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How Valve hires, how it fires, and how much it pays (gamasutra.com)
278 points by citricsquid 1609 days ago | hide | past | web | 157 comments | favorite

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?

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.

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

A lot of people don't like their boss, don't like hierarchies, and secretly suspect that they're made to do stuff as some kind of display of power.

And in some places? Yeah. Probably legit.

But I the thing is that it's impossible to know if the Valve model is worth studying for clues on how to better manage non-lottery-fountain companies, because the confounding factor of riding a money mississippi is basically totally impossible to factor out.

In conclusion, I'm jealous that I'll never have to face this problem up close.

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.

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.

Startup that lets you work 4 days a week? 37sigals.

Terrible UI? Craigslist.

We tend to look at outliers and make them the canonical example. 37signals has been particularly bad with dispensing startup advice being completely not typical.

You make a good point, but how confident are you that the products that have lead to them being fantastically swamped with money didn't arise at least to some extent because of their culture?

Quite confident.

Multi-billion dollar game franchises have been created in other ways before and since the initial Cabal article was published.

The existence of other roads to billion dollarism do not preclude the causality between Valve-style management and more billion dollarism.

This is exactly what I am trying to express.

I think a good way to measure the success of the management methodologies you mentioned is by looking at how happy the employees are. Four of the five companies in your list are full of horror stories describing terrible corporate bureaucracies or abusive/ignorant/incompetent managers. In contrast, everything I've heard coming out of Valve has been overwhelmingly positive.

Google has a company-wide index of satisfaction which they try to maximise.

Microsoft is the only company I've heard of that has (or had) "Morale Budgets", completely within the control of the programmers. In the 90s, according to McConnell, Microsoft would go to any lengths to protect and improve morale.

I can't speak for Shell or Apple.

The point is that people are mixing correlation and causation. There's no reason to think that Valve's self-directed model is the cause of their success, just as there's no reason to think Google are successful because of how they manage their people. In all these cases the massive profitability is pretty much exogenous.

I agree about mixing correlation and causation. I don't think Valve's model should just be blindly applied to everyone. But it does offer some hope as a kind of alternative style of corporate governance.

I also stand by what I said about Google and Microsoft. I know people give Michael Church a hard time here, but from my own friends I've heard anecdotes that confirm his sentiments regarding the amount of bullshit that goes down there. Sure, it's a good company and people are happy - as long as they play the politics game. I'm sure a company-wide "index of satisfaction" looks good on the HR handbook, but when your manager blacklists you without your knowledge and prevents your transfer or promotion, that's kind of shitty.

Same thing with Microsoft, which is known for its legendary corporate bureaucracy and political in-fighting. And Apple, which is by all accounts a very high-stress environment to work in.

If you think ostensibly "flat" social structures can't be gamed in stunningly unpleasant ways, then I have a bridge to every 1970s anarcho-syndicalist commune in Brooklyn for sale.

The difference here is that there is a high barrier of entry. The people accepted to work at Valve are allegedly elite and compatible with this flat structure.

I don't think communes are as rigorous about admission.

>The difference here is that there is a high barrier of entry.

An even bigger difference might be that the financial goals Valve has as a community are more clear than the goal of "build a good anarcho-syndicalist commune". In my experience communities that have a goal to pursue that's external to the existence of the community are the ones that last while those that don't tend to descend into high school-like popularity contests and fail because of that.

BTW, is there anything HN would recommend reading on 1960s-1970s communes and, especially, ways in which they failed?

>The people accepted to work at Valve are allegedly elite and compatible with this flat structure.

That or the people that have niched themselves into positions of unwritten-but-assumed authority have decided to hire quiet followers.

Just because someone calls an environment a 'flat system' doesn't make it true. There exists just as likely, a very defined system controlled by seniority.

I think high barriers lower, but cannot prevent, the incidence of shenanigans. But good point.

Heh, to me that makes it sounds like the politics it would be worse at Valve, not better.

Why would the politics be worse? You are supposedly hiring people who are culturally compatible, possibly apolitical.

> Microsoft would go to any lengths to protect and improve morale.

Like in "The beatings will continue until morale improves"?

More like "the private office with a view and your selection of furnishings and gear, free food, unlimited and unquestioned requisitions policy, Friday sports, renting of whole movie theatres for teams to watch their favourite films, changing of schedules, embarrassing displays by senior executives for the amusement of staff etc etc etc will continue until morale improves".

