on the evolution of Nooks, you know, today, Nooks, we just crossed 300 people. Just in terms of like revenue, you know, three X year over year. And started hacking on like the early, early versions of Nooks in 2020. But it really started looking more like it, you know, does today, you know, closer to 2022. So that's like the very, you know, kind of high level background on Nooks.
Speaker 1What were the, so, you know, one of the things that we want to hear from operators on Top Light Spotlight is just about challenges. And I know one of the challenges, you're facing a couple different challenges. One of the challenges is that you're facing a lot of challenges. One of them is related to just growth and urgency. Talk about the evolution of the product from when you started in 2020 through what it is today. Because it started as one thing, and now it's very different. And talk to us about how you're prosecuting that opportunity in the age of AI.
Speaker 2Yeah. So when we started, for context, my background is in AI, machine learning research. And I first was not building a sales product that I'll save, you know, or the quick TLDR on that story is in 2020, was interested in human AI problems, and saw that there's this interesting human problem first in remote collaboration, because it's 2020 in the pandemic. And I was interested in building, you know, if you get this remote collaboration problem, like, you know, building kind of in the Zoom space, if you get that working, you have a lot of data on how people work. And can you start making it smart? So can you build like a virtual office and then make it a smart virtual office? That was like the high level idea, and found that salespeople were actually the biggest users of that collaboration product. In terms of the evolution, we started by building so once we started focusing on sales, we started by building tools for sales reps. It was, you know, the first tool of which was calling, because there were a lot of people making calls together in Nooks in the collaboration platform. And we expanded then to own all the tools for a rep, especially for, you know, generating pipelines. So think like not just calls, but emails, research, finding prospects, making account plans, you know, logging things to the CRM, enriching data, all the all the things around the generating pipeline. So, you know, expand it from one tool to now the whole toolkit for a top of funnel, and then expanded that to be not just the tools for sales reps, but also the tools for agents, because in order for agents to do work like a rep, they need access to the same tools. And from there, I've expanded to own not only the, you know, the tools and agents for the very top of funnel, you know, I give this chess analogy, when you're when you're selling to an account, it's like, you know, kind of like this chess game where you first need to understand the board and come up with a strategy, make the moves, we started with the openers, which is like, you know, creating opportunities and generating pipeline. And in building the best solution for that, have earned the right to own the endgame. And to, you know, help with deal management, renewals and expansion, even afterwards, help basically working across the entire revenue lifecycle. And a lot of the same things that we built, in terms of like, the execution infrastructure, you know, the context layer, like this way to learn company sales processes, you know, that has translated across the whole revenue lifecycle. Wow, how did you
Speaker 1talk about how AI has changed, you know, software development and look specifically, because you've, you sort of referenced the Mike Vernal, you know, barbell idea, tell us about that idea. Tell us about that mental model and how it impacts this, the rate and the pace of feature development and kind of, you know, surface area coverage, to the point of what you just said.
Speaker 2Yeah, it's a lot easier to build software today. I'm sure everyone has seen that. And that means, you know, there's been historically this natural distribution of software tools, you know, this distribution, say that this x axis is the breadth of the platform, right, ranging from, from point solutions to things that do, you know, like, you know, in the middle to things on the on the end, that's like huge, you know, behemoth platforms. And because it's a lot easier to build products, the middle is kind of dying out, right? Because on one end, you have companies building in house, right, building their own internal tools that are pretty niche. And again, easier to build now. And then on the other hand, you have companies that are able to build and ship a lot faster. That's, you know, compound into these huge platforms, and are able to add more value, you know, because you have, you know, lower customer acquisition cost, synergy across the products. And because this middle is getting squeezed, one, I think this presents a problem for, you know, people in the middle. But you know, I view most of these, you know, problems also as opportunities, there's this opportunity to go way faster and be way more aggressive than ever possible before, because you can ship software at like the, you know, much faster rate.
Speaker 1The, the challenge with, there's a disconnect between the speed at which people can build software and the speed at which your buyers can understand and interpret this, the problems that you're solving. How have you, meaning, you know, you can build 50 different features, but if they think about Nooks as a power dialer, and now you're trying to do many more things, there's an element of marketing reeducation that you need to do with your customers, they understand how to think about the problems that you're solving. And that is compounded by the fact that your ability to solve problems is probably increasing quick more quickly than their, their ability to process how to fit you into their mental model. How do you think about that? It's a hard problem.
