Valve is a unique company with no traditional hierarchy. In business school, I read a very interesting Harvard Business Review article on the subject. Unfortunately it’s locked behind a paywall, but this is Google AI’s summary of the article which I confirm to be true from what I remember:
According to a Harvard Business Review article from 2013, Valve, the gaming company that created Half Life and Portal, has a unique organizational structure that includes a flat management system called “Flatland”. This structure eliminates traditional hierarchies and bosses, allowing employees to choose their own projects and have autonomy. Other features of Valve’s structure include:
Self-allocated time: Employees have complete control over how they allocate their time
No managers: There is no managerial oversight
Fluid structure: Desks have wheels so employees can easily move between teams, or “cabals”
Peer-based performance reviews: Employees evaluate each other’s performance and stack rank them
Hiring: Valve has a unique hiring process that supports recruiting people with a variety of skills
Kinda sounds like how worker cooperatives work tbh, but with Gabe still technically being the owner.
I remember reading a news piece a while back about how the founder of a food company made sure to transfer ownership to the employees before leaving. While we’re talking about worst-case scenarios, let’s also hope for the best and hope that Gabe has a similar plan.
It would be best to convert it to full employee ownership if it isn’t yet. As long as a steady stream of good employees keeps revolving in it should be a stable company that provides for its employees and customers.
PeopleMakeGames has a two part series on Valve that’s pretty interesting. The second part (here) dives into the structure of the company. It does have a bit of an angle, fwiw, so if you’d prefer something more objective, it might not be a great watch. Personally I think the issues they bring up are valid, but figured I’d mention it.
Lots of companies have peer based employee reviews, cliques have the capability to cause harm in these firms but normally the peers reviewing you are rotated each review period to minimalise that and any bad actors can normally seen by management’s review of the peer reviews.
I don’t believe Valves claim of perfectly flat structure, Gabe is the owner, he if no one else is management and has the power. I’m willing to bet there’s a second level of reviewers for peers, if nothing else then it’s a second separate set of peers reviewing the first set’s reviews to watch for this problem.
Fun fact: Former employees of Valve have said that is actually a huge problem in the organization and that its organizational structure seems to encourage bullying and high-school style “cliquishness” by design.
I mean it’s not as though that’s not a problem in normal companies. It’s just that normal companies can sort of use the guise of structure or professionalism to harangue whatever employees the clique ends up disliking. The cliques are baked in, in a normal company.
Stack ranking is toxic and removes individuality from a given employees expectations in my opinion.
People should be qualified to give proper unbiased reviews. Just because someone is an excellent engineer does not mean they are good at understanding other people’s expectations and work outputs.
I worked at a company that had no ‘managers’ just the owner, and everyone else. I hated that I had no real way to settle disputes and every single disagreement has to ultimately be resolved by the literal one person who was in charge.
I think there is merit to flat structures, but I don’t think the extreme is always the way to go.
Do you know everybody who works there and what their ambitions are?
Also, nothing is impossible when you can deploy thepower of acquisition lol i’m less worried about them internally polluting themselves and more about externally being destroyed. We’ve seen this over and over again.
Apparently 50%+ of the company belongs to Gabe himself, presumably he would pass it on to some very trusted. That makes a hostile takeover pretty unlikely.
I really hope he is secretly investing in cloning so we can get Gaben (2) joining Valve soon. Or atleast invest some money in uploading his consciousness into a giant metal head 🗿
Yeah the scenario we’re being asked to consider is what if someone else gets control of the company, so whatever power employees nominally have now, they won’t if he dies without deeding the company to a collective.
Realistically, it’s only a matter of time until Steam becomes as enshittificated as any other services. There is profit to be made from Steam selling advertising space and customer data. They can either choose to capitalize on the profits that are in front of them, or allow another company to and take that capital from them. For a business it’s not a matter of what’s right and wrong anymore but consume or be consumed. If Steam isn’t willing to do that someone else will be willing to play the long game and do it. Then it’ll be only a matter of time until Steam gets acquired by another company and then it’s game over.
