Valve Corporation's co-founder and memeable internet man Gabe Newell says the entire culture of starting businesses by pitching to venture capitalists first is a good way to waste a whole lot of time, and you're better off, you know, actually providing value for people. Who knew?
The superyacht enthusiast might spend all of his days working and scuba diving, but it's a luxury he's been given after opening one of the most profitable tech giants on the planet. Valve's come a long way since beginning life as the beloved developer of Half-Life and Team Fortress - it's now essentially the Steam Corporation, running the de facto PC storefront that takes a 30% cut on every penny you spend on the platform.
So, Gaben's in a unique position to be dishing out advice to startups, which is exactly what he did in a slightly odd chat with business-forward YouTuber Zalkar Saliev. "I see a lot of people that go into situations thinking that what they need is a pitch document to VCs to raise capital, and that's a deeply distracted beginning to an organisation," says Newell. "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."
"The key is to ignore all the distractions around 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," he adds. "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."