Speaker 2It's not just that there's, you know, there's the evolving, quickly evolving products. There's the noisy space, right? There's like a million sales tools that are saying, you know, we deliver X outcome or Y outcome, that's, you know, very hard to distinguish between. So a couple of things that I'm going to talk a little bit more about are, you know, there are a couple principles that, yeah, there are a couple of principles that we focus on here. One is actually showing outcomes. We run, you know, often run POCs, you know, even when it's not POCs, like we are very focused, every product team, engineering team, you know, go-to-market team is focused on what outcome are we delivering for the customer? And it's hard to knock that, right? It's a slide, you know, we have a 70% conversion rate from like trials, across all our products to, you know, to pay customers. So yeah, one is like actually this focus on delivering outcomes. Related to that is we have a much broader product than we did originally, right? In building like a single tool for calling, it's now a lot broader, but we never take the strategy of, hey, it's just the consolidation play. You know, we'll have, we never say, oh, we're okay having like a mediocre product in that area and a lower product in this area and just rely on like the strength of this product. And you know, hey, you just use these others to consolidate. Whereas, you know, a lot of other companies take this approach. Because you can build software a lot more quickly today, we need to hold ourselves to this very high bar, right? Where it's like, we're not actually sacrificing quality. You can actually on this like curve of like quality and speed, the curve is pushed out and we can, and we can actually just do both. And part of that is like in we've, you know, you think people call it like the Can you build the engine that actually lets you iterate and come back? and way faster than any other company by having like the best engineering talent, by having like the best kind of just engineering practices. So we've invested a lot in that.
Speaker 1What are some of the best practices for engineering? Because again, that's where my next question was, how do you maintain quality when you're developing features at such an accelerated rate?
Speaker 2Yeah. So we were saying that the job of the software engineer has changed. Engineering has shifted from engineers spending time writing code to defining the objectives and the success metrics and creating tests and even teaching agents how to create tests to make sure that what they're building is directionally correct. So if you end up, if we have a ton of products and we're getting 100 tickets a day, instead of engineers thinking about them, instead of engineers going and solving those tickets and building the features or squashing the bugs, they're actually instead. building the agents that can go do that themselves, right? They're figuring out, hey, how do I build the system so that agents can automatically go take, one, not rely on customer bug reports, but instead build really good observability. Or even when a customer bug report does come in, it just goes and fixes it automatically, puts up the PR and says, hey, it's done. You can, you know, give it a check if you want. So moving a lot more from like engineers like doing the work to more orchestrating the work.
Speaker 1How did you think about retraining your go-to-work? market team give again you know they were they were trained on selling a dialer to sdr leaders a few years ago now they are selling more things and it might also be a different profile of person that can handle a multi-product sale where you're probably you can tell me if you're wrong but if if you're pursuing any kind of mid-market or enterprise strategy there's a lot of incumbents that you need to replace you know you can do so many different things you have to figure out well where do we start what's the you know thin edge of the wedge and then how do we replace those incumbents how do we have that conversation at a high enough level so that we can we can take full advantage of the
Speaker 2opportunity yep so i'm starting to think about our sales reps and aes not as you know sales reps but as revenue ai consultants and that means really deeply understanding like a company's problems uh and opportunities right maybe it's even problems that they're not thinking about i view problems and opportunities as a problem and i think that's a really good way to think about our sales reps and opportunities pretty interchangeably uh but understanding like yeah how does their revenue org work what is their sales motion uh how do they generate pipeline how do they push deals forward uh what are the things that like they're thinking about and prioritizing the numbers that they are trying to move and like the lowest hanging fruit what are they building internally and uh what are the things they're not thinking about and help explain like how because nooks will solve some of these problems like you know we have uh agents that can help generate pipeline that can help automate inbound that can help accelerate deals coach reps and everyone is focused on like one of these problems and the question is like okay what part of nooks like how you know what do we need to build for them how do we partner with them and it's a lot more consultative than it was before another like framework that i have is in uh you know moving from selling like a pretty straightforward tool uh to now kind of this like revenue agent platform is the difference between serving demand and generating demand and what's the difference between serving demand and generating demand when people you know a lot of people think about demand gen is like a marketing thing it's not just a marketing thing it's a sales thing uh sales reps can spend all their time you know uh uh i have a ton of hand raisers saying you know our customers saying oh i hate outreach or sales loft and i want to switch and like that's easy to service that demand uh it's a lot harder to generate demand right when they're like yeah it's like fine i'm not like really trying to switch right now but like you know these are the problems that i'm actually that i actually have right and how do you actually take those problems uh and say like help them understand why nukes is like the the solution for that so it's important that our sales team is moving in that direction but i think all sales teams are moving in that direction because uh as agents free up rep time uh then the rep in order to compete actually has to be a lot more consultative in understanding the customer problem and can deliver more value in the in the sales