This doesn’t make any sense. The reason Valve hasn’t been acquired is because it’s privately owned and not up for sale, not because it doesn’t have “enough profit”. In fact it’s extremely profitable, for all we know.
Sure, another company could come along and build a competitor. It’s happened already multiple times, and Steam is doing just fine despite some major titles these days being exclusive to other platforms. Unless Steam drops the ball on something big time, it’s unlikely that people will move to another platform en masse, especially one that is less focussed on consumer interests. No-one can just come in and “take capital away” from Steam, whatever that means, by building a competitor that sells advertising space and “monetizes user data” — they need users first.
… And then there’s the fact that Steam is already “selling advertiser space” today. Games don’t just get featured on their storefront because Gabe likes them. They make deals with publishers for this.
I don’t have the article on hand, but there is a publication from a steam store employee explaining exactly how to get your game onto the front page. The gist of it is that you don’t have to pay Valve. It’s about community engagement (your publisher, I guess).
I’ve read that, IIRC. It was about getting featured organically though. Steam runs promotions for certain game series or even publisher catalogues frequently, with large custom graphics and usually a sale. Obviously I have no way to know for sure, but I can’t imagine that Valve doesn’t get itself paid for those.
The idea is less that someone makes a competitor and then they actually compete. The idea is that a competitor service is able to lock away one or several big titles, like, say, overwatch, league, fortnite, or whatever else, behind exterior launchers that are maybe more free to do data harvesting. Then, that competitor theoretically eats away more and more of the largest market share, and tries to drive those users from just using their platform for a single game, to maybe using multiple games, maybe with something like a games pass or with free weekend deals or whatever. Once they have that market share, they can give developers better margins, since they’ll be selling customer data at a profit and steam won’t be, maybe with some sort of exclusivity contract baked in, purposely undercutting steam. Then, steam’s been put on the back foot, and the rest is just kind of what has happened to streaming services.
It’s a market, markets trend towards short term gains strategies over long term gains strategies because having faster short term gains means you can more easily crush your competition. It’s like age of empires 2, the first couple minutes of the game is the part that matters the most. That being said, steam has been around for quite some time, and has a good amount of brand loyalty and goodwill built up, and that doesn’t seem to be slowing down anytime soon as they keep one-upping their competition with actual improvements to their platform, like family sharing, screencasting, big picture mode, increased controller support and reassigning, and a full standalone version of linux, that basically all their competitors seem incapable of. So maybe steam has enough of a headstart that, even with a long term gains strategy, even with a, basically, non-evil mentality, they can stay afloat. Who can say.
You’re of course right with the exclusivity argument — that’s a very real possibility, and yet Microsoft has tried it with Call of Duty, one of the most popular franchises ever, and saw very little success with it, resulting in them putting it back on Steam years later. If I were to guess why attempts like this have failed in the past, I would say that Steam is so dominant over the PC gaming market today that not even large franchises going exclusive attract enough of a user base to offset the loss of customers that aren’t buying games only because they’re not on Steam. Add to this the additional overhead of developing and maintaining a competing store front, and the cost-benefit analysis leans clearly towards just being on Steam and accepting their cut of sales. The exclusivity tactic clearly failed even for big titles like CoD, so it definitely won’t work for smaller ones. And we’re not even talking about cutting into the indie game market, which would require making very attractive exclusivity offers to many smaller studios, all for acquiring exclusivity on titles in the hope that they’ll be the next big hit — a very high risk strategy that likely results in a lot of sunken cost short-term.
Once they have that market share, they can give developers better margins, since they’ll be selling customer data at a profit
When we talk about “selling customer data”, I think we need to look in more detail into what this would actually mean in practice. It’s very unlikely that any online storefront could legally literally “sell your personal data” like address etc. that you would enter presumably as part of the payment process to third parties. That’s just illegal almost everywhere in the world, and certainly in the largest PC gaming markets. It wouldn’t lead to significant revenue either, because raw data like that just isn’t very valuable. Instead, I suppose what people mean when they say this (in the context of companies like Google or Facebook) is just the practice of selling advertising services that use the data they have on people to advertisers, who can then target their ads at highly specific segments, improving their return on ad spend. The actual private data though stays with the entity that collected it — because it’s what actually gives them the edge on the market; it allows them to offer better ad targeting than competitors.