Microsoft has, of course, changed. But in the 90s it was probably the best place in the industry to actually work, if the articles and books written about that period are even vaguely accurate.

Much less so now. Open space plans (I call them "Moo Towns") are killing the ability to concentrate at Microsoft.

The interesting thing is that Valve has similar open space areas. You could substituate a photo of one for another. The big difference at Valve is that people have /self selected/ into the other people they are working with, and can move any time.

The ability to choose is worth any likely amount of "morale budget."

"Moo town" is a brilliant coinage. Thank you.

Google is full of horror stories about bureaucracies and abusive/ignorant/incompetent managers?

It's true that there are a few disgruntled ex-Googlers that may give you this impression.

But I don't believe you'll find many current Google employes who will agree with that.

Because if they did, they wouldn't be current Google employes anymore?

Um - No.

But see, here's the thing.

Unless you're running a multi-million dollar fraud, money is the proof it works.

Proof as in: a lot of other smart people do worse.

Of course, Google, Apple, MS, Valve products are all different, and they would probably be bad at doing the other company's job (to a certain extent)

And yes, MS is monopolistic, is inefficient at work, have several divisions that are a money sink. Still, last I heard, they only lose in profits to oil companies.

Yes, some models require more money to work, still, they got that money in the first place and are free to work like that for as long as it works.

Being profitable proves only that your revenues exceed your expenses. Drawing any other causal conclusion leads to confusion.

Or worse: an article in the Harvard Business Review.

The mere existence of a company that is both successful and uses a particular management approach proves only that the management approach is not so horrible as to actually be incompatible with success. To argue that the management approach contributed to the success in a meaningful way requires more evidence.

Completely agree. The key to business success: make a lot of money. Like Bill Clinton posted on the wall, it's the economy, stupid. It's sadly obvious but its nearly unbelievable because its the answer that seems too vapid and cyclical to have explanatory power.

Very interesting point! I would also like to add that the type of product being "manufactured" adds to the general direction of how a company is being run. If a company is full of people that understand enough of the business to shape future requirements, my belief is that, they tend to gain more from self organizing than companies that only have a subset of people with enough domain knowledge. If you have a very narrow and deep domain and 1/10 employees that really understand enough to be able to shape future backlogs, then having everyone self organize will not really solve the bottle neck that is those people.

Maybe the lesson is that there's more than one way to make things work. I like to think of the biological world, where different organisms have been successful using vastly different survival strategies. You can't point to the way that elephants live as evidence that crocodiles are doing it wrong.

I think it's also very important to consider the different businesses these companies are in; some management structures naturally lend themselves to certain industries more than others. For example, something tells me that the "velvet sweatshop" model might not work so well for Shell, while obviously the data-driven model is a very natural fit for Google's business.

I think the idea that you can just look at that one, oh-so-great management idea at Valve and then just apply it at your own startup or company is just more wrong than it might be right. All these places somehow grew into what they are doing now and there maybe were smart people making the "right" decisions along the way or it was simply nobody frakking up along the way and since money is still rolling in, everything is great. And what is working for them might be terrible at your place, no matter how romantically "right" it sounds. Maybe what you call Apple's "Stalinism" just worked because Steve was who he was - so all those suits now reading up on him and getting management ideas now because Apple is successful, that's probably a very bad idea because the topic is too complex and you are too likely to fail by just copying an idea without everything else that went into it at the place you are copying from.

You've illuminated a good point that I completely failed to make: transplanting bits and pieces of a system into a different context often fails. The totality of a system matters. Especially in complex systems where the graph of causality is very vague.

My hobby is Olympic-style weightlifting. One thing that happens a lot in my sport is cargo-culting whichever country happens to be dominant at the moment. Back in the 1990s everyone got very excited about the "Bulgarian" training system, which was quite different from the "Russian" system which had dominated from the 60s.

In the USA in particular, wholesale attempts were made to adopt the Bulgarian system for elite athletes. Results? Very disappointing.

The context is wildly different. Bulgarian coaches had a feedstock of hundreds of thousands of lifters. If a lifter was wrecked by the extremely aggressive Bulgarian method, so what? You just replaced him with another lifter, there were plenty more coming up the pipeline. Given that in a larger sample you can find more outliers, mere numbers predicted a large fraction of the Bulgarian success -- and before that the Russian success.

Mere numbers today predict the success of China in the lighter divisions; mere numbers in future will predict that China will steadily improve in the heavier divisions as Chinese youth become taller due to westernised diets with more protein and calcium.

