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Can Valve's 'Bossless' Company Model Work Elsewhere? 522

Posted by samzenpus
from the missing-a-lot-of-work-lately dept.
glowend writes "I just listened to a fascinating podcast with Valve's economist-in-residence, Yanis Varoufakis, about the unusual structure of the workplace at Valve where there is no hierarchy or bosses. Teams of software designers join spontaneously to create and ship video games without any top-down supervision. Varoufakis discussed the economics of this Hayekian workplace and how it actually functions alongside Steam — a gaming platform created by Valve. I kept wondering: assuming that his description of Valve is accurate, can this model work for other tech companies?"
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Can Valve's 'Bossless' Company Model Work Elsewhere?

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  • Yes (Score:5, Interesting)

    by cervesaebraciator (2352888) on Sunday March 03, 2013 @07:55PM (#43064063)
    But only on Valve Time [wikipedia.org].
  • The game of Survivor (Score:5, Interesting)

    by Anonymous Coward on Sunday March 03, 2013 @07:57PM (#43064085)

    If you think about how they describe pushing out people that "don't fit" by group consensus, you quickly begin to see how such a workplace is actually fairly toxic. Everyone would be trying hard to get along and not piss anyone off, because, like on the reality show Survivor, once the team gets a bug in their bonnet for you, you're gone, despite your productivity or ethics. It also leads to monocultures - people will want to hire and work with people like them, the complete opposite of diversity hiring. I would be interested to see the cultural vectors for Valve. I'm betting they don't have a lot of ethnic minorities or women working there.

  • No, but... (Score:5, Interesting)

    by Sparton (1358159) on Sunday March 03, 2013 @08:00PM (#43064101)

    The short answer is no.

    The long answer is probably no, as you need a certain mix of incredibly talented people with very specific attributes. Valve is notorious for only hiring the absolute best, going for those with wide specialist knowledge (but shallow knowledge of all other aspects of game development... some kind of "T" metaphor is used by them?), and ensuring everyone they hire can be an effective leader/is capable of following an effective leader when needs be. And you can't just have a few people with those attributes; everyone in the company has to be like that.

    If you can hire only people that meet the above qualifications, then sure, you could make another Valve. But it's a very difficult (or at least expensive) proposition, and no doubt incredibly challenging to scale.

  • by gweihir (88907) on Sunday March 03, 2013 @08:02PM (#43064113)

    If you have the right kind of people, namely competent, motivated, result oriented professionals, that do not care one bit for power, but are willing to assume it temporarily in order to take responsibility for a specific part of a project (only to relinquish it freely afterwards), then this works very well indeed.

    The two reasons for people to go into management are absent here
    1. Incompetence: Doing management is often a way for people that have no real skills with regard to the product being made to join or stay in an organization.
    2. Lust for power: The other primary motivation for going into management is wanting to tell others what to do.

    In bad managers (the predominant type), both things combine. Good engineers, artists, writers, etc. almost universally want to practice their craft and get better at it. Doing any management-like function is something they will only do willingly (and temporarily) for the greater good and never as their sole function. If you have such a pool of people, the only permanent (but critical) management function to remain is to make sure nobody incompetent at or not passionate for their (non-management) job and nobody with lust for power joins the team. People that are passionate about what they do are easy to identify. Skill is harder, but doable if you invest some time to find out. Lust for power is still harder, but people that have gotten good as their primary competency rarely have it as it gets into the way.

    This also means that most companies cannot use this model, as they have been taken over a long time ago with those of no valuable skills and/or a craving for power and, from my observation, usually have quite a few incompetent non-managers in addition.

  • No (Score:5, Interesting)

    by astralagos (740055) on Sunday March 03, 2013 @08:06PM (#43064131)
    If you read Varoufakis essay pointed to there, he'll note that Valve's own management doesn't believe the company will be able to scale. More importantly, he notes that the employment process is self-selecting, and that's the rub. I found a Forbes article [forbes.com] which estimates that Google makes a profit of 350k per head, while Valve's is in the 87.5 million per head -- that's an estimate, but even if it's one twentieth, it's still ridiculous. Valve is in a unique position due to steam -- its a publishing house which effectively monopolizes PC digital distribution. They roll in so much money that they can run the company as an anarcho-syndicalist commune, a democracy, or by pulling suggestions out of a hat. They're very lucky that way and rolled the dice well -- most game studios pushing for artistic integrity have ended up as EA subdivisions for a good reason.

    Running a real company or a real government requires dealing with people who don't want to be there. Not everybody wants a career, some people just want jobs. They want to punch the clock and go home. Some people steal habitually from the till. Had I my druthers, I'd spend all day at home reading, and I'm considered a sociopathic workaholic. Some people are going to cheat. Some people are going to lie on their interviews. The test of any organization isn't how it does when it's doing well, it's how it does when its under extreme stress. Valve hasn't been under extreme stress, so the question of the effectiveness of their organization is effectively mooted. We can look to other game companies with strong egos (Origin for example, or Ion Storm) and get a good idea, though.

