
How Valve hires, how it fires, and how much it pays  - citricsquid
http://www.gamasutra.com/view/news/187296/How_Valve_hires_how_it_fires_and_how_much_it_pays.php#.USwvx6WSJ8F
======
confluence
FTA's comments:

 _> all is good when the money is flowing._

That really struck me. Everything is all good when the money is flowing. It
doesn't matter whether you work at a bank, a law firm, a defence contractor or
a sales agency - no matter what the structure, or how people are organized,
everything works when the money is flowing.

Now, what I'm really interested in is catastrophic failure.

What goes wrong when the money stops flowing? From what I've seen historically
- the same things go wrong no matter what the place (see GFC effect at various
companies back in '08).

How is Valve going to deal with the "always losing money" proposition?

~~~
jacques_chester
I've said elsewhere, whenever Valve comes up, that we really have no idea how
well it works. It's so fantastically swamped with money that they can pretty
much run it any old how and still be "successful".

There's a mixup in correlation and causation here. Similar mixed up
conclusions are reached by people looking at other fantastically profitable
companies.

Do you like scenario planning? Shell "proves" it works.

Stalinist management? Apple "proves" it works.

Velvet sweatshop? Microsoft "proves" it works.

Data über alles? Google "proves" it works.

Self-directed workplace? Valve "proves" it works.

~~~
wcarss
I agree with your point, and the parent's, that Valve's success is most
directly caused by Steam runoff and their own sales dollars, and not
necessarily their dynamic organization style.

...do many people think or claim that their success is due to their management
style? More importantly, is that why we're talking about it? Certainly that
isn't the focus of this Gamasutra summary of the EconTalk podcast by Valve's
economist.

Valve does talk a lot about their org-style in general, and they do talk a lot
about their success. But I'm pretty sure they have a sound, mundane reason for
those things: talent sourcing.

Standing out in the tech industry as an employer is tough, and the traditional
offerings: "smart people working on interesting problems", "we're growing
fast", "we're the market leader" are, excuse the expression, tantamount to
banal rape. Valve has a further difficulty though, as expressed by Varoufakis:

"In many occasions people simply don't fit in not because they're not
productive or good people, but because they just can't function very well in a
boss-less environment."

They need to find talent like everyone else, but beyond that, they need to
find talent that won't fail without someone taller telling them what to work
on. Valve's sane solution to both problems (lack of talent, lack of talent-
preparedness for their org-style) is to get loud about their org-style.

Valve's org-style is so wild and different that it means we could all talk
about it until the cows return -- and we do. They routinely make (tech
website) headlines just by repeating themselves, which draws crowds. It also
causes candidates to self-select, lessening the fit-problem. Don't think you'd
like to work at a Place Like Valve? You won't apply. Never thought about this
org-style before? You will now.

Why do we love to hear about their org-structure so much? Is it just because
it's different, or perhaps because of apparent claims it's more profitable? I
think it's because it addresses a real problem. It would appear that silly
directives-from-on-high don't exist at Valve, because they internally removed
the notion of "on-high". They also claim to have given each employee the
autonomy to figure out how and where to do their best work, while being paid
enough. It sounds like they struck the creative-work motivators of autonomy,
mastery, and purpose[1] on the noggin. Good marketing at the least.

[1] RSA Animate's adaptation of Dan Pink's talk
<http://www.youtube.com/watch?v=u6XAPnuFjJc>

~~~
michaelochurch
I actually disagree that the Valve-style bossless organization "works" as a
matter of universal assertion. It probably works for some companies and not
others. However, the alternative is ludicrous and only "works" because, with
99% of large corporate organizations taking that form (legacy) there is no
competition.

The more common corporate arrangement is the extortionist command economy in
which one serves one's immediate superior or gets fired from a whole company.
That is ridiculous and pathological. It might have worked in 1870, but it's
starting to fail badly. Billions of dollars of value are being lost due to
this outmoded way of doing things.

Valve is clearly not perfect-- they had a layoff earlier this month-- but it
appears that they're still doing a better job, on a cultural front, than
almost anyone else.

~~~
wcarss
If I've somehow represented that I think their organization would work
universally, I didn't intend to.

I do think it's important that Valve operate as they have (in being loud about
their structure), to point the water out to us fish. It's commonplace to think
that work is just the way work is, with managers and workers and you get a job
then stay in it until you are promoted or fired or quit.

Valve _is_ doing something different -- and of course it won't be perfect. But
it's different, and they're shouting at the top of their corporate lungs about
it. Hopefully it will help lead to the development of a spectrum of
organizational styles. Even if it just brings some common willingness to mess
about with the water and see where we go, that would be great.

------
patja
Linked Gamasutra article just copy/pastes selected content from the Econtalk
podcast, adding no additional content or commentary. Nice reporting Frank
Cifaldi!

Original content:
[http://www.econtalk.org/archives/2013/02/varoufakis_on_v.htm...](http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html)

~~~
jcomis
Thanks, that link is way more interesting.

Yanis Varoufakis is the economist valve hired to study the economy of steam
and valve itself.

------
webwielder
Every time I read about how Valve is composed of only the finest minds in the
industry, I wonder how Steam can be a a) slow, kludgy desktop app with
inconsistent and at times amateurish UI and visual design, and b) a slow,
unreliable, glitchy network service.

~~~
pmh
I've always been amazed at how they managed to cultivate such zealotry in the
gaming community despite being one of the first developers to push (what was
at the time, onerous and nearly unprecedented) DRM on their current user-base.
Not to mention both the Steam client and network were significantly worse than
they are now.

~~~
nlawalker
From what I remember, people originally got on Steam because that's how you
got Half-Life 2, which the world was clamoring for. They put up with the
problems until it got better because Steam was how you played CS and HL.

As for the DRM... has it ever really been onerous? The only case I think of is
if you don't always have access to an internet connection, and they have
workarounds for that, though they admittedly are imperfect.

True, the hypothetical/potential failure modes suck - being locked out of your
account and losing your games; Valve goes out of business and you lose your
games; you're offline and can't switch to offline mode and thus can't play
your games until you find an internet connection. That said, I've always been
of the impression that most people don't mind Steam's DRM that much because
doesn't stop them from doing what they generally expect to be able to do and
want to do with their PC games, which is sit down at any PC where they can log
in on Steam and play them. This is unlike DRMed music and movie files: sure,
DRM prevents you from making unlimited free copies for your friends, which I
think most anyone would agree is reasonable, but it also can prevent you from
doing things like changing formats or resolutions or storing/viewing from
certain devices.

~~~
pmh
I'd say it was onerous at the time. Steam brought an "always-online" component
(offline mode was utterly broken for years) to games you may have bought years
prior, and this was in 2002/2003. In 2013, it's basically the status quo and
other publishers have adopted similar schemes.

I think the interesting part is that in spite of that past behavior and almost
no PR, the gaming community just rallies around Valve and will vilify most
other publishers that attempt to follow Valve's footsteps with Steam.

~~~
jholman
I agree there's a bit of double-standard, but you don't need to be
incredulous. It's simple; the double-standard was earned! Most gamers seem to
have found that every time they trust Valve, they're happy with the result (so
far!), and it's a much iffier gamble with most other publishers.

No one I know found the always-online aspects of Steam particularly onerous.
Especially because when it was introduced, it was mostly used for games that
were only interesting online anyway. HL mods, HL2 and mods. That "no one I
know" is just anecdata, I admit it. And it integrates features that are
actually features. E.g. Steam friends-chat is actually useful, unlike all
other inter-game chat I've seen (on the PC).

And the Steam store is such a boon. It makes me want to give game-devs money.
As my disposable income has grown (massively), Steam was in the right place at
the right time. Brick and mortar game stores don't exactly inspire loyalty.
And I like the fact that digital distribution lowers intermediate costs, and I
like the fact that I get a share of that savings with the crazy-deep-discount
steam store sales.

On the other hand, I can't remember the last time I interacted with DRM from
another publisher without being afraid, and without paying a burden that
actually was onerous. It messes with my router, or it turns out to be an
exploitable rootkit, or it pops up inexplicable warnings, or it eats RAM, or I
have to create an online account for one stupid game that I don't even know if
I'll like yet, or...

I agree with nlawalker.... getting us acclimatized as a precondition of
playing Must Play games (online HL mods after 2003, HL2, Portal) was
brilliant.

Of course, if Valve in their wisdom were to decide my account was violating
TOS, I'd be pretty boned.

~~~
_delirium
A few people I know actually still had dialup when Steam first started
becoming popular (in 2004, U.S. broadband penetration was only around 35-40%),
and they found it pretty onerous to have to dial up every time they wanted to
start a single-player, offline game. Less of an issue nowadays.

------
loeg
So ... are there actual pay numbers? I don't see anything specific in the
article. I also can't find Valve on glassdoor.com, although that might be a
failure on my part. I've heard that the gaming industry underpays compared
with other software industries, but the Valve handbook seems to claim that the
pay is better than Google, Microsoft, etc. Anyone have information either way?

~~~
citricsquid
[http://www.glassdoor.com/Salary/Valve-Corporation-
Salaries-E...](http://www.glassdoor.com/Salary/Valve-Corporation-
Salaries-E24849.htm)

~~~
mbell
'Bi-Lingual Customer Support Rep' makes more than 'Commercial/Industrial
Designer'.

Doubt this link is remotely accurate.

~~~
mcpherrinm
These are unverified self-reported listings.

In general, if there are only 1 or 2 reported salaries on Glassdoor, you want
to take them with a significant pinch of salt.

------
danso
OK, this is slightly off topic, but I'd be really interested in knowing how
employees of totally orthogonal skills coordinate in this kind of hierarchy.
For example, I had wondered if much of the great humor and wit was just a side
projector some supremely talented employee whose main job was to write 3d
renderers.

But they do have chief writers, as I guess should be obvious
[http://www.gamasutra.com/view/feature/132539/valves_writers_...](http://www.gamasutra.com/view/feature/132539/valves_writers_and_the_creative_.php?print=1)

------
softbuilder
Doesn't explain what was up with the random mini-layoff they had recently.
Very curious about that.

~~~
j_s
Did not hear anything about that... can you share more info?

~~~
s_husso
I think they fired the whole 'steam box' team..

~~~
wmf
Didn't Newell explicitly deny that?

~~~
s_husso
It seems the HW-lead was fired according to this:

[http://www.theverge.com/2013/2/13/3983348/valve-fires-
jeri-e...](http://www.theverge.com/2013/2/13/3983348/valve-fires-jeri-
ellsworth-who-was-developing-steam-box-game)

------
paragraft
I'm curious now in light of the article as to how a whole round of lay-offs
occur in an environment like that (particularly across the board, to people of
varying tenure like the recent one). Awkwardly, I assume.

~~~
jpittman
That was one of the things I was hoping was addressed in the podcast. But I
imagine it's something that's not really going to get talked about.

------
kayoone
Gabe Newell pushed the vision of steam onto the gaming market with brute
force. You couldnt play the highly acclaimed HalfLife2 without Steam. Many
people hated it back in the day and were complaining aloud on internet forums.
10 years later it proves to be the right decision and shows that not always is
listening to your customers need the best way to build a successfull business.
The people back then didnt know they want it, just like Dropbox or the iPhone.

~~~
just2n
I think what you're saying is a little misleading. The complaints weren't that
we didn't want something like what Steam is now, it's that we didn't want
something like what Steam was then. It was a small Valve-only HL/mod manager
with a server finder and a friend list. It broke all the time, had major
features that didn't work for years, and required you to be online because
offline mode was one of those features. It was a broken pile of garbage that
needed to be thrown away and completely re-built from the ground up.

The Steam you use today is to that version of Steam as IE10 is to IE3,
approximately. It was lacking major features -- working chat, overlay, store,
non-steam game support, offline mode, authentication that didn't fail 70% of
the time forcing you to restart Steam then try to play your game again, etc.

It's useful and a value add these days, it was just a gigantic nightmare
before.

But I'm still very disappointed that the best (only? I don't count Origin)
tool like Steam is Steam. By that I mean that we're locked into what Valve
wants to do, which is sell us limited licenses that are tied to Valve
maintaining their service, significant amounts of DRM, and other anti-consumer
policies like no refunds. Some of these are deal breakers that leave
significant room for a competitor to eat all of Valve's lunch, so I suspect if
Valve doesn't buck up and play nice with its customers that eventually someone
will.

------
z3phyr
When I went to valve campus, I saw a man with a briefcase, and conservative
black dressing. He looked like a boss to me, someone from the Government I
think!