But the cargo culting has begun. Weightlifters already talk about "the Chinese System" as if there was some single, monolithic master plan. There isn't really. There's just a metric shit ton of Chinese weightlifters in the lower leagues and the elite international coaches can pick out the best of the best.

For the same reason, New Zealand is rugby superpower, nobody can beat the USA at gridiron, Australia is barred from entering the international Australian Rules Football contest because even our lowliest semi-pros dominate any such match up ...

I do agree with your assessment of the sizes of the talent pools in Russia, USA and China. Back of the envelope calculations don't support your assessment of the Bulgarian talent pools though.

Your assumption that the Bulgarian coaches have a feedstock of hundreds of thousands of lifters is very far from the truth - the whole Bulgarian population is considered to be around 7.3M people, which doesn't account very well for all emigrants living abroad. Out of these 7.3M only 16% (~1M) are aged 0-17 (I assume that 14-15 y/o is the usual age that a lifter starts training professionally). That means that at the moment there are around 100K teenagers (aged 14-15), out of which less than 50K are male.

During the past 20 years sports have lost a big chunk of their (state) funding and therefore the attractiveness for young uneducated kids have lowered substantially, further reducing the pool of athletes.

I consider the three most prestigious and popular sports for males in Bulgaria to be football (soccer), wrestling and weight-lifting.

I'm actually having trouble nailing down a source for where I got the 200k number. It was for total registered lifters at all levels, including youth, juniors, seniors and masters. When a sport is popular in a country, it's played at all ages.

Meanwhile the USA had, until Crossfit, about 3,000 lifters. Not a very big pool to draw from.

You correctly point out that state funding for Olympic sports collapsed some time back and that this removed the quasi-professional pathway.

For a similar reason, few athletes in the anglosphere who is naturally strong and power will go into weightlifting. They're playing gridiron or rugby. Those sports are popular and have lucrative professional leagues.

Have you considered the possibility that the Bulgarian success was at least partially based on doping ?

I don't know much about weight-lifting, but I recall many scandals in the past years about disqualified Bulgarian athletes for doping.

(I am Bulgarian.)

I usually leave doping out of the discussion because it's not a point of distinction. Most dominant countries have doping programs. It just seems as though the Bulgarians are particularly inept at planning their steroid cycles to avoid detection at international meetings. Or possibly Ivan Abadjiev doesn't care how he loses lifters -- whether through quitting, injury or doping charges.

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

I would guess, not well. The minute that they start losing money and are forced to seek investment/debt/rescue, is the minute that their current org-structure dies.

I still remember Groupon's offices being shown as an example to follow, and that was what, a year and a half ago?

BTW I just wanted to add that despite all the talk about current Valve's efficiency with the old Valve there was only 5-6 years between HL1 and HL2, while its been 6 years since HL2EP2, and 9 years since HL2.

In comparison since HL2 there were Halo 2, 3, ODST, Reach and 4. Id launched Doom 3, Quake 4 and Rage. And we had Bioshock 1, 2 and 3, and Gearbox made both Borderlands games.

Valve is way too focused in catching up to F2P IMHO, and it should be careful since the social gaming party is already over and I've seen more than a couple of F2P games that get no "whales" at all, if you catch my drift.

Then again, it's not as if a traditional organization is super efficient. If they have less money, they simply can distribute less bonuses.

I don't see how the organization itself costs money, unlike other companies who go for physical perks (food, massages, fancy offices, toys...).

From an individual perspective though, that is not really true. There are plenty of jobs that are so dysfunctional that no amount of money would make it worth working there.

> everything works when the money is flowing.

Don't we have examples of financially successful projects with various problems? A growing number of employees may bring in communication inefficiency, for example. Now this probably won't undermine company success, and from the point of people at the top it may be all good regardless.

For other values of ‘all good’, though, I'd argue structure and organization matter.

As they say in sports, "winning cures everything".

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...

Thanks, that link is way more interesting.

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

Thank you very much, this should be higher because the podcast is very insightful.

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.

There are no bosses at Valve and they have a stack ranking system deciding how much money you make.

This means people there don't do unglamorous things like maintenance and stability fixes.

Shouldn't being involved in an interesting project (e.g. Steam Client) mean you'd actually want to see it through to completion and iron out bugs, etc. - assuming the developers actually care about their work?

In theory maybe.