  • Nope (Score:4, Interesting)

    by Michalson (638911) on Sunday March 03, 2013 @08:13PM (#43064163)
    Valve has been in the unique position of having some hit titles in the past that they had good publishing deals on. That's given them the financial cushion to run things however they wanted with whomever they wanted, without any of those pesky obligations most developers have to meet to pay the bills. And then of course they stumbled onto Steam, the patching platform turned online store where they get a cut of all the other developers profits.

    To highlight a similar scenario, 3D Realms was able to dick around for almost 15 years (1996-2009) thanks to the big pot of cash they had from the first Duke 3D game and a few farmed out expansions. We know for sure now that those years where not spent under some masterful system of management creating the most polished game ever, they where terribly managed years in which the same game was reinvented every 4-6 months everytime Broussard saw a new game.

    Valve management is certainly not the disaster that was 3D Realms, but at the same time it's very hard to apply their near-zero management style without also having access to their near-zero financial obligations. Valve can afford to mess around in the kitchen for years tossing meal after meal into the garbage until they have something they like. Other developers have to feed their family tonight.

    So I guess what I'm saying is that regardless of whether the bossless model works for Valve, other companies have to actually produce games on time and on budget. Where exactly is Half Life 3...
  • Re:No (Score:5, Interesting)

    by Kell Bengal (711123) on Sunday March 03, 2013 @08:51PM (#43064327)
    I think the problem is not managers/engineers/etc per se. The problem is not the job function so much as the deadwood doing the function. I have known useless engineers, and I have known useless managers, and I have known useless administrative staff. The problem is the people: they are no good at their job and don't care to get better. The problem is, those people need to eat and pay their bills, so they have to have a job somewhere.
    I think a large part of society's ills could be cured with something akin to a basic income [wikipedia.org] that basically pensions off people who don't want to be there so that those of us who do - who are highly motivated and capable - can get on with things. Let the manager who wants to spend all day fishing do exactly that. I want to spend all day building robots and educating students. The work will get done, and our industrial processes can produce enough for everyone.
  • Re:No (Score:5, Interesting)

    by Anonymous Coward on Sunday March 03, 2013 @09:03PM (#43064367)

    so that those of us who do - who are highly motivated and capable

    Actually, I think society's main problem is a bunch of mediocre people who think they are "highly... capable".

    But universal basic income is a sound idea, and modern capitalism's worst fear (how can you enslave those who have choice?), giving me two reasons to love it.

  • Re:No (Score:5, Interesting)

    by ynp7 (1786468) on Sunday March 03, 2013 @09:10PM (#43064395)

    You haven't really thought it through or you don't understand. The garbage collector would get paid for doing his job, which would be separate from the basic income. Maybe the price of garbage collection goes up to pay the collectors more, but someone would certainly do it.

  • by greenguy (162630) <estebandido&gmail,com> on Sunday March 03, 2013 @09:14PM (#43064415) Homepage Journal

    There's an entire business model based on operating a business with no boss -- it's called [nytimes.com] a worker [wikipedia.org] cooperative [usworker.coop]. As a founder and member of one, and a friend of dozens more, I'm here to say that it works.

    The existence of one bossless model makes it easy to believe that others could exist. The presence of an authority figure, or of any kind of hierarchy, is not a requirement for business success. This isn't speculation -- there's proof in black and white.

  • Re:No (Score:5, Interesting)

    by citizenr (871508) on Sunday March 03, 2013 @09:33PM (#43064495) Homepage

    The work will get done, and our industrial processes can produce enough for everyone.

    I don't think that's really true. I sure wouldn't be doing that work. I would be doing some work, but it would be work for me, that I enjoy. The world would look like the open source landscape at best. At worst we'd have no garbage collectors.

    Thats the point, you would be living on basic income in a trailer park doing whatever it is you like to do. Smart capable people would do useful stuff and move civilization ahead. This is one of the scenarios of post scarcity world (goods/food manufactured by automatons leaving people unemployed).
      Plenty of examples in Science fiction literature. From the top of my head I can remember a short story where mandatory state IQ tests determined class you belonged to. Lowest class was forbidden from working and was provided for, higher classes were forced to work to utilize their mental capacity. Story was about a hacker helping people cheat IQ tests so they could classify as higher class and work. Incidentally that hacker had to pay another hacker to hide his own high IQ so he didnt have to work :). I forgot the name of the story :(

  • Re:Valve Handbook (Score:2, Interesting)

    by Anonymous Coward on Sunday March 03, 2013 @10:10PM (#43064625)

    Eventually, the folks working at Valve will end up getting married, buying houses, having kids, etc. etc. and will realize that their income in this communal culture is hardly enough. At that time, they will either leave for other (traditional) companies where performance is rewarded with better pay and better positions, OR they will start resenting the valve culture, which will force the company to adapt by becoming more and more traditional.

    Nice social experiment for the short haul. But the traditional companies have millennia of evolution behind them.

  • Re:No (Score:5, Interesting)

    by Kell Bengal (711123) on Sunday March 03, 2013 @10:24PM (#43064669)
    Ok, I'm curious. Let's run the numbers for my home country - Australia. The total taxation rate of GDP is about 22% [tradingeconomics.com]; our GDP per capita is about $71k [wikipedia.org]. That's about $15k per person. The minimum cost of living in Australia is about $16k [mumsgone2aus.com] per person assuming for a typical family of four. The Mincome [wikipedia.org] experiment showed that people do not stop working on basic incomes, but in fact contribute to produce and to gain higher education. It could be quite possible to set the minimum income to be something like $7.5k per annum per capital (as many people will not need it, if paid a higher wage) and use remaining tax revenue to fund defence, infrastructure and health (which account for about half the budget). It does not appear to be outlandish to me.
    CAVET EMPTOR: this post and its figures were hastily researched using google and are probably deeply flawed and entirely wrong... but they're a starting point for facts-based discussion.
  • Re:No (Score:4, Interesting)

    by DKlineburg (1074921) on Sunday March 03, 2013 @10:28PM (#43064681)
    I'm not sure if you meant this, but I know someone who doesn't work. Why? Because if they did they would loose there government funded housing. To make up the difference would require a great job. Now, do I expect that person to ever do a great job? No, but I think in this one case, if they were guaranteed a livable income, they might go find some little job for a little extra. I used to be way on one side, I'm much more open to the idea of listening to what people have to say. I don't know what the answer is, but I don't think America is doing great right now; whatever you attribute it to.
  • Re:No (Score:5, Interesting)

    by Snocone (158524) on Sunday March 03, 2013 @11:14PM (#43064807) Homepage

    Yep. There's so many poverty traps in the way benefits are lost that it's basically impossible for anyone with two kids to ever make a financial case for joining the workforce without questionably high valuation of downstream wage increases. And not doing so, of course, absolutely guarantees poverty.

    The immediate reaction is well scale this and scale that so that there's always marginal utility to working harder, but the patchwork of eligibilities and overlapping jurisdictions makes that darn near impossible to do adequately, and even attempting it an easily gamed bureaucratic nightmare.

    Switzerland is usually a good place to look at how a society manages to reconcile libertarian ideals with communitarian practicality, and if I understand correctly the way they've squared this particular circle is that families are responsible for a person's welfare before the State steps in, and if you can assume a traditional family structure and a sense of shame in not being able to provide for yourself as is still a fairly good assumption in Switzerland, that reduces the problem down to the point where the burden on the public purse is not overly significant.

    However, trying to follow that model in America would be rather problematic. If there's any sense of shame at all left in robbing your fellow citizens by means of government, it sure isn't evident anywhere.

  • Re:Valve Handbook (Score:5, Interesting)

    by SeaFox (739806) on Monday March 04, 2013 @01:49AM (#43065263)

    Eventually, the folks working at Valve will end up getting married, buying houses, having kids, etc. etc. and will realize that their income in this communal culture is hardly enough. At that time, they will either leave for other (traditional) companies where performance is rewarded with better pay and better positions,

    If this is truly just about the money what's to stop Valve from giving bonuses based on merit or incremental pay increases for seniority? Experience is worth money, too. It's not a requirement they have to move up into any sort of supervisory position to be rewarded financially for working hard and showing dedication to their company. The idea that everyone in a certain position should be paid the same range is very hierarchical itself. I suspect it was formed by the same middle-management types getting butt-hurt over the idea that someone in a position "below" them was making more money than they were, completely ignoring whether the engineers have to work harder or make a greater or less contribution to the company overall.

  • Re:No (Score:4, Interesting)

    by Omestes (471991) <omestes@NOSpaM.gmail.com> on Monday March 04, 2013 @02:03AM (#43065297) Homepage Journal

    Perhaps. I might do that for the first year, but then I'd be bored again.

    The thing is, in a hypothetical future give everyone a living wage, with enough money to basically be the equivalent of today's middle class, but don't bar them from making money doing other things, if others find it valuable.

      Though in the way this idea is commonly used, it says that we all will end up doing useful labor anyway, since we can't stand being idle. I find this absurd, though it might hold true for Americans, since we inherited a fair amount of our work ethic from our Protestant forebears. For the rest of the world? I'm sure they'd be content to sit on their butts, and spend time with their families.

    Hell, I'm not even sure that I'd do anything useful. I might devote my full time to pastimes I love, or just sit on my ass eating cheetos and playing video games... Who knows?

  • Re:No (Score:4, Interesting)

    by Anonymous Coward on Monday March 04, 2013 @02:18AM (#43065329)

    This is a silly example
    200/100 = 2x
    100/0 = Infinite

    This reminds me of a joke I heard.

    An accountant and an economist are walking in the park together. As they pass a pond they see a frog. The economist says to the accountant, "I'll pay you $40 to lick that frog." The accountant thinks about it for a moment, agrees to lick the frog, and the economist gives him his $40. As they continue, they see another frog, and the account says to the economist, "I'll pay you $40 to lick that frog." The economist agrees, licks the frog, and gets his $40. The accountant then says, "Well, what was the point of that? Now we've both licked a frog and have nothing to show for it!" The economist replies, "True, but the economy has seen an increase of $80!"

    So, after a lot of reading, I've come to the conclusion that economists aren't very rational people.

    $80 worth of entertainment value has been added, the economist is right.

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