Why aren't there more Valves?

[Libertarian666]

Valve Software has no management hierarchy at all. 

From their employee manual:

Hierarchy is great for maintaining predictability and repeatability. It simplifies planning and makes it easier to control a large group of people from the top down, which is why military organizations rely on it so heavily. But when you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value. We want innovators, and that means maintaining an environment where they’ll flourish.

That’s why Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody “reports to”? anybody else. We do have a founder/president, but even he isn’t your manager. This company is yours to steer—toward opportunities and away from risks. You have the power to green-light projects. You have the power to ship products.

Are there other organizations like Valve? That is, one having 200-500 members, but no management structure?

I also have a simple question, which is not meant to be snarky: If total freedom from external control (i.e. anarchy) is the optimal state for people, as some here contend, why are there not more examples of completely flat organizations like Valve?

(I grant that maybe there are more; I'm not sure how to discover them, though... also, I can't remember how I learned about Valve)

Perhaps the answer is also in their employee manual:

A flat structure removes every organizational barrier between your work and the customer enjoying that work. Every company will tell you that “the customer is boss,”? but here that statement has weight. There’s no red tape stopping you from figuring out for yourself what our customers want, and then giving it to them. If you’re thinking to yourself, “Wow, that sounds like a lot of responsibility,”? you’re right. And that’s why hiring is the single most important thing you will ever do at Valve (see “Hiring ,”? on page 43). Any time you interview a potential hire, you need to ask yourself not only if they’re talented or collaborative but also if they’re capable of literally running this company, because they will be.

My read: such a structure is not for everybody.

1. That is the optimal state for producers.
2. It is not the optimal state for parasites.
3. Producers are focused on production, whereas parasites are focused on parasitism.
4. Producers have a tremendous difficulty understanding the minds of parasites, or in some cases even believing they exist.
5. Thus, producers tend to assume that others are also producers and give them the benefit of the doubt when they can't understand.
6. While parasites also have trouble understanding the minds of producers, they do realize that they are dependent on those producers and thus must keep them chained in order to survive; if the producers ever freed themselves from parasitism, the parasites would die.
7. However, open slavery tends to arouse a lot of resentment among the slaves (in this case, the producers).
8. Therefore, the parasites have spent a lot of effort in making sure that the producers don't realize that they are slaves to the parasites. This involves things like governments, churches, and other organizations that pretend to be for the benefit of "everyone", but of course are of primary benefit to the parasites as methods of control.

If you want a dramatized version of all this, read Atlas Shrugged.

[Pointedstick]

Perhaps the answer is also in their employee manual:

A flat structure removes every organizational barrier between your work and the customer enjoying that work. Every company will tell you that “the customer is boss,”? but here that statement has weight. There’s no red tape stopping you from figuring out for yourself what our customers want, and then giving it to them. If you’re thinking to yourself, “Wow, that sounds like a lot of responsibility,”? you’re right. And that’s why hiring is the single most important thing you will ever do at Valve (see “Hiring ,”? on page 43). Any time you interview a potential hire, you need to ask yourself not only if they’re talented or collaborative but also if they’re capable of literally running this company, because they will be.

My read: such a structure is not for everybody.

Bingo. And the unspoken corollary: it is very important that the gate be firmly closed to those who fall under the "not for everybody" umbrella. A utopia for the elite requires segregation from the proles, to put it crudely.

[Pointedstick]

OK, I get that it's not for everybody, but, based on some things that people here write, I'd guess that such an arrangement would be highly preferred by more than 300 people in the whole country.  So why aren't there more Valves?

Obviously more than 300 people would like it. That's not the question. The question is how many people would actually be well suited for it. I agree with you that this number is likely larger than 300, and probably by many orders of magnitude. I suspect that the reason why there aren't more examples is simply a case of lack of imagination. Most people think that running a business is done a certain way, and it took somebody like Gabe Newell to think outside that box. Eventually more people will catch on, then it will become a meme, then it will become a trend, and then it will become mainstream. At that point, we'll really see the limit of it as two forms of organization are the dominant models: hierarchical and authoritarian organizations for people with little intrinsic motivation, drive, or courage, and flat organizations for everyone else.

That said, this flatter model isn't just limited to Valve. Many to most startup companies have a very flat managerial structure too. And even within many hierarchical firms, people are often given a lot of autonomy despite the on-paper existence of teams and bosses and such.

[Libertarian666]

OK, I get that it's not for everybody, but, based on some things that people here write, I'd guess that such an arrangement would be highly preferred by more than 300 people in the whole country.  So why aren't there more Valves?

There are a lot of single-person companies, which sort of by definition aren't very hierarchical. 

Actually, my previous political rant doesn't apply to private enterprise, where everyone is a volunteer and no one can be parasitized without his consent. I was just feeling particularly cynical at that moment, so please excuse that.

The real answer is that in the free market, most companies need a fair amount of capital to operate, and the people who supply the capital ("capitalists") tend to hire people who will perform duties assigned by the capitalist or by others appointed by the capitalist. Is this necessary in every case? No, but in a lot of cases that's what happens.

[stone]

OK, I get that it's not for everybody, but, based on some things that people here write, I'd guess that such an arrangement would be highly preferred by more than 300 people in the whole country.  So why aren't there more Valves?

There are a lot of single-person companies, which sort of by definition aren't very hierarchical. 

Actually, my previous political rant doesn't apply to private enterprise, where everyone is a volunteer and no one can be parasitized without his consent. I was just feeling particularly cynical at that moment, so please excuse that.