How would this apply to Steam or a potential competing storefront? Barely. I assume no-one is arguing that a steam competitor could launch a generic advertising network that could stand against Google or Facebook, so we’re probably talking about advertising within the storefront itself. Steam today already collects information on your interests and customizes the store based on that, plus presumably your location, age group etc. — so they’re pretty much already using your “personal information” to the extent possible in this context. How else could a competitor realistically monetize personal information?
It’s a market, markets trend towards short term gains strategies over long term gains strategies because having faster short term gains means you can more easily crush your competition.
I wouldn’t say that this is the case when we’re talking about trying to eat into the market share of a dominant entity like Steam. Sure, potential competitors can make short-term plays that cut away some market share, but such strategies are expensive, risky, and alone likely don’t lead towards a significantly improved position long-term (exhibit A, again: COD being exclusive to Battle.net).
For better or worse (usually worse), toppling a near-monopoly like Steam is extremely hard for players with big cash, and practically impossible for independent competitors. This is especially true for products that are inherently sticky, like Steam, where people have curated large libraries over decades. The only reason Steam’s dominant position is not hurting the consumer is because their product works well and is in many ways very pro-consumer.
I’d drop Steam if that happened. There are other ways to get games and managers like Lutris make organizing them easy. I’m sure Valve knows this and with how long they’ve been successful, fucking with gamers would not make sense. Look how it’s working or for some of the bigger gaming companies recently.
Valve is a whole company of people like Gaben.
Valve is a unique company with no traditional hierarchy. In business school, I read a very interesting Harvard Business Review article on the subject. Unfortunately it’s locked behind a paywall, but this is Google AI’s summary of the article which I confirm to be true from what I remember:
According to a Harvard Business Review article from 2013, Valve, the gaming company that created Half Life and Portal, has a unique organizational structure that includes a flat management system called “Flatland”. This structure eliminates traditional hierarchies and bosses, allowing employees to choose their own projects and have autonomy. Other features of Valve’s structure include:
Kinda sounds like how worker cooperatives work tbh, but with Gabe still technically being the owner.
I remember reading a news piece a while back about how the founder of a food company made sure to transfer ownership to the employees before leaving. While we’re talking about worst-case scenarios, let’s also hope for the best and hope that Gabe has a similar plan.
Him being a pretty smart guy overall surely has at least some sort of continuity planned.
It would be best to convert it to full employee ownership if it isn’t yet. As long as a steady stream of good employees keeps revolving in it should be a stable company that provides for its employees and customers.
PeopleMakeGames has a two part series on Valve that’s pretty interesting. The second part (here) dives into the structure of the company. It does have a bit of an angle, fwiw, so if you’d prefer something more objective, it might not be a great watch. Personally I think the issues they bring up are valid, but figured I’d mention it.
A little unsure about the “peer based performance review”, sounds like bullying might somehow have to be kept in check. Otherwise this sounds awesome.
Lots of companies have peer based employee reviews, cliques have the capability to cause harm in these firms but normally the peers reviewing you are rotated each review period to minimalise that and any bad actors can normally seen by management’s review of the peer reviews.
But then remove the management oversight
I don’t believe Valves claim of perfectly flat structure, Gabe is the owner, he if no one else is management and has the power. I’m willing to bet there’s a second level of reviewers for peers, if nothing else then it’s a second separate set of peers reviewing the first set’s reviews to watch for this problem.
Fun fact: Former employees of Valve have said that is actually a huge problem in the organization and that its organizational structure seems to encourage bullying and high-school style “cliquishness” by design.
I mean it’s not as though that’s not a problem in normal companies. It’s just that normal companies can sort of use the guise of structure or professionalism to harangue whatever employees the clique ends up disliking. The cliques are baked in, in a normal company.
Exactly, in a normal structure the bullied employee would just be told they don’t fit the culture.
It can be a problem at other companies, but even worse than average at Valve by virtue of corporate structure. Both of these things can be true.
Stack ranking is toxic and removes individuality from a given employees expectations in my opinion.
People should be qualified to give proper unbiased reviews. Just because someone is an excellent engineer does not mean they are good at understanding other people’s expectations and work outputs.
I worked at a company that had no ‘managers’ just the owner, and everyone else. I hated that I had no real way to settle disputes and every single disagreement has to ultimately be resolved by the literal one person who was in charge.
I think there is merit to flat structures, but I don’t think the extreme is always the way to go.
How does more boring tasks like accounting, legal or facilities work?
They just get ignored, like TF2.
This, and as long as the company is legally structured to prevent restructuring things will be fine.
Do you know everybody who works there and what their ambitions are?
Also, nothing is impossible when you can deploy thepower of acquisition lol i’m less worried about them internally polluting themselves and more about externally being destroyed. We’ve seen this over and over again.
Apparently 50%+ of the company belongs to Gabe himself, presumably he would pass it on to some very trusted. That makes a hostile takeover pretty unlikely.
I really hope he is secretly investing in cloning so we can get Gaben (2) joining Valve soon. Or atleast invest some money in uploading his consciousness into a giant metal head 🗿
We’ll never have a gaben (3) 😭
We will if he’s not around to stop us
I would hope he does something like the patagonia guy did.
He could just turn it into a nonprofit at some point with some specific rules in place about how certain things are handled within the company.
He could presumably just spilt his shares equally between all employees
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Yeah the scenario we’re being asked to consider is what if someone else gets control of the company, so whatever power employees nominally have now, they won’t if he dies without deeding the company to a collective.
Also, the big tech bastards haven’t managed to kill off emulation, so that’s encouraging.
Realistically, it’s only a matter of time until Steam becomes as enshittificated as any other services. There is profit to be made from Steam selling advertising space and customer data. They can either choose to capitalize on the profits that are in front of them, or allow another company to and take that capital from them. For a business it’s not a matter of what’s right and wrong anymore but consume or be consumed. If Steam isn’t willing to do that someone else will be willing to play the long game and do it. Then it’ll be only a matter of time until Steam gets acquired by another company and then it’s game over.
This doesn’t make any sense. The reason Valve hasn’t been acquired is because it’s privately owned and not up for sale, not because it doesn’t have “enough profit”. In fact it’s extremely profitable, for all we know.
Sure, another company could come along and build a competitor. It’s happened already multiple times, and Steam is doing just fine despite some major titles these days being exclusive to other platforms. Unless Steam drops the ball on something big time, it’s unlikely that people will move to another platform en masse, especially one that is less focussed on consumer interests. No-one can just come in and “take capital away” from Steam, whatever that means, by building a competitor that sells advertising space and “monetizes user data” — they need users first.
… And then there’s the fact that Steam is already “selling advertiser space” today. Games don’t just get featured on their storefront because Gabe likes them. They make deals with publishers for this.
I don’t have the article on hand, but there is a publication from a steam store employee explaining exactly how to get your game onto the front page. The gist of it is that you don’t have to pay Valve. It’s about community engagement (your publisher, I guess).
I’ve read that, IIRC. It was about getting featured organically though. Steam runs promotions for certain game series or even publisher catalogues frequently, with large custom graphics and usually a sale. Obviously I have no way to know for sure, but I can’t imagine that Valve doesn’t get itself paid for those.
