Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
October 31, 2014
arrowPress Releases
October 31, 2014
PR Newswire
View All
View All     Submit Event





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


 
When the employees own the company: The soul of Rain
by Peter Wingaard Meldahl on 05/22/14 10:46:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

I, Peter Meldahl, am a game designer and an entrepreneur. My company, Rain, is a small Norwegian developer. At the very end of 2013 Rain released Teslagrad, a game it took 3 years and many peoples combined effort to create.
 

Rain as a company is a bit different form what one would normally expect. We are owned by the people that work here. Not in the sense that the founders own the company, and we are all founders. No. Rain is owned by it's employees, and regular adjustments make sure that it stays that way. Think of the way Valve has created an internal structure where power over what gets done is essentially distributed, and extrapolate that to mean that everyone is also involved on the level of ownership and profits.


When we created Rain we wanted it to primarily be a place of creation. Essentially a framework for our own artistic endeavors. We also wanted it to be a place that lasted. But: Build into the base structure of any commercial company is profit and ownership. We knew several others that had set out with similar goals. Often there would be a number of founders, and shares would be divided equally between them. Then some people would join after a while, and some of the initial founders would fall off. Retaining ownership, but essentially become “Dead Weight” in all other senses.


A few years down the lines and a special hierarchy forms. Founders both currently inside and outside the company at the top, together with a few investors with purely financial motives at the very top, and the core of the actual creation of worth in the company being completely disconnected from controlling their own fate. We did not want this for Rain.


Over the years we have indeed lost half our original founders out of the company. We have also gotten in new talented people that today do some of our very best and most important work. And we're still a young company! In a typical company structure I think this could have been devastating. Instead ownership has moved on to the new initiative in the company.


In the end it is a blend of the Indie spirit of agency and the Norwegian spirit that comes together to motivate us. In Norway charity donations is way less common than for example in the US, instead we come together around charity work, or “Dugnad” as we call it. A group of people come together to create something for the common good, be it an organization, a soup kitchen for the homeless or a neighborhood playground. This is so normal that for every one Norwegian of any age, there is an average of 2 memberships in such groups. This helps us get the mindset where we create something in such a way that might not be the most beneficial for it's creators, but rather shaping it to be the best it can be on it's own terms. In today's capitalistic world this might be a strange thought.


Since we started up, several new Norwegian companies have popped up too. It seems we are as a nation are joining the Scandinavian Indie wave that is already going strong in Sweden and Denmark. Since Rain is already a bit established I have been asked for advice from many of the new start ups, and it warms my heart to see that several of them like our model enough to want to emulate it.


We have come to believe that to retain some ownership in what you create and to have agency over your own fate trough having a voice in the fate of the collective you are part of is in itself a great motivator. For myself it has made the task of juggling the needs of my employees and coworkers against the need of our owners very simple.


I am the CEO of Rain Games, and I have been from the start. I work for the company, and thus ultimately for my own employees. Every year at the general assembly Rain chooses it's own leadership. I am honored that I have so far always been elected to lead the way. For many it would probably seem absurd to create a company from where you could ultimately be fired, and where were that to happen your ownership would also be reduced. But I get to work for the people that truly matter in the company, and I would not want to work for anyone else.


Related Jobs

Giant Sparrow
Giant Sparrow — Playa Vista, California, United States
[10.31.14]

Junior 3D Artist
Giant Sparrow
Giant Sparrow — Playa Vista, California, United States
[10.31.14]

Lead Artist
Sega Networks Inc.
Sega Networks Inc. — Madison, Wisconsin, United States
[10.31.14]

Mobile Game Engineer
Forio
Forio — San Francisco, California, United States
[10.31.14]

Web Application Developer Team Lead






Comments


Lars Doucet
profile image
So basically you're running a worker-owned co-operative?

Peter Wingaard Meldahl
profile image
That's about right.
To a degree.
It actually works quite harmoneously.
I wonder how it scales, and I look forward to find out.

Paul Lenoue
profile image
Could you tell us how you set it up? How it runs? I've been trying to find a way to set up worker-owned game studio that avoids the shares and other problems.

Peter Wingaard Meldahl
profile image
It is still set up as a share based company. All the other models carry the risk that any financial problems would carry over to the owners, a risk you should not take. I answered some other detalis about how shares are distributed further down.

If you want me to be more specific, just ask.

Scott Arnold
profile image
Very interesting.

How specifically do you deal with employees leaving the company? (in terms of reclaiming ownership from them?)

I'm sure Greg Costikyan would also be very interested in how you guys got started, based on his recent article looking to form an indie cooperative movement: http://www.gamasutra.com/blogs/GregCostikyan/20140324/213784/2014
_GDC_Rant_We_Had_a_Good_10_Years_But_the_Walls_are_Closing_In.php

Christian Nutt
profile image
Yep, I sent Greg the link already.

Peter Wingaard Meldahl
profile image
Hi Scott

Well. Every 2 years we create an equal amount of stock. This is sold at the lowest legal price to the emplyees, with everyone having an option on the shares equal to the percentage of the total amount of work they have put into the company since the last emission.
This means that new emplyees get a share, but old ones stay on. Over time their percentage of ownership wil diminish, but never completely dissapear.

