The Nightmare of Valve’s self-organizing “utopia”

Ong Kar Jin
Oct 27, 2018 · 10 min read

Welcome to Flatland.

Imagine a company where everyone is equal and managers don’t exist. A place where employees sit where they want, choose what to work on and decide each other’s pay. Then, once a year, everyone goes on holiday together.

You have just imagined Valve.

— BBC, Valve: How going boss-free empowered the games-maker

In Edwin Abbott’s 1884 novella Flatland, he describes a two dimensional world lived in by squares, circles and other geometric shapes. Yet for all its flatness, the society of Flatland is deeply hierarchical (the higher the number of sides the higher your status) and resistant to dissent (hostile to the idea of higher dimensions). Indeed, the narrator, A Square, is imprisoned for preaching the existence of three dimensional space.

Ironically, the full arc of Flatland’s plot foreshadowed the ugly reality behind one of the tech world’s most revered workplaces.

Valve is arguably the world’s most powerful gaming company: In 2016, its Steam platform accounted for 38% of all games released and experts believe that it may dominate as much as 80% of all digital distribution of PC games. As a developer, its stable includes classics such as Half Life and Team Fortress 2 while its current roster boasts the incredibly popular Counter Strike and Dota 2. Valve also co-developed the foremost virtual reality headset, the HTC Vive.

Whether it’s in gaming’s past, present, or future, Valve looms large.

Yet for many years, the inner workings of the company were largely unknown. Getting a job at Valve was a gamer’s dream, but the specifics were clouded in internet hearsay — the stuff of urban legend. Deeply secretive, Valve remains a private company to this day.

Then in 2012, the Valve Employee Handbook was leaked. On page four, it proclaims: “Welcome to Flatland”.

The handbook goes on to decry traditional hierarchy and how it “obliterates 99 per cent” of the value innovative people bring. Instead, Valve promotes itself as a completely flat structure where “nobody reports to anybody else”.

Filled with beautiful illustrations and inside jokes, the handbook is a playful and friendly guide to “the greatest professional experience in your life”. Valve sells itself as a figuratively and literally free-wheeling environment where desks have wheels so that you can work with anyone anywhere, where 100% of time is allocated to self-directed projects, where there are “no secret decision-making cabals” because “no matter what project, you’re already invited”.

It’s a deeply seductive re-imagining of the workplace that enraptured the tech world. The former Greek Minister of Finance, Yanis Varoufakis even produced a political economy analysis of Valve’s management system, calling it the “ultimate system of an alternative spontaneous order” — the antithesis to the autocratic structure of the hierarchical corporation:

Whatever the future of Valve turns out like, one thing is for certain — and it so happens that it constitutes the reason why I am personally excited to be part of Valve: The current system of corporate governance is bunk. Capitalist corporations are on the way to certain extinction. Replete with hierarchies that are exceedingly wasteful of human talent and energies, intertwined with toxic finance, co-dependent with political structures that are losing democratic legitimacy fast, a form of post-capitalist, decentralised corporation will, sooner or later, emerge. The eradication of distribution and marginal costs, the capacity of producers to have direct access to billions of customers instantaneously, the advances of open source communities and mentalities, all these fascinating developments are bound to turn the autocratic Soviet-like megaliths of today into curiosities that students of political economy, business studies et al will marvel at in the future, just like school children marvel at dinosaur skeletons at the Natural History museum. I trust that Valve’s organisation will become, if not a central chapter, at the very least an important footnote in this historical turn.

Like the Soviet experiments that were supposed to bring about an unbridled paradise, the reality of Valve falls far from its utopian aspirations.

In July this year, Rich Geldreich, a former Valve employee described the marketing tactics that “self-organizing” companies would resort to:

Rich Geldreich goes on a long series of tweets about the hidden dangers of a “structureless” environment. He’s not the only one — in 2013, another former Valve employee Jeri Ellsworth called the company a “ pseudo-flat structure” where “ a hidden layer of powerful management structure in the company”.

