Gabe Newell, the co-founder of Valve Corporation and the driving force behind much of the company's unique philosophy, recently gave an interview to YouTuber Zalkar Saliev, a channel that's more business-focused than games but, hey, this is Gaben. The full interview is yet to surface but a few shorts from the conversation have been released, including one about Newell's daily routine ("get up, work, go scuba diving").
Yeah yeah: easy enough when you're a billionaire with a fleet of superyachts. But the reason Newell is a billionaire with a fleet of superyachts is Valve, or to be more precise Steam: the de facto PC distribution platform that takes a 30% cut on nearly all sales. These days it is of course a very different company from the one that launched Half-Life 2 alongside Steam, but is one of the most spectacularly successful businesses in the world while remaining privately owned: the profit-per-employee makes Apple and Facebook look like lemonade stands.
During the interview with Saliev, Newell is asked what advice he'd give to people starting businesses: fairly boilerplate perhaps, but Newell's answer is essentially to ignore the entire model that Silicon Valley has been built on.
"I see a lot of people that go into situations thinking that what they need is a pitch document to VCs to raise capital," says Newell, "and that's a deeply distracted beginning to an organisation. If you're creating value for people the capital will come your way. Probably at a reduced cost than it would be otherwise.
"Having a big bunch of capital and then saying 'Oh, I guess all those lies we told in our pitch doc, now we have to go and, you know, hire a whole bunch of people to be on this trajectory', I think that's a great way of destroying a bunch of money and wasting a bunch of peoples' time."
And just like that, 99% of tech startups are explained. But it feels more widely applicable too, especially at a time when Microsoft is boasting about being in a stronger position than it's ever been while subjecting its workforce to periodic bloodbaths. Newell's summation will be familiar to any Valve-watcher, but some things do bear repetition.
"The key is to ignore all the distractions around [a business]," says Newell, "and just focus on 'how do we make our customers happier', right? If you listen to your customers and focus on them it's ridiculously easier to build a business. But the focus should always be on your customers, and on your partners, and on your employees. And then everything else will fall into place over time."
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