Sjors Jansen
profile image
A documentary about socialist companies in Venezuela, perhaps it offers some useful insight:
http://www.azzellini.net/en/filme/5-factories-%E2%80%93-worker-co
ntrol-venezuela

Lars Doucet
profile image
If you're looking for a model of a worker-owned co-operative system, there is no more classic example than Mondragon:

https://en.wikipedia.org/wiki/Mondragon_Corporation

It's also useful to point out the worker-owned co-operatives are not necessarily "Socialist" (ie, there are certainly Socialist co-operatives, but Socialists do not have a monopoly on the idea). Co-ops are just as often aligned with the "third-way" economic philosophy of Distributism, which positions itself as an alternative to *both* Socialism and Capitalism.

https://en.wikipedia.org/wiki/Distributism

Sjors Jansen
profile image
Great stuff. Chavez called it new socialism, which is why I used the term. And to be honest: names.. blah.

Lars Doucet
profile image
Venezuela is pretty much in collapse right now, I have a friend living through the turmoil there and it's an absolute disaster.

This might be a better example:
http://www.thetake.org/

Sjors Jansen
profile image
So um.. are you saying that socialist co-ops do not work? Or is it just a side note?
Best of luck to your friend. I know some of what is happening there.

Lars Doucet
profile image
Not at all, there are many that work great -- including perhaps the one you linked (Your link is broken by the way so I couldn't evaluate it)

I'm just saying given the massive problems Venezuela has right now with inflation, resource shortages, and social unrest (a direct result of Chavez' policies) and state-sponsored violence, if you're trying to speak in support of Socialism, Chavez and Venezuela are the last things you want associated with the term at the moment.

Sjors Jansen
profile image
I politely disagree. There's a lot of misinformation going on. Though I agree Venezuela is getting messed up now. I would argue it's unrelated to the co-op structure itself. The link (which works for me strangely enough, sorry) is to a free movie by a professor who's been studying the stuff. Perhaps you can find it through:
http://www.azzellini.net

I'll check out the take as well, but it's by a journo who puts himself on the cover.. so I'm going in a bit sceptical sorry. ---wait I stand corrected, that's not him. The buy link doesn't work though. I'll dig around.

(Sorry Peter, for derailing this thing with socialism. I applaud your setup.)

Greg Scheel
profile image
Venezuela is under attack from corporate / fascist interests in my country, the good ole US of A. That is why they are in such a terrible state, nothing to do with the basic idea of sharing the produce of nature with all of the citizens. There does seem to be some mismanagement of the social system, but nothing that would cause what is currently taking place.

To put this in perspective, my father saw the P51 Mustang that was strafing Guatemala City in 1954, and one of my former managers confessed that when he was 17, he joined the Special Forces, and was sent down to Guatemala to blow up bridges, radio towers, and to murder politicians. The experience had clearly destroyed his sense of sanity. Same bat time, same bat channel, things are ugly over here.

Amir Ebrahimi
profile image
Peter, can you explain more about what you mean when you said: "Not in the sense that the founders own the company, and we are all founders. No. Rain is owned by it's employees, ..."

Does that mean you still have founders AND employees or that you are simply all employees, each with an individual vote? If that is the case, then I'm not seeing much difference between the distinction there.

Peter Wingaard Meldahl
profile image
Ah.

Some of us are founders.
We have lost some of the founders.
And a lot more have joined after Rain was founded.
As for votes. We vote in the yearly meeting based on stock owned like normal.
Look to the answer above about how we divide stock.

Amir Ebrahimi
profile image
Thanks, Peter. Would you be able to share your current cap table (w/ names removed of course)? I'm just wondering how the percentages actually come out to at this point?

Shaz Yousaf
profile image
Yes, it would be good to hear the details on how this works :) Specifically how you work out what happens as people move on and new people come on board.

Do you assign a % of revenue for each game and that stays the same? So a person who was assigned 20% of a game from years ago always gets that, whether they stay or leave?

And how are costs managed? e.g if you have annual costs for web site and software licenses etc, how does that factor in to any revenue split for people who are no longer around but did work on past projects that are still available to buy.

Peter Wingaard Meldahl
profile image
With Teslagrad we could not pay for all the hours of development, so about half of the earnings from that is owed to the people who worked on it. You get this no matter when the work was done, but it is divided by HOW MUCH work you put in.

After this we plan to simply pay full wages and not have this sort of arrangement. If we would give out profits to shareholders, then THAT would be the way to give back to the employees.

If there are no profits, or we choose to reinvest, then everyone just lives of their wages like normal.

Greg Quinn
profile image
I've always believed in this sort of business model.

Make people a real part of the business, and they will always give 100%, instead of waiting for the next better job offer to come by.

Steffen BaboonLord Kabbelgaard
profile image
Very interesting approach, has some mechanics that are related to our approach as well. Our aim is to make everyone feel as partners rather than employed.
Would be great to exchange advice now and then, will be blogging about our journey:
http://www.baboonlord.com/2014/05/the-quest-for-legendary-company
.html


none
 
Comment: