The Self-Made Man: Gabe Newell

Any readers with a Steam account will be interested in this week’s Self Made Man, Gabe Newell. Gabe is the co-founder and current managing director of the Valve Corporation, the video game development and distribution company responsible for Steam, as well as really awesome games like Half-Life and Portal.

Valve is a company that strives to build community among its customers and user base?Steam is a pretty direct attempt at this?and Gabe seems to understand that the once-static relationship between producer and customer is changing.

In an interview with the Washington Post, Gabe said that ?the Internet has really changed the relationship between customers and product or service providers?the lines are a lot blurrier between who is a customer and who is a creator. It used to be it was pretty easy, right? You make cars, you send them out to some form of indirect distribution, and customers buy them, and you basically never hear from them again. Whereas in our world, sometimes people are producing as much as they are consuming in the experience.?

Smart guy.

Like a lot of people in this line of work, Gabe is an Ivy League dropout (Harvard, in this case) who spent 13 years working for Microsoft, and claims to be a producer on the first three versions of Windows.

Despite his blue-collar loyalty to Microsoft, a company that made him a millionaire, he saw other guys leave to work on video games (namely Michael Abrash, who left to make Quake with id Software), and so he and a friend made the jump, starting Valve in 1996.

Gabe didn’t know a whole lot about the video games business, but he did know a lot about making software, and he knew that entertainment was going to shy away from the traditional sit-and-watch-this model into something more participatory. He also knew that the video game industry would let him know pretty early on if he was any good at it, so he wouldn’t spend years throwing money into something for which he ultimately wasn’t suited. That’s what we call a calculated risk.

Luckily, the success of Half-Life proved that Gabe was suited for video game development after all, and Portal confirmed it. Steam was also a huge innovation, and is basically the iTunes of video games: it updates Valve’s online games automatically, cuts down on piracy, and allows indie game developers to sell their products in the same marketplace as bigger production houses.

Gabe Newell has been a major player at Valve for all of their major successes, which have been guided by his vision, passion, and work ethic. If you’re willing to spend an hour with him, he gave a talk at the Lyndon Baines Johnson School of Public Affairs that’s worth watching.