~~~
nos4A2
Did he suddenly appear in a window? Because I saw him too..

~~~
z3phyr
He freaks me out!!!! And they say they are.. erm Boss free???

------
crazygringo
I've only ever heard how the boss-less, collaborative environment over at
Valve is good.

But I simply can't trust anything until I start hearing about the negative
aspects too, which nobody ever seems to report.

I mean, not everything can be all roses over there. I'm tremendously
interested in the way their workplace actually runs, but you can't really
learn any lessons or apply it anywhere else without having a fuller picture of
what _really_ goes on, warts and all. I mean, _no_ system is perfect, or even
close to it.

------
rdl
I'm curious how they fired the most recent group; was it decided collectively?

~~~
niggler
I assume the same ranking system used for determining compensation
(collective) is used to decide who is fired.

------
mieubrisse
The article didn't actually go into the detail of how much Valve pays.

~~~
nilkn
From the leaked Valve handbook:

"Valve pays people very well compared to industry norms. Our profitability per
employee is higher than that of Google or Amazon or Microsoft, and we believe
strongly that the right thing to do in that case is to put a maximum amount of
money back into each employee’s pocket."

Considering that a ten year veteran at Google can make $200k/year, in salary +
bonus + stocks, I'm curious if Valve compensation can reach the same level.
The Glassdoor page doesn't suggest it can, but people may not be reporting
their bonuses or profit sharing.

~~~
trhtrsh
$200K? a 10-year veteran at google had $80 IPO shares, $200 share grants, $400
share grants, $600 share grants...

~~~
stephencanon
You shouldn't use the appreciated price of stock grants when valuing
compensation; you use the price at the time they are granted. (Still, 200k is
very low; base salary would be in the ballpark of that figure, but stock/cash
bonuses can push well past it).

------
JabavuAdams
Suppose I'm working at Valve, and I decided that I want to work on building a
robot arm for the rest of the week. Can I do that?

What if I keep doing these kinds of projects? Will I eventually lose the
popularity contest and be ousted?

The amount of money to be made in personal robotics or space robotics probably
dwarfs what Valve makes now, but research is risky.

The combination of employee selection and social pressure means that it's
probably not really true that you can work on whatever innovative ideas you
want to.

This is what irritates me about companies co-opting hobby time and free time.
It's not really free time if it's a popularity contest. You don't have to
justify your hobbies to anyone (family, maybe).

I work at a company where I have tremendous freedom to organize my own work,
and to work on research projects, but there are still areas that are clearly
out of scope. I imagine Valve is no different.

~~~
goldmab
Does this bother you? I think they are just trying to eliminate management
overhead by using peer evaluation to set the company's direction by consensus.
This could maybe be chaotic, but I see it as a trade-off. A traditional
structure is chaotic in its own way. Like, who gets promoted to upper
management? The most deserving people, or lucky people?