“It felt a lot like high school. There are popular kids that have acquired power in the company, then there’s the trouble makers, and everyone in between.”

A quick glance at the very first page of Glassdoor reviews of Valve confirm this:

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From compiling various accounts, one can begin to paint a picture of real life at Valve:

You join Valve, having been promised excellent benefits, ultimate creative freedom, talented coworkers, and a chance to really focus on your work. You’ve been told all the desks have wheels, but you didn’t expect it to be cramped. Never mind.

One thing that does bother you is how incredibly anxious people seem. Water-cooler conversation is quiet, said in whispers, like someone is plotting. Your colleagues move around in cliques.

You see one dev coding, and my god, he writes incredibly complicated code. You casually ask about it but he very defensively changes the topic and tells you to never sneak up on him like that. “You’re new, you’ll learn. You gotta have insurance.”

You figure out he means that he writes such convoluted code so only he can understand it, so he can’t be fired, nor can anyone else mess with it. Later, you find that he even purposefully introduced bugs into the code, holding the program “ransom”.

After a while, you learn that while everyone is supposed the same…others are more equal than others. You call them “barons”, often those who have been around for a long time, hang out with the corporate arm, and calls the shots at the end of the day. They have “followers” who stick to them to survive.

Turns out, flat simply means the hierarchies hide beneath the surface. To survive you have to take sides or risk being taken down by a rival development team. You learn to code defensively, never reveal vulnerable personal information about yourself to coworkers, never ask for help unless it’s absolutely necessary, and to seek the patronage of a powerful baron.

You thought you got the job on merit. You find out to your dismay that when employees run 100% of the interviews and when the entire compensation structure is geared towards bonuses, employees tend to favour those who won’t pose a threat to their star performer status. After all, in Flatland, everybody is a competitor.

Since it’s about bonuses, you learn to hold back key features on your products, timing the drop just so it’s in bonus season. You don’t want to be forgotten. Oh and about the breezy, let your hair down coworker parties where you can really get to know your colleagues as friends?

Everybody is always working. Crunch crunch crunch. You have a young kid at home so you try to be more balanced. Big mistake. At the end of the year, you’ve been character assassinated so much that you’re fired. Your dream has turned into a nightmare.

But it’s no big deal for Valve.

The company pays well and is so famous that hundreds of new recruits are lined up, only too eager to take your place. The end.

Valve was supposed to be a bold new experiment in the structure of the firm. It was heralded as the logical next step in the evolution of the open office, the cooperative, the startup.

How did it go so wrong?

One answer is partially provided by Varoufakis own assessment of Valve:

There is one important aspect of Valve that I did not focus on: the link between its horizontal management structure and its ‘vertical’ ownership structure. Valve is a private company owned mostly by few individuals. In that sense, it is an enlightened oligarchy: an oligarchy in that it is owned by a few and enlightened in that those few are not using their property rights to boss people around.

But what if the “enlightenment” is nothing more than a Big Lie?

In 1970, American feminist and political scientist Jo Freeman wrote the seminal paper The Tyranny of Structurelessness. She observed that the women’s liberation movement, in fighting the power structures that held women back, turned to supposedly leaderless movements. But to achieve anything of import, inevitably some sort of groupings had to form — bringing with them rules, hierarchy, values of their own. What “structurelessness” had done was to render them hidden:

This means that to strive for a structureless group is as useful, and as deceptive, as to aim at an “objective” news story, “value-free” social science, or a “free” economy. A “laissez faire” group is about as realistic as a “laissez faire” society; the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of “structurelessness” does not prevent the formation of informal structures, only formal ones. Similarly “laissez faire” philosophy did not prevent the economically powerful from establishing control over wages, prices, and distribution of goods; it only prevented the government from doing so. Thus structurelessness becomes a way of masking power, and within the women’s movement is usually most strongly advocated by those who are the most powerful (whether they are conscious of their power or not). As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules. Those who do not know the rules and are not chosen for initiation must remain in confusion, or suffer from paranoid delusions that something is happening of which they are not quite aware.

