Newell details origins of Valve's internal culture

Experiences at Microsoft and release of Doom informed Valve's approach to organisation

Gabe Newell, managing director of Valve Corporation, has detailed the role of Microsoft and id Software in the formation of the company's internal culture.

Newell, Valve's managing director, spent 13 years working at Microsoft, much of it as a producer on the the early versions of Windows. Towards the end of his time with the company, an investigation into consumer behaviour yielded startling results.

"What was so shocking to me was that Windows was the second highest usage application in the US. The number one application was Doom, a shareware program that hadn't been created by any of the powerhouse software companies," he told Bloomberg Businessweek.

"It was a 12-person company in the suburbs of Texas that didn't even distribute through retail, it distributed through bulletin boards and other pre-internet mechanisms. To me, that was a lightning bolt.

"Microsoft was hiring 500-people sales teams and this entire company was 12 people, yet it had created the most widely distributed software in the world. There was a sea change coming."

The example set by id Software led to Valve's decision to dispense with formal marketing and sales departments, instead asking its individual developers to engage with measuring and improving customer satisfaction directly.

This tailored approach became key to the formation of Valve's entire culture: define the areas in which the company had to excel, and building from there.

"We realized that here, our job was to create things that hadn't existed before. Managers are good at institutionalizing procedures, but in our line of work that's not always good. Sometimes the skills in one generation of product are irrelevant to the skills in another generation," Newell continued.

"Our industry is in such technological, design and artistic flux that we need somebody who can recognize that. It's pretty rare for someone to be in a lead role on two consecutive projects."

The Valve employee handbook was uploaded to the internet without permission last week. The culprit had requested a copy after hearing Newell mention it during his appearance on the Three Day Cooldown podcast.

To view the handbook, click here.

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Latest comments (3)

Weston Sohlden5 years ago
Great read, thanks.
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Tim Carter Designer - Writer - Producer 5 years ago
Yes, and when the Germans were the first to use tanks as forward assault forces, they took over France in a matter of weeks.


As soon as the other countries found out their strategy, they too imitated their tactics...

After which war once again became a tough slogging match.

The moral of the story:

One success at a time and place where you surprise the competition cannot be repeated indefinitely. Soon the competition learns what you're up to, and then you need to fall back on the tried-and-true values - because the wise don't ignore history.

(Of course, this isn't to say you should stop searching for the sea change breakthrough - but you cannot predict when this will be discovered.)

Edited 2 times. Last edit by Tim Carter on 1st May 2012 5:15pm

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Murray Lorden Game Designer & Developer, MUZBOZ5 years ago
The handbook is pretty rad and inspiring.
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