Rutul Davé is the CTO and co-founder of Maxwell, the mortgage technology provider. Like most innovators in the fintech space, he launched his startup after growing frustrated with the current state of affairs. In particular, the Maxwell CTO was fed up with the sluggish paper-based admin people applying for a mortgage are forced to go through.

The company is set up to make it easier for lenders to deliver “a state-of-the-art experience to their borrowers,” as Davé says in this interview. Essentially, it supposedly automates the process.

The Maxwell CTO and his CEO John Paasonen launched the startup in 2016. Since then it has raised $79.5m in total, according to Crunchbase. The company most recently raised a $16.3m Series B funding round in March 2021.

In this latest Q&A in our CTO Talk series, the Maxwell co-founder reveals why he believes the US mortgage industry is in dire need of a revolution.

Eric Johansson: Tell us a bit about yourself – how did you end up in your current role?

Rutul Davé: Ever since I graduated from University of Southern California with a MS in computer science, I have always found myself working at the intersection of technology, startups and finance. I like to joke that I nerd out on finance – not complex financial engineering, but the psychology of finance.

At Maxwell, as [CTO], I get to play a role in finding solutions and opportunities to help lenders serving America’s communities stay ahead by consistently delivering a state-of-the-art experience for their borrowers, while improving their workflow and margins.

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Before Maxwell, I founded Bright Funds in 2012 with a mission to design experiences that unlock passion and capital from a new generation of donors focused on impact. Previous to Bright Funds, I worked in marketing, product design, and software engineering at various successful Bay-area startups and venture-backed private companies.

Where did the idea for the company come from?

The desire to work on something in the mortgage industry came from personal experiences that my co-founders and I had as homebuyers and borrowers. As we reflected on our experiences with home loans and refinances, all we could remember was anxiety, confusion and overall dissatisfaction. The mortgage industry transacts over $1tn per year, yet lacks the innovation and modern web technology to create a positive experience for people embarking on one of the biggest financial decisions of their lives.

From there, we spent several months interviewing hundreds of real estate professionals, lenders and homebuyers, and realised there were obvious opportunities to use technology to significantly improve the borrower experience while providing efficiencies and cost savings to the lenders originating the loans. So, in essence, not unlike many entrepreneurs, this desire to “scratch our own itch” was the genesis for Maxwell.

What’s wrong with the US mortgage industry?

The US mortgage industry today is held back by paper-heavy processes, lengthy timelines, and cumbersome borrower requirements. Ask most of the American public how they feel about taking out a home loan and they’ll likely report frustration, unease and confusion. On the other side of the transaction, many lending professionals mirror that dissatisfaction, with much of their time derailed by inefficient processes.

But automating everything doesn’t solve the issue. Most homebuyers don’t want a robotic, impersonal mortgage process. Instead, they want digital convenience paired with personalised support. That’s why mortgage technology should first and foremost empower lending professionals to offer better borrower service.

By reducing inefficiency and adding humanity back into the process, technology has the opportunity to open access to more homeownership and associate home buying with excitement and joy rather than confusion and stress.

Why has it been sluggish to innovate?

The mortgage industry is a huge one, it’s one of the last industries in finance that the technology revolution, especially the Web 2.0, reached in terms of influence. With a lot of cumbersome processes, like we’ve seen for credit cards or trading accounts, it’s harder to build a shiny new fintech stack on top of it.

A mortgage is one of the largest financial transactions of most people’s lives. That makes mortgage lending an industry where trust and security play a huge role in every stage of the process.

Since regulation and compliance are critical considerations for operators in this industry, the popular adage of “move fast and break things” is not a sensible approach to innovation and disruption.

How do you separate hype from genuine innovation?

When working on genuine innovation, you have to do the hard things, solve the complex problems on the back end so that you can provide the simple, sleek solution to the user on the front end. Simple is not easy. There is no “get rich quick” for genuine innovation.

Having spent over 22 years in technology and product development, I am grateful that I learned early on that it’s impossible to build anything meaningful if you chase the latest shiny object, whether that’s new technology or a new web framework.

A piece of advice I got, and I still follow is “choose the boring technology.”

What one piece of advice would you offer to other CTOs?

“If you want to walk fast, walk alone. If you want to walk far, walk together.”

Not sure who said that first, but in the context of technology and product development, it underlines the importance of the team and the people you work with. If you want to create innovative and valuable solutions for the long term, you will first want to build a great team that enjoys working together.

My advice to other CTOs is to over invest in your culture and team. People are your first product.

People. Process. Product. People first. Then process. Good products will follow.

What’s the most surprising thing about your job?

When you have a hammer, everything looks like a nail. As technologists, it’s often tempting to try and solve everything by using more technology and building more software. However, sometimes the most elegant and effective solutions are quite simple.

It’s surprising that no matter which industry or technology domain you work in, it doesn’t matter which new and innovative technology you’re using, how fast and efficient the code is, or how beautiful and user-friendly the user experience is. The only thing that matters is: Are you solving the most important problems for our customers?

What’s the biggest technological challenge facing humanity?

Technology is the conduit through which we experience the majority of our life, including, but not limited to, social connections and how we consume information.

Our biggest challenge is ensuring that rather than creating inequality and division, technology, as it permeates in every aspect of human life, brings us together as equals.

What’s the strangest thing you’ve ever done for fun?

My idea of fun is when I can balance feeling relaxed with feeling creative and productive. I lived on a houseboat on a lake in Seattle for a few months back when Maxwell was just getting started.

It was early days and I was looking for an environment where I could feel like I was on vacation every day, while also being productive and creative. A houseboat was a strange choice, but ended up being perfect.

What’s the most important thing happening in your field at the moment?

The most popular mortgage product, the 30-year mortgage, is over 50 years old, and was designed for a very different generation of homebuyers than we have today. To support innovation in mortgage products and provide opportunities for home financing to this new generation of homebuyers, lenders and the entire mortgage industry have a pressing need to evolve.

With rising interest rates and historically low inventory, the housing market poses no shortage of challenges today. That being said, the industry is evolving like never before. Technology is working to reduce the cost of home loans, and data is helping us understand the barriers to entry that keep underserved borrowers sidelined.

As millennials continue to flood the market – and Gen Zs gain interest in homebuying – there will be huge opportunities in paving a path to homeownership for these demographics despite challenges.

In another life you’d be?

Without a doubt, I’d be coaching a professional soccer team, specifically Manchester United. Growing up, I played soccer and have been a fan of Manchester United for as long as I can remember.

Actually, product development teams are similar to professional sports teams, and I find a lot of parallels between what it takes to be successful as a sports team and what it takes to be a high-performing product development team.

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