In practice, makers are different people from polishers, and Valve's system of hiring the "best" (people with impressive CVs) and salaries based on stack ranking means there is a huge bias towards makers (Who brought the company more money? the person who helped roll out dota2 or the person who fixed edge cases in the steam client?).

Many of Valve's products are full of bugs that don't get fixed for years. And since they only hire the "best", they don't have any testers. Many times patches are released that cause servers to crash within seconds (tf2 falling damage crash). And sometimes they release them on Friday which means it doesn't get fixed until Monday (Overflow error writing string table baseline crash). These patches were also mandatory.

What's missing is negative reinforcement. If not through a management hierarchy, some sort of Customer Pain Index is at least required. Every crash, every slow load, every extra click, every reported bug, every support call would push the index up.

Edit: though, to contradict myself, this is still as gameable as all hell if you do something silly like connecting it to reward and punishment.

"See it through to completion" != "iron out bugs"

I think that the old distinction between "development" and "maintenance" is particularly arbitrary and artificial in the games industry.

I don't agree with this. Good developers realize that no work is beneath them. Getting things 'right' takes hard work and part of that work can be menial at times. Part of being a good engineer is understanding that completing a project is both glamorous and boring at times.

> Good developers realize that no work is beneath them.

We're into No True Scotsman territory here.

Cart before horse problem framing.

GOOD programmers know a lot of things. Put them in an environment that saps their initiative and they do 1 of 3 things: Leave, succumb or adapt.

Developers are people, too, and morale is complex, dynamic, and fragile.

I never really thought about it this way. Nothing will probably ever stop Valve from being successful, but I do think they would be more successful if they contracted out half of their work (i.e. the boring/uncreative jobs).

Creating a caste system can lead to unhealthy social dynamics.

The only thing that works is deliberately cultivating a culture where driving out the old bads is as important as creating the new goods.

Put another way: for self-direction to work, the culture needs to rank improvements as highly as novelty. Possibly higher.

They've already got a caste system, actually. If Valve hires you to do customer support, the only thing you can ever do at Valve is customer support. They don't allow sideways-promotion from their support department like many game companies do with QA/support staff because they don't want there to be a 'back door' into the company.

> Put another way: for self-direction to work, the culture needs to rank improvements as highly as novelty. Possibly higher.

Which it never does. At least, I have yet to experience or hear of a (software) engineering culture in which that's true.

I began to write about Toyota and Admiral Rickover's "Nuclear Navy" cultures, but then stopped.

I'm not sure if cultures like Toyota or the Nuclear Navy can be considered under this heading, as they mostly worked at a procedural-improvement level, rather than a product-improvement level.

There are no bosses at Valve and they have a stack ranking system deciding how much money you make.

This means people there don't do unglamorous things like maintenance and stability fixes.

How to create an incentive for this kind of work is an interesting problem, and I don't know enough about Valve to know if they've solved it.

I will say that the alternative is more dysfunctional. Closed-allocation, corporate alternative: some number of people are staffed on the ugly, career-damaging maintenance projects. The good ones either find a way to play the politics and move, or they quit, the bad ones stay. The end result is that the maintenance work is done by incompetents who don't care. This is a big part of why most legacy code only gets worse over time: the maintenance work is given to people who don't have the clout to do anything else, not to people who care enough about the health of the project to do it well.

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.

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.

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.

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.

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.

Steam never had always online (obviously this excludes online games like TF2). Steam has (ignoring offline mode here to honor your statement that it was broken for years) "check at start", i.e. the moment the game starts you must be online. Nothing else. Always online is what Ubisoft tried with Assassins Creed 2, i.e. the game communicates all the time with the server and if the connection dies you cannot play anymore.

There is precedent for software developers to responsibly shut down activation servers, such as Adobe (gasp!) who made available a serial number and software download for CS2.


You don't need to switch to offline mode while online anymore. If you start Steam with no internet access it'll just start in offline mode provided you have it set to remember your password and auto-login.

As for the DRM... has it ever really been onerous?

Steam's DRM is only offensive in theory. In practice, it works perfectly well for the vast majority of the users for the vast majority of the time.

despite being one of the first developers to push (what was at the time, onerous and nearly unprecedented) DRM on their current user-base

I used to pirate games left, right, and center. I would occasionally buy a new one if it had a good rep or I liked the series, but the default mode was 'pirate'. Since the A500 days (yo-ho, yo-ho, a pirate's life for me!). It also helped that the Australian software market is rapaciously overpriced.