The idea is less that someone makes a competitor and then they actually compete. The idea is that a competitor service is able to lock away one or several big titles, like, say, overwatch, league, fortnite, or whatever else, behind exterior launchers that are maybe more free to do data harvesting. Then, that competitor theoretically eats away more and more of the largest market share, and tries to drive those users from just using their platform for a single game, to maybe using multiple games, maybe with something like a games pass or with free weekend deals or whatever. Once they have that market share, they can give developers better margins, since they’ll be selling customer data at a profit and steam won’t be, maybe with some sort of exclusivity contract baked in, purposely undercutting steam. Then, steam’s been put on the back foot, and the rest is just kind of what has happened to streaming services.
It’s a market, markets trend towards short term gains strategies over long term gains strategies because having faster short term gains means you can more easily crush your competition. It’s like age of empires 2, the first couple minutes of the game is the part that matters the most. That being said, steam has been around for quite some time, and has a good amount of brand loyalty and goodwill built up, and that doesn’t seem to be slowing down anytime soon as they keep one-upping their competition with actual improvements to their platform, like family sharing, screencasting, big picture mode, increased controller support and reassigning, and a full standalone version of linux, that basically all their competitors seem incapable of. So maybe steam has enough of a headstart that, even with a long term gains strategy, even with a, basically, non-evil mentality, they can stay afloat. Who can say.
You’re of course right with the exclusivity argument — that’s a very real possibility, and yet Microsoft has tried it with Call of Duty, one of the most popular franchises ever, and saw very little success with it, resulting in them putting it back on Steam years later. If I were to guess why attempts like this have failed in the past, I would say that Steam is so dominant over the PC gaming market today that not even large franchises going exclusive attract enough of a user base to offset the loss of customers that aren’t buying games only because they’re not on Steam. Add to this the additional overhead of developing and maintaining a competing store front, and the cost-benefit analysis leans clearly towards just being on Steam and accepting their cut of sales. The exclusivity tactic clearly failed even for big titles like CoD, so it definitely won’t work for smaller ones. And we’re not even talking about cutting into the indie game market, which would require making very attractive exclusivity offers to many smaller studios, all for acquiring exclusivity on titles in the hope that they’ll be the next big hit — a very high risk strategy that likely results in a lot of sunken cost short-term.
When we talk about “selling customer data”, I think we need to look in more detail into what this would actually mean in practice. It’s very unlikely that any online storefront could legally literally “sell your personal data” like address etc. that you would enter presumably as part of the payment process to third parties. That’s just illegal almost everywhere in the world, and certainly in the largest PC gaming markets. It wouldn’t lead to significant revenue either, because raw data like that just isn’t very valuable. Instead, I suppose what people mean when they say this (in the context of companies like Google or Facebook) is just the practice of selling advertising services that use the data they have on people to advertisers, who can then target their ads at highly specific segments, improving their return on ad spend. The actual private data though stays with the entity that collected it — because it’s what actually gives them the edge on the market; it allows them to offer better ad targeting than competitors.
How would this apply to Steam or a potential competing storefront? Barely. I assume no-one is arguing that a steam competitor could launch a generic advertising network that could stand against Google or Facebook, so we’re probably talking about advertising within the storefront itself. Steam today already collects information on your interests and customizes the store based on that, plus presumably your location, age group etc. — so they’re pretty much already using your “personal information” to the extent possible in this context. How else could a competitor realistically monetize personal information?
I wouldn’t say that this is the case when we’re talking about trying to eat into the market share of a dominant entity like Steam. Sure, potential competitors can make short-term plays that cut away some market share, but such strategies are expensive, risky, and alone likely don’t lead towards a significantly improved position long-term (exhibit A, again: COD being exclusive to Battle.net).
For better or worse (usually worse), toppling a near-monopoly like Steam is extremely hard for players with big cash, and practically impossible for independent competitors. This is especially true for products that are inherently sticky, like Steam, where people have curated large libraries over decades. The only reason Steam’s dominant position is not hurting the consumer is because their product works well and is in many ways very pro-consumer.
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I’d drop Steam if that happened. There are other ways to get games and managers like Lutris make organizing them easy. I’m sure Valve knows this and with how long they’ve been successful, fucking with gamers would not make sense. Look how it’s working or for some of the bigger gaming companies recently.