The real answer is that in the free market, most companies need a fair amount of capital to operate, and the people who supply the capital ("capitalists") tend to hire people who will perform duties assigned by the capitalist or by others appointed by the capitalist. Is this necessary in every case? No, but in a lot of cases that's what happens.

I think Libertarian666 has hit the nail on the head. Perhaps a software company is exceptional in that you can make a sale-able product fairly soon with minimal equipment. Compare that to say the biotech start up my other half was employed by. They took nine years to get to the point of having a product -and that was thought a near miracle. The VC funders had to stump up salaries and materials etc for all that time. It is no wonder that the VC funders wanted a close watch over it and I guess that entailed a hierarchy. Something such as a railroad or advanced manufacturing plant would be even more extreme in requiring non-employee capital for funding. I guess if the employees had more financial freedom, then this would be a bit less of an issue as there could be more employee ownership.

Perhaps this might be a way towards that?
http://www.interfluidity.com/v2/5066.html

If ordinary citizens had a small but reliable annuity, too modest to live comfortably but enough to prevent destitution, then at the margin, we’d expect people who currently seek or accept unfulfilling, underpaid work to opt for entrepreneurship, or education, or art, or child-rearing, or just hold out for a better gig. “VC for the people”? would combine a reduction in labor supply with a lot of new labor demand, forcing employers to increase wages and encouraging substitution of capital for the least desirable jobs. Both the wage effect and the annuity itself would increase the share of national income available to those without direct claims on capital, reducing inequality. In his talk, Summers mused (wonderfully) that he’d prefer we not evolve to an economy in which people are employed providing increasingly marginal services to the rich, working as specialized “knee masseurs”? and the like. A straightforward way to preclude that is to ensure that everyone has the means to refuse those jobs and take chances on more meaningful and ultimately more valuable work.

[stone]

I was fascinated though to see something suggesting that perhaps the Valve type organisational structure was the original way for our earliest ancestors.
http://en.wikipedia.org/wiki/Hadza_peop ... _structure

The Hadza are organized into bands, called 'camps' in the literature, of typically 20–30 people, though camps of over a hundred may form during berry season. There is no tribal or other governing hierarchy, and conflict may be resolved by one of the parties voluntarily moving to another camp. The Hadza live in a communal setting and engage in cooperative child rearing, where many individuals (both related and unrelated) provide high quality care for children.[24]

The Hadza move camp for a number of reasons. Conflict is resolved primarily by leaving camp; camps frequently split for this reason. Camps are abandoned when someone falls ill and dies, as illness is associated with the place they fell ill. There is also seasonal migration between dry-season refuges, better hunting grounds while water is more abundant, and areas with large numbers of tubers or berry trees when they are in season. If a man kills a particularly large animal such as a giraffe far from home, a camp will temporarily relocate to the kill site (smaller animals are brought back to the camp). Shelters can be built in a few hours, and most of the possessions owned by an individual can be carried on their backs.

The Hadza are predominantly monogamous, though there is no social enforcement of monogamy.[5] While men and woman value traits such as hard work when evaluating for mates they also value physical attractiveness. In fact, many of their preferences for attractiveness, such as symmetry,[25] averageness[26] and sexually dimorphic voice pitch[27] are similar to preferences found in Western nations.

Because of a Harvard University study, the Hadza people have served as a model for the dawn of modern social networking, on how our ancestors may have formed ties with kin and non-kin based on shared attributes, contributing to the necessary evolution in cooperative processes needed for today's civilizations social groups to thrive.[28]

I guess though such people don't have much military capability so get  swept aside.

[stone]

One thing that has struck me though is that several friends of mine who are obsessive rock climbers, pay a coach to tell them what to do for training. These people are obsessives who have read all of the latest training tips; they climb better than their coaches ever have. I've asked them if the coach tells them stuff they don't already know. The answer is that they apparently get more motivation by being told what to do; it induces them to do what they already know they ought to do. I have to stress that these people are purely doing this activity for their own personal satisfaction. 

So I guess some people like being told what to do even though they are also very self motivated. They are even sufficiently self motivated to pay out to have someone motivate them more.

[Lowe]

Good post, stone.  I tend to think that many people like having superiors, whether at work or elsewhere.  It makes things simple.

[MachineGhost]

Good post, stone.  I tend to think that many people like having superiors, whether at work or elsewhere.  It makes things simple.

I would view it as diversification of labor.  It gets tiring being your own boss all the time, so if you can offload the responsibility, it frees up mental real estate for other stuff.

[Tyler]

I think it says more about Gabe Newell than anything else.

I've worked at a good number of companies and been around a bunch of startups.  Even if most people would prefer a flat structure, most people do not start companies.  And in my experience, the type of person willing to put their reputation and life savings on the line in the face of probable failure to start a new, untested company from scratch (often after failing several times before) is more often than not just a little bit crazy.  Crazy in a good way, but certainly not thinking the same way as the average person he or she hires.  For example, a much larger percentage of CEOs than average are clinical psychopaths.  http://tinyurl.com/nm8yjx3  The same characteristic that makes them immune to failure also makes them immune to input and remorse.  As a result, many companies may claim to be flat  -- no offices, no managers -- but if you challenge the founder you're fired. 

Valve seems like a perfect storm of a good guy with lots of success already under his belt who put his ego aside and hired a bunch of other good brilliant people and mostly focused on keeping the wolves out.  It takes a rare personality and set of circumstances to not only make that work but also make it last.  You sorta need to hire the entire herd at once to establish proper immunity to a lone wolf who would otherwise destroy it from within.