Steam changed that. Steam didn't get rid of the DRM, but it added convenience like never before seen. Almost all the problems with DRM affecting the legitimate user are gone - I've never encountered a 'licensing server offline' or an 'invalid code' and only one 'sorry, licensing too busy, try again later'. I've rarely had a 'failed to install', and when I have, a 'try again' pretty much worked. The same can't be said of my experience with boxed software or pirated software. Updates are relatively seamless - Steam is acting like a package manager here, avoiding the need for everything to run its own updater. It's also a lot easier to check on any sales steam might be running - not so easy with a brick-and-mortar store(s); rare is the store website that shows the right level of stock and is regularly updated with specials.

Now, to be fair, I didn't start with steam at the inception, I've only been on for four or five years (it did get installed when HL2 came out, but I never got the sequels so didn't bother with it for a while), and when I started pirating I was a student and when I started steam I was working full-time, but even so, the convenience of being able to buy software from a trusted source and install it without having to leave the room made all the difference.

Steam does have its problems - the client is clunky (and has no tabs, grr - it's built on IE) and sometimes games can surprise you if your internet is out and they are 'online required' (which is usually invisible otherwise).

One argument that I noticed changed over the many years is "But online DRM means I won't own the game if I want to play it in X years". I've played a lot of games over the years. I return to very few - once a game is played out, it's gotta be pretty extraordinary to make it to my replay list. I still think DRM sucks, but it's largely irrelevant once the game is done.

> (and has no tabs, grr - it's built on IE)

Nope, they switched to Webkit a couple years ago. [1] (Still no tabs though..)

>I still think DRM sucks, but it's largely irrelevant once the game is done.

Wouldn't the success of something like GOG [2] kind of prove that there's a market and a reason for DRM-free games? I all but guarantee 20 years down the road, we'll still be playing games from this generation.

1. http://store.steampowered.com/uiupdate/

2. http://www.gog.com/

there's a market and a reason for DRM-free games

Sure, absolutely. I was talking in terms of my own experience with that line. I'd prefer there were no DRM, and as makomk says above, it causes problems to others that I don't see. I just meant that that one particular argument of "no ownership in X years" didn't hold much water with me personally.

This being said, I have bought System Shock 2 twice and lost it both times (once stolen, I think) and today I have been playing a pirated version (hooray for the new texture mods). That game is one of the exceptions :)

GOG is pretty badass, and I really really hope they (continue to) succeed in the marketplace.

But, selfishly, if I could buy every GOG game on Steam, GOG wouldn't get a penny of my money. I value the Steam features more than I value the DRM-free-ness. I'm befuddled that this is my position, but it is.

Sadly, that's not always the case with Steam - Portal 2's DRM is really annoying. It randomly broke with cryptic error messages or even just silently exited if you tried to run it under Linux using Wine, or used the wrong antivirus software under Windows, or installed it on a FAT filesystem rather than NTFS, or used NTFS symlinks to move the install, or... Apparently the DRM even caused some AMD CPUs to hard-lock: http://forums.steampowered.com/forums/showthread.php?t=25521...

I think Steam is proof that most people don't really care about DRM too much if it meets two conditions:

a) it doesn't affect the consumption experience too negatively. b) the platforms pros (e.g. ease of distribution) outweigh the cons (i.e. DRM)

I can't remember the last time I cursed Steam's DRM system, honestly. Most of the time I don't even think about it.

Because Steam is easy and it always seems to work as expected. They also have a great catalog. I've spent more money buying games through Steam than I have with any other method.

Edit: I forgot the Sales. Those damn Steam Sales get me every time.

Steam wasn't a popular service when it first came out. Many people hated it. It grew in popularity slowly, partly because Valve and Gabe knew how to engage the community and released stellar games. That and it turns out a digital distribution platform is a good idea.

I don't think Steam was onerous compared to widely used game copy protection systems (SecuROM, SafeDisc, StarForce, SafeCast, ...) which installed kernel drivers and who knows what else on your system and had numerous other problems.

At Valve, developers work on the projects that interest them. I imagine the actual Steam client is not that interesting of a task compared to HL3 or Portal 3, etc.

Seems worthwhile to mention the (leaked?) Valve Handbook. It explains a lot of this stuff: http://newcdn.flamehaus.com/Valve_Handbook_LowRes.pdf

Besides, Steam is just a delivery platform. They make money on games, not Steam, so as long as it is good enough...

I would imagine Valve making more money from Steam now than from their own games. Remember they sell a lot of third-party stuff there and take their cut on those sales.