Speaker 1process what do you what's your prediction on the future of sales you know there's uh i'm friends with amanda kayla who's the ceo one mind and she's the one that's been working with us for a long time and she's been working with us for a long time and she has a point of view that you know many smb deals that the bar for human involvement interaction will continue to go up in many many deals more things will look like plg because they'll be agent or ai assisted how will the sales organization change over the next couple of years and what role
Speaker 2yeah i completely agree with that uh there's a spectrum of uh difficulty uh you know similar to how an agent working on a basic arithmetic problem looks very different from the agent that's going and solving the millennium prize problem right because you know your chat to bt can go you know do basic math uh but the you know millennium prize problem took like 10 000 agents working over 90 hours uh and i think there was some like you know some human involvement in sales like that range of difficulty an easy problem an easy sales problem is someone's on their website and they mostly want to buy your product but they just need a couple questions to get them over the line uh you know it's pretty easy a hard sales problem is you know you're cold calling a vp who's never heard of you uh who you know is not prioritizing the problems you solve uh and it has a budget freeze right now it's like it's pretty hard sales problem right it's like a lot of persuasion that needs to happen and i think the easy problems you know like in uh coding for example the easy problems are automated right where you don't need people to handle those easy problems uh agents are great at talking now they can demo the products we actually have a product for this um uh but on the other end it's pretty hard like asians are not naturally good at these like really hard persuasion problems where you need to uh build trust you need to understand like real human problems you need to be creative so uh i think on one end you have like fuller automation on the other end you have like these 10x reps that are able to get a lot of leverage through agents to doing you know the more admin busy work and they can focus on actually being consultative in solving these hard problems
Speaker 1you what uh last question we're almost at the end of our time together it's always great to have you on the show uh my question is for you as a ceo you know nooks is growing so rapidly to your point right your backgrounds and machine learning and ai but even when even though you are uh relatively early in your career uh when you were in school and when you were building the first version of nooks the world of software development looks so different than it does today and even the pace of change is so different than it does today is uh can be overwhelming well it could be overwhelming or it could be exciting or it's both depends on the day depends on the minute how do you make sure that you're the right ceo for the moment given that nooks you know a couple years ago was a glimmer a twinkle in your eye you're approaching 100 million in arr now next year two years you'll be three four five hundred million how do you make sure that and and and you know how do you make sure you're the right person for the job at every moment
Speaker 2yeah one of the first reason why i started just hacking on nooks my goal was to learn i had done a lot of machine learning research and uh wanted to learn what building a product was like i wanted like these faster feedback loops where you know research takes weeks and months to run experiments and quarters to you know make them useful and shipping product would be a lot faster and i didn't know that it was gonna be this fast uh but i think a big part is making sure that i'm i know that i'm doing the right thing where i should be learning like so i think the self-awareness of like okay these are the things that are most important uh here's what i'm good at here's the gap uh so i need to learn and then like how do i learn all right there's uh uh trial and error uh there's uh advisors there's uh you know there's like a bunch of like there's reading books and there's a bunch of like different learning mechanisms but i think the first is like understanding what is the objective like where do we need to go uh you know what is my skill set today understanding that gap and then like figuring out what are these different ways that i can learn it i think the other is just like the the mindset of like the the fast feedback loops like we need to move really fast uh because you go make a annual roadmap and you're gonna get screwed because you know the uh uh i don't know like what wasn't it like meta was working on instinct for like a while and keeping it behind closed doors because like you know they were worried about some security problems and changing passwords and stuff uh then instinct comes out and they're like oh fuck we gotta move really fast so yeah and like mark just made the call right to to go uh launch it so like um uh you know in our case like uh we see this like i think proactive agents are really powerful and uh we uh we launch node our like personal like proactive agent the first personal proactive agent for sales uh where you know it's helping uh manage follow-ups and schedule and uh you know prepare collateral and you know kind of all these use cases that a sales rep needs in their day-to-day so they can focus on you know the uh the meeting and uh you know the customer value so i think it's like the speed of iteration like the awareness of like where we need to learn and then also just having the access to like you know good ways to learn these things where i have you know some great advisors
Speaker 1dan uh thanks so much for being our guest we're so excited to watch next nooks grow if folks want to reach out if they want to become customers should they go to the website should they email you directly how do you want people that are interested to learn more so uh if you want to
Speaker 2use the products uh would recommend go to the website uh you know know, our sales team is great, they'll help you out. Also, feel free to reach out to me, of course. And we're also hiring across the board. We have 100 open roles this quarter. So literally across the board. And if you're interested, yeah, definitely definitely reach out because you know, hiring is always my top priority.
Speaker 1Awesome. Dan, thanks so much for being our guests. And thanks for supporting pavilion and top line. Yep, thank you.
Speaker 3Okay, and against all odds, you're still here. Look, if you want more top line, check out the top line newsletter at topline.bhive.com. Beehive is spelled weird. It is b e h i i v.com topline.bhive.com. Or if you're a video person, because videos great. Check us out on YouTube. Top line dash media is what you want. Have a delightful day, everybody. Thanks for watching. And I'll see you next time. Bye. Bye. Bye.
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