Arbitrary decisions from an executive may or may not be better than popularity
contests. I guess it depends on the executives and the culture.

~~~
JabavuAdams
No, it doesn't bother me. Well, no more than the fact that I don't yet have FU
money bothers me.

I'm just a bit cynical of all the "you can work on whatever you want (that's
good for the company -- that others around you agree is good for the company
-- that's meant to capture innovation -- but that can't really capture long-
term or unpopular innovation)."

So yeah, the way I work at my current job, and the way that people supposedly
work at Valve seems great. That said, what I really want is to not _have_ to
work, but to work anyway. Woe is me.

------
atrus
Looks like Valve brings in about 1.5 Billion...interesting. (35 min)

------
Rinum
I wonder what the "basic wage" is. Salaries being 5, 6, 10 times the basic
wage means something totally different if the basic wage were $5k vs $50k.

------
jere
>In many occasions people simply don't fit in not because they're not
productive or good people, but because they just can't function very well in a
boss-less environment.

Oh, so you recently realized 25 people didn't function very well in a boss-
less environment?

------
pcote
>In many occasions people simply don't fit in not because they're not
productive or good people, but because they just can't function very well in a
boss-less environment.

In order to function well in a boss-less environment, it helps to have grown
up being educated in one. If your education is authority directed, it's
natural to expect your adult work be authority directed. It seems to me that
Valve's culture is particularly well matched to people who came from
democratic schools. You can probably train yourself to be that kind of self-
motivated person as an adult but it isn't easy.

------
programminggeek
I work for a company that has a pretty great culture, even if it isn't quite
as self-managed as Valve is, and what seems to be the common thing between the
two is that both have a very strong sense of what their company culture is
about, and both attempt to hire not just the best talent, but as much the best
culture fits.

To make something like this work, you can't just hire anybody. It won't work
for many organizations simply because they have the wrong people with the
wrong ideas of how to run a business or organization.

It's also a lot of work to maintain such a system and the wrong hires can ruin
it fast.

------
zobzu
Meanwhile, no half life 3. :P

~~~
Laremere
The employees work on the projects they want to work on. Portal 2 happened
because Portal 1 came out, and a lot of people in Valve wanted to do a Portal
game. I would've be surprised if there is a small number of people working on
the early stages of Half Life 3, or if there is a lot of people working on it
without any announcement. It doesn't seem like Dota 2 would take all of
Valve's development resources. Granted they're doing steam box stuff, but I
imagine that a large portion of the studio is working on something we haven't
heard about yet.

------
JoelMarsh
It is tempting, with articles about company models, to go away with a "this is
how to be successful" mentality, but I think that is wrong.

The design of a company appeals to a certain kind of people, regardless of the
model. Do you put a premium on autonomy? Work at Valve! Like structured
environments? Try Microsoft. Prefer strong leadership? What about Apple?

Or whatever.

Success is not the take-away. Employee-model fit is.

------
delambo
I know this is slightly off-topic, but I've asked this before in comments and
at the following submission, but I never get any replies:

<http://news.ycombinator.com/item?id=5182145>

Is there any other companies like Valve and Github that are bossless?

------
lawnchair_larry
Some Valve wages according to their Q2 2012 H1-B filings. Salary only, no
indication of bonus/stock.

Sr Software Engineer - 97,000 (2 listed at this rate)

Principal Digital Media Engineer - 62,608

Multi-media artist - 77,000

And for fun, some Google employees:

Research Engineer - 206,900

Software Engineer - 105,000

Software Engineer - 214,800

Site Reliability Engineer - 111,600

Site Reliability Engineer - 170,000

Program Manager - 152,000

Information Security Engineer - 150,000

~~~
shawabawa3
Well from the article:

> The payment mechanism is to a very large extent bonus-based ... Bonuses can
> end up being 5, 6, 10 times the level of the basic wage.

------
qxf2
Valve's management is an experiment. May be its just me, but this article and
few others make it seems like a successful experiment. I look at Valve as a
test of certain kind of corporate structure. The test is in progress. The
results are still due.

------
L0j1k
No offense to him (or anyone at Valve), but this sounds like a load of
bullshit. There is circular logic and self-contradictory information even
within the span of a few sentences. To me, this article is the equivalent of
asking a general in the United States Army whether or not a job in the United
States Army is great.

