Compass Chief Operating Officer Maëlle Gavet has had a dramatic summer so far.
In June, the venture-funded real estate brokerage valued at over $4 billion announced a major leadership reorganization that included the departure of two top executives formerly on Gavet’s team: Eytan Seidman and Khurrum Malik.
The departure came only a few months after Compass CEO Robert Reffkin sent out an internal email in January 2019 to employees specifically citing the importance of Gavet, Seidman, Malik to the company’s tech development, and calling out a “three-month” timeframe for developing an industry-leading tech platform.
“This year, our strategic focus will be on fulfilling the last outstanding Compass promise: technology,” Reffkin wrote in the email. “Building on everything we’ve learned and everything we’ve already launched under [Gavet] and [Seidman’s] leadership, and now with the additional expertise of Chief Technology Officer Joseph Sirosh, we are going to deliver the first end-to-end agent platform in the industry. As a reflection of how seriously we’re taking this strategy, [Gavet] and [Malik] have decided to dedicate themselves entirely to this technology push for the next three months.”
However, as part of Compass’ major reorganization, Reffkin is now taking charge of the brokerage’s tech development. Meanwhile, Gavet has shifted to oversee its “new ventures” division, which a Compass spokesperson described as mostly focused on “ancillary services” such as mortgage, title, escrow, etc. Reffkin has previously stated Compass’ intention is to provide all of these services, along with real estate transactions themselves, in a “one-stop shopping” experience for Compass clients online.
Multiple sources with knowledge of the situation at Compass have mentioned to Inman that conflict and tension has emerged between Gavet and Reffkin, both of whom are under pressure to deliver results after taking hundreds of millions in backing from SoftBank, the company’s single-biggest investor through the multibillion-dollar Vision Fund.
In a statement to Inman, Reffkin, tamped down suggestions of a rift between himself and his number two: “I’m feeling good about our results, with our May revenue up 4 times since last year, and it’s driven by the great partnership I have with Maelle and the entire leadership team where debate and collaboration helps us get to the right decisions for our agents and their clients. I am so grateful to work alongside them and couldn’t be more excited about building the future of Compass together.”
Gavet spoke at length with Inman about the results of Compass’ technology push, her working relationship with Reffkin, the departure of multiple executives and what exactly Compass has accomplished. Her remarks have been edited for clarity.
Inman: There have been some reports of a working rift between you and Robert. There was the report in The Real Deal and some of the people I have spoken with, close to the company, have said the same. Are the two of you on the same page?
Maëlle Gavet: The short answer is yes. Look, Robert and I have now been partners for two-and-a-half years, I joined in January 2017, our partnership is very strong and very collaborative. To be perfectly honest with you we both very much believe in the fact that a partnership requires some type of debate, this is very important. Robert and I are different people by background, by gender, by approach. We both spent a lot of time building this partnership.
Robert and I sit in the same office, we sit across from each other every day, we actually live a block from each other totally by chance. We spend a lot of time. This morning we had a two-hour breakfast where we talked about a lot of things and how to push the company further.
We very much see each other as complementary. This idea of dividing and conquering and working together.
I would say, apart from this partnership, at a company of this size, it’s not just us. We have an entire leadership team and we’re talking to them constantly. We all have different opinions some times. We do believe this culture of open debate is very important.
Robert and I do have a very strong partnership and we spend a lot of time making sure it’s stronger and stronger over time.
Is it frustrating for you to be moved off the tech side of things? Your background is in tech and Reffkin’s’s background in tech development isn’t as deep.
Frustrating, no, for different reasons. The first reason is, this was a three-month sprint solely focused on tech that we extended it to six months. There were a lot of things that were working well or in the pipeline that we wanted to push, so we went from three months to six months. That was supposed to be a time where we had a sole focus.
Number two, I’m probably the only person in the company that doesn’t have a job description. What that means is my job is constantly evolving. This is probably the fourth or fifth time I’ve changed jobs in the company. I have been in every department except one at Compass.
I don’t know how familiar you are with what I was doing before, but I did the same thing at the Priceline Group. And the same thing, I changed jobs several times, the title stayed the same, but my responsibilities don’t.
Robert has been very involved in technology from the beginning. In the last six-month sprint, he’s spent a lot of time with the product engineering team talking about where we want to take the company further. We decided that it was a good thing for him to get more focused tech and for me to focus on a few other things that are very important to the company.
Compass COO Maëlle Gavet, executive chairman Ori Allon, and CEO Robert Reffkin | Photo credit: Compass/Facebook
In the internal letter [Reffkin] sent out in January that announced this three-month push, he had said you’re ‘bottom line, responsible for the entire initiative,’ and [Malik] will take the point on product marketing. He also said [Seidman] and [Sirosh] will have delivered everything agents need to bring the core of their business onto the Compass platform. At the end of this push, two of those people are gone and you’ve had your duties shifted. Is it fair to say the push underdelivered in [Reffkin’s] eyes? Is that an uncharitable reading?
I understand where you’re coming from, but that’s not exactly what happened. Let me start by talking about the results. I think the results have been good. We have hired close to 200 people in product and engineering since the beginning of the year, which is a big number. We acquired Contactually based out of Washington D.C., which was an important acquisition for us. We started displaying the listing agent on every listing whether or not its a Compass agent. We launched a new geo-agnostic search experience. We revamped entirely our iOS and Android app. We’ve done a lot of things.