The feminist activism movement of the 1960s chose to purposefully reject imposed structures because it viewed them as part of the toolkit a patriarchal and misogynistic society used to oppress women. It was thought that by eschewing structure itself, the movement could avoid the hierarchies, and more crucially, the violence (psychological, physical, social) that was passed down by such a system.

Freeman’s analysis of the feminist movement in the 1960s uncannily parallels working conditions at Valve. Interestingly enough, the backbiting and implosion within the organization also parallels the vicious infighting that occured in a similarly “leaderless, flat” movement — Occupy Wall Street.

Famed for protesting against the flagrant abuses of the Wall Street elite, the movement occupied Zucotti Park in New York City, gaining a wide intersection of supporters: from the anarchistic Anonymous hacker group to left wing academics to regular Americans disenfranchised by the 2008 financial crisis. Even early on there were problems with its “we’re all leaders” attitude and consensus based decision making: the protestors once spent more than an hour discussing how to buy fair trade coffee and was plagued with endless meetings on trivial situations.

By 2014, the movement had fractured into rival factions vying for control. At one point, one faction wrested access of Occupy’s Twitter account and promptly declared:

Idealism had devolved into petty arguments over who were the “true founders” of the movement.

Structurelessness can exacerbate asymmetrical information in an organisation, facilitate the formation of cliques, and produce a toxic environment.

This isn’t to say that all “flat” organisations are bad. Many startups have become incredibly successful due to their more flexible structure and by all accounts are friendly, productive, and growth-orientated places to work at. Many Valve veterans remember fondly that in its early days, Valve was such a place.

The challenge lies in scaling up. As a community or company grows, formal structures serve the purpose of clarifying the rules of conduct and criteria of performance when assumed knowledge and access to people becomes more limited. The alternative is chaos, or a gradual growth of elites who exert control through social pressure. Far from magically solving workplace issues, flat organizations and open offices can exacerbate them.

Indeed, in July 2018, Harvard researchers Ethan Bernstein and Stephen Turban studied two Fortune 500 companies making the switch to open office plans. The results were damning: face-to-face time decreased by around 70 percent across the participating employees, productivity had declined, employees found it harder to concentrate and were overall less satisfied with their job.

Yet many companies are diving headlong into flat organization and open offices experiments without truly considering the impact it may have on the health, productivity, and social cohesion of their employees.

Of course, this mad rush is understandable. We live in a cultural moment of deep distrust towards authority, where the old rigid structures have failed us: free markets and the onward march of industrialization were supposed to bring prosperity to the masses, yet inequality has risen across the world; the Arab Spring was supposed to pave the way for a more democratic Middle East but years on the war in Syria is still raging; the Kyoto Protocol promised a reversal of environmental damage yet climate change is taking more lives every year. We blame not just the system, but all systems — we reject the idea of structure itself.

But it’s all the more reason to remember that structurelessness does not denote the absence of rules. Flatness does not inherently bring equality. Doing away with hierarchy is a means to the end of creating a better working relationship, not an end unto itself.

More than 200 years ago, demands for a freer and more equitable society exploded into full scale revolt during the French Revolution. Drunk in the fervour of deposing the monarchy, the French revolutionary Maximilien de Robespierre cried:

“The king must die so that the country can live.”

Beset by economic, social, and organisational problems, idealism quickly gave way to a Reign of Terror where mob justice ruled. In 1794, only two years after his call for the end of monarchy, Robespierre was himself executed by guillotine. Only 10 years later, Napoleon Bonaparte was crowned Emperor of the French.

In our desire to bring down the kings of the workplace, we should be careful not to create new emperors in their stead.


Thoughts, analysis, and ramblings on emerging tech and…

Thanks to Jeamme and Sheau

Ong Kar Jin

Written by

Exploring the world of policy, culture, and politics through the digital.



Thoughts, analysis, and ramblings on emerging tech and media in the developing world.

Ong Kar Jin

Written by

Exploring the world of policy, culture, and politics through the digital.



Thoughts, analysis, and ramblings on emerging tech and media in the developing world.

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