They make lots of money on Steam. They take a healthy cut of everything sold on the platform.

As a gateway to all their games, is Steam critical to the company?

It's the difference between being a distributor vs being a creator.

Steam is the most critical part of the company for their future.

Steam hasn't been slow or unreliable for me in years. They're one of the biggest consumers of internet bandwidth in the world. Also the UI was completely redone in the last year. Maybe your views are stuck in 2005?

It's still pretty crashy/unreliable for me, about the same as iTunes, for what should be a fairly simple application.

Not to mention it has one of the worst chat clients I've ever come across

It's irritatingly slow starting up for me. Once it's going though, it's rock solid and fast enough.

I opened Steam three times in the past hour and it updated itself every time. Ask me tomorrow and something else weird/buggy/slow will have happened.

It certainly gets the job done, but so does IE.

A telling analogy - as it's built on IE. Or at least, used to be.

Steam Cloud Sync can be a bit flaky at times, which is annoying when you play something like Civ V on multiple machines.

Takes considerable time to load for me on Windows and doesn't work at all for me on Linux.

And I wonder how they qualify as "makers" since they hardly released any game for years now. And let's not talk about HL Episode 3...

That's sort of unfair, I think. Off the top of my head, there was the new Counter Strike late last year, Portal 2 the year before, plus the level editor/sharing update last year, DOTA2 in beta at the moment, constant updates to TF2, recent OSX and Linux ports of most Valve games and Steam, the Source engine and related tools, the Steam Box project, the mod workshop for some games, Steam Greenlight, and whatever games they've yet to announce still in development.

Considering Valve Corp as a whole supposedly has a total of only about 400 employees and is acting as a developer house, publisher, and 3rd party distribution system rolled into one, I think they've got a pretty fantastic churn rate.

EDIT: Just want to say I wasn't the one who downvoted you.

Hey, I do not mind being downvoted anyway. I stick to my opinions no matter if they are unpopular.

I know what you mean, but apart from Portal 2 the rest does not really qualify from development from scratch (even Portal 2 is dubious on that aspect, since it takes all the mecanisms from the previous games and expands on it). While I love what they do as a distributor and very much appreciate what they do for Linux support, as a pure game developer they fall short of expectations, and they have not done anything very original for a while. For a company with a "flat organization" that is somehow disappointing.

They do use outside staff for development, at least in some cases, so perhaps talking about the 400 employees is a little misleading. For example, Hidden Path Entertainment did a lot of work on the new CS title, and Wikipedia tells me they also did some models work on Left 4 Dead 2. I've no idea about the other games, perhaps they are all done 100% in-house.

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?

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

Doubt this link is remotely accurate.

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.

The other numbers (solid bars) seem reasonable.

There was a talk recently Gabe gave a university, where he was sort of talk generically about how Valve compensates, and the figure of half a million was mentioned for a hypothetical hire from Weta. That's the closest to a number from Valve I've heard.

Edit: found the talk and the moment, and it wasn't quite as I remember http://www.youtube.com/watch?feature=player_embedded&v=t... Rather he was talking generically about employees getting paid something that reflects the value they bring.

Fyi, to link to a specific time from another page you need to do &t=15m10s rather than #15:10.


Oh really? http://www.youtube.com/watch?v=t8QEOBgLBQU#t=15m10s

This works fine for me. The javascript reads it I suppose.

ah, then maybe it's the "15:10" that doesn't work. That's what the op originally had instead of 15m10s.

That would be it. To be fair though I have more success with ? than #.

Aha, thanks! That would explain why it didn't work for me...

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_...

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

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

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

Guess I just don't follow the gaming scene closely enough...


Didn't Newell explicitly deny that?

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


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.

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.

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.

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.

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!

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

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

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.

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

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

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

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.

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

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).

I'm of the impression that people who contribute data to Glassdoor are the ones who are looking to change jobs or who want to bitch and moan. In other words, severe downward bias.

Not necessarily. At least in the case of my company, both the salaries and people's anonymous reviews are extremely accurate.

I don't think it's "leaked" - it's available at their official page http://www.valvesoftware.com/jobs/

Too, there seems to be a lower-than-expected paycap for people who work on games. I suspect this comes from the abundance of people who want to do it?

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.

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.

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.

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

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.

>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?

>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.

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.

Meanwhile, no half life 3. :P

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.

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.

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:


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

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

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.

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.

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.

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