It’s actually more because Robert felt that the product and engineering team was on a good track and delivering that he decided he wanted to be more involved in the product.
How are we supposed to read into the fact that two of the four people behind the 2019 tech push are no longer with the company?
[Seidman] left to take another great offer and we miss him and wish him the best. He made huge strides in the role in the time he was here. [Seidman] and [Malik’s] departures were totally unrelated, and even with my new responsibilities we just decided it was easier as a company to make all the moves at once rather than string this out over time. We’ve found this is the best way to move fast and focus on the hard work ahead of building a great company.
Was [Malik’s] role eliminated because of the results of that push?
Completely unrelated.
Is it fair to say then that you hit the goals? Everything that agents need for the core of their business is now being done on the platform?
The vision for the company has always been to build an end-to-end platform that would power the entire transaction or the entire client lifecycle that an agent is handling. We’re still going in that direction. The vision for the technology hasn’t changed. The push that I was talking about for the first three months – that was extended to six months – the idea was that there was more work to be done afterward.
We’ve covered Compass closely and a few of Robert’s big promises that he’s made publicly haven’t come to fruition. The Compass credit card comes to mind and international expansion that was announced with the company’s last big funding round. Is there an update on those? Are those projects that have been abandoned?
The company is an ever-evolving company. Because we’re going so fast, there are constant reorganizations and constant changes due to growth. So for example, international expansion is a perfect example of that. Compass has continued to have in our strategy the goal of expanding internationally. Right now, in 2019, we felt our customers, the agents, needed something different. We focused on making sure we serviced our agents better, including through technology that we just talked about.
This is the reason why we have been focusing our resources on what we think is working, including, Concierge. On Concierge, we’re close to 2,000 projects to date. So that’s a very successful project and that was completely new this year.
Compass is always learning from reality – which is talking to our agents and making tradeoffs. We constantly reevaluate what we think is going to have the best impact for our customers, the agents.
Do [Reffkin’s] big promises ever put the behind-the-scenes executives and employees in a tough position?
It’s not just Robert and I that make the decisions. When Robert talks about something, it has been pretty heavily debated with the leadership team. We are also all on board with sometimes the fact that some of the things that have been announced have to be changed because the reality has changed.
One of the things that stood out to me from the Jan. 14 letter was that one of the company’s yearly goals was to get “80 percent of buyers to start their home search on Compass.” In a market that has so many big competitors in the home search space, how is that a reasonably achievable goal and how can you achieve it?
I think you know the 20/20/20 goal, 20 percent of market share in the top 20 markets by 2020? So that is within the timeline. Compass is a company that likes to have ambitious goals because we believe that is what pushes us. One of our key principals is, “dream big.” The second thing is, the goal that Robert stated wasn’t for 2019, it was a longterm goal, so we continue to aspire to this goal, absolutely.
Is Compass considering launching an iBuyer program?
We constantly look at what is happening in the market because our agents and customers keep talking about it, we hear a lot from them. When we started looking at the iBuyer thing, we also at the same time started thinking about the Concierge program. Our Concierge is a way to actually improve the value of homes, the same way an iBuyer does, but give the benefit of the upside to the homeowners not just to the company. We believe it’s good for the homeowner, the agent and ultimately will be good for Compass.
Homeowners don’t always have the cash to invest. The iBuyer program can be attractive to them because they can’t do what is required. The Concierge program allows them to sell faster, for more and pocket the increased value.
[Editor’s Note: Compass declined to comment on if the next steps were to raise more venture capital money or go public in the near future].
What is the biggest single tech differentiator that Compass has available to agents now?
I would say a few things. The first big differentiator is that we have close to 13,000 customers in-house, in our agents, and they are really invested in making sure our technology works. We have an ongoing feedback forum and this is really what we’re using to develop our technology roadmap. I come from [a tech background] and gathering feedback from customers is always challenging, but at Compass it’s not. Our agents or customers constantly give us feedback.
The second one is our marketing center. It’s a tool we launched in 2018 so it’s fairly recent. And today we have close to 600,000 downloads on the tool, which is based on the close to 13,000 agents that I was talking about. This is a tool that is very successful, with a really high adoption rate.
The last thing I would say is that we continue to build this end-to-end agent platform strategically around the fact that the technology we offer agents is extremely effective. One of the issues they have is, to do their job, they have to combine 16 different types of software. What we’re trying to do, and what we’re delivering on step-by-step, is this integrated platform. That, I think, is very unique to Compass.
I know you had the failed ‘Powered by Compass’ experiment. Is there any more consideration about offering it to others beside just Compass agents?
Nothing is ever forever at Compass. As I mentioned before, we keep thinking and keep innovating and keep trying. Powered by Compass was one of the things that we tried and we’re very open about the fact that not everything that we’re going to try actually works.
Right now, again we’re seeing, based on the feedback of our customers, our agents, that there’s a very strong demand for the marketing center, so we’re investing more. There’s a very strong demand for concierge so we are focusing a lot on that. There’s a very strong demand for the vendor service marketplace so that’s something we’re investing a lot in.
So will we never do something again like Powered by Compass? Again, I would say, never say never. We do just have a lot of things planned that are important, like the vendor services market place, marketing center, etc.
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