How do you take a company to a net worth of $12 Billion from ground up?
You connect the dots.
That’s what Gabe Newell did best.
Born in the USA on November 3 1962, Gabe Newell entered Harvard University in 1980. Steve Ballmer hired Newell as Microsoft’s employee #271, after Gabe dropped out of Harvard.
He worked on versions of “Windows” with people, including Bill Gates.
He was getting better everyday.
After working there for 13 years, he and his colleague Mike Harrington left Microsoft to form a joint company, thus laying the foundations of Valve.
PS: Gabe married Lisa Mennet on the same day he founded Valve. That’s like a wonderful wedding date choice (is it though?).
He explained his thought process behind founding Valve as:
My motivation in starting a game company were really grew out of what motivates me professionally. Most of my motivations are social. I really enjoyed working with smart people to build products that have impact on a lot of different people.
Due to the company being just two guys fulfilling a lifetime dream, no one else had any faith in it.
It was nearly impossible to find a publisher willing to distribute their product, especially since Newell and Harrington claimed their game would utilize some very sophisticated technology.
Publishers weren’t confident they would be able to deliver on those promises.
They were so good that people hesitated to believe it.
Finally they met Sierra Online, a publisher planning to release a 3D Action game.
This was only a one-game deal that would allow Sierra to back out if the game didn’t work out.
At E3 1997, the young company announced its game.
With combination of its advanced technologies and immersive atmosphere, Half Life became the most talked about game at the convention.
However, when Half-life was supposed to be released in the Holiday Season; Valve realized that the game was not ready yet, so they had to put the release date back.
Before we jump into laughs and giggles, let’s understand why they are choosing to delay a product that will arguably just make them tons of money, as the way it is.
Gabe explained it wonderfully:
If you asked your typical Valve fan, Valve products are always late right?
Of the resource — quality — schedule stool, we’re always willing to relax schedule first, to make it a higher quality at the expense of everything else.
Our view is that a product is late for a little while but a product will suck forever, if not delayed.
After Half Life’s (and it’s different game modes like Counter Strike) success, there was a need for a container.
Founded in 2003, Steam reached 13 million registered users in 2007 and had 150 games in its library.
“Steam is about creating tools for content creators and customers.”
Today Steam has 150 million monthly active users with over 50.000 products available.
Gabe was trying to make life easier.
He was connecting the dots.
With all the background story aside, now we can focus on the pearls that I talked about in the subtitle.
So here are three exquisite pearls for us from the life of Gabe Newell.
In a Reddit Ask Me Anything, Gabe told us, how he thinks about enhancement of a craft.
“The most important thing you can do is to get into an iteration cycle where you can measure the impact of your work, have a hypothesis about how making changes will affect those variables, and ship changes regularly. “
“It doesn’t even matter that much what the content is — it’s the iteration of hypothesis, changes, and measurement that will make you better at a faster rate than anything else we have seen.”
What is a product ? According to Gabe:
Products are usually the result of an intersection of technology that we think has traction, a group of people who want to work on that, and one of the game properties that feels like a natural playground for that set of technology and design challenges.
With a small number of exceptions, everyone that played a game from Valve, knew that it would be good.
Regardless of its genre.
Or its player base.
When a game/product drops on Steam from Valve themselves, it’s masterful work.
So that was what’s included in the Jewelry Box of Gabe Newell. From my perspective.
All the numbers we’ve seen so far. The money & fame.
They are just natural results of providing a valuable service worldwide.
It just comes with territory.
“Success is inevitable when your customers want you to succeed.”
What do you think about Gabe’s ideas?
Always a pleasure to connect.