Loved this essay.
Valve is one of the most successful independent game developers, and they’ve consistently pushed the form out to the edges, right to the point where you can feel a new art emerging. (See 1998’s release Half-Life for the origins of this approach.)
If most of the value is now in the initial creative act, there’s little benefit to traditional hierarchical organization that’s designed to deliver the same thing over and over, making only incremental changes over time. What matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation. Hierarchical management doesn’t help with that, because it bottlenecks innovation through the people at the top of the hierarchy, and there’s no reason to expect that those people would be particularly creative about coming up with new products that are dramatically different from existing ones – quite the opposite, in fact. So Valve was designed as a company that would attract the sort of people capable of taking the initial creative step, leave them free to do creative work, and make them want to stay. Consequently, Valve has no formal management or hierarchy at all.
— Michael Abrash, Valve: How I Got Here, What It’s Like, and What I’m Doing
In my own experience, the best work outcomes have happened in just these kinds of environments, ones where teams of creative people (across disciplines) are entrusted to do what they do best, and where management mainly works to support the playing field for the team. These situations are only possible when there’s massive trust in the capabilities and judgment of every person on the team, which Abrash also writes about.
Hardest of all to believe is the level of trust. Trust is pervasive. All of Valve’s source code is available to anyone in Perforce, and anyone at Valve can sync up and modify anything. Anyone can just up and work on whatever they think is worth doing; Steam Workshop is a recent instance of someone doing exactly that. Any employee can know almost anything about how the company works and what it’s doing; the company is transparent to its employees. Unlike many organizations, Valve doesn’t build organizational barriers to its employees by default; it just trusts them and gets out of their way so they can create value.
I think this perspective only works in practice if the leadership of a company operates from a view that every employee in their organization merits this kind of trust and respect — and this perspective itself presumes a baseline positive orientation towards human possibility that I see emerging in many new companies.
That’s huge, and exciting.
Ludicorp created Flickr back in the day. Via Kottke.
“Business owners do not normally work for money either. They work for the enjoyment of their competitive skill, in the context of a life where competing skillfully makes sense. The money they earn supports this way of life. The same is true of their businesses. One might think that they view their businesses as nothing more than machines to produce profits, since they do closely monitor their accounts to keep tabs on those profits.
“But this way of thinking replaces the point of the machine’s activity with a diagnostic test of how well it is performing. Normally, one senses whether one is performing skillfully. A basketball player does not need to count baskets to know whether the team as a whole is in flow. Saying that the point of business is to produce profit is like saying that the whole point of playing basketball is to make as many baskets as possible. One could make many more baskets by having no opponent.
“The game and styles of playing the game are what matter because they produce identities people care about. Likewise, a business develops an identity by providing a product or a service to people. To do that it needs capital, and it needs to make a profit, but no more than it needs to have competent employees or customers or any other thing that enables production to take place. None of this is the goal of the activity.”
To which the Ludicorporate added: “The goal is to kick ass.”
How The Atlantic went from losing $7M in 2005 to turning a profit this year, as reported in the Times.
How did a 153-year-old magazine — one that first published the “Battle Hymn of the Republic” and gave voice to the abolitionist and transcendentalist movements — reinvent itself for the 21st century?
By pretending it was a Silicon Valley start-up that needed to kill itself to survive…
“We imagined ourselves as a venture-capital-backed start-up in Silicon Valley whose mission was to attack and disrupt The Atlantic,” said Justin B. Smith, president of the Atlantic Media Company, who arrived at the magazine’s offices in the Watergate complex in 2007 with a mission to stanch the red ink. “In essence, we brainstormed the question, ‘What would we do if the goal was to aggressively cannibalize ourselves?’ ”
“Capitalism, I would assert, thrives on more, more, and more, but not so well when there is less or an expectation of less. This is not the Malthusian thesis, which maintained that at some point the world would run out of food to satisfy a growing population; it is an assertion that capitalism depends upon final demand and that if there ever comes a time when population growth slows, then the world’s most efficient economic system will be tested. If anything, my thesis is anti-Malthusian in its assertion that there will always be enough production to satisfy a growing population, but perhaps not enough new people to sustain growing production.”
– Bill Gross manages PIMCO’s gigantical bond fund. This excerpt is from his August client letter.
“As a matter of profit and loss, it doesn’t make sense to store wool in a spa and let it convalesce for six months, but the methods of Luciano Barbera were never destined for a get-rich-quick guide to manufacturing. His business will make sense only to customers, and for them, quality has a logic of its own.”
– A look at the waning days of a bespoke merchant: “From Taxis to Textiles, Italy Chooses Tradition Over Growth”
“The final thing I’d say about optimism is this. If we took the loopiest, most moonbeam-addled Californian utopian internet bullshit, and held it up against the most cynical, realpolitik-inflected scepticism, the Californian bullshit would still be a better predictor of the future. Which is to say that, if in 1994 you’d wanted to understand what our lives would be like right now, you’d still be better off reading a single copy of Wired magazine published in that year than all of the sceptical literature published ever since.”
– Clay Shirky, from an interview in The Guardian
“When people are bad at math, they know it, because they get the wrong answers on tests. But when people are bad at open-mindedness, they don’t know it. In fact they tend to think the opposite.”
– Ross Hudgens, “76 Powerful Thoughts from Paul Graham”
It occurs to me that “marketing” could start to be much better understood if it was called “applied psychology.”1 (With the relevant outcomes being measurable and ideally repeatable impacts on whatever the organization most values.)
1Microeconomics is the other field of study that I find useful in my work, but adding that to a rebrand would only make things less clear.
“Do you want to build ideas first and foremost?” he recalls Mr. Drucker asking him, trying to capture his mentor’s Austrian accent. “Zen you must not build a big organization, because zen you will end up managing zat organization.”
– Jim Collins, channeling Peter Drucker in a 2009 New York Times profile
“Apple, the maker of iPods, iPhones and iPads, overtook Microsoft, the computer software giant, on Wednesday to become the world’s most valuable technology company.”
– Miguel Helft and Ashlee Vance, “New King of Technology – Apple Overtakes Microsoft”