This does not mean they should be, though some of them are hardware companies too.

Flat works at the small size of GitHub and Valve. But I can't think of a single large company that is flat. Where is the evidence that a flat structure even works at the size of these companies?

Just so the comparison is clear:

Microsoft: 94000 employees [0]

GitHub: 140 [1]

In other words, Microsoft is 670x larger. Or GitHub is 0.15% of MS's size.

[0] http://www.microsoft.com/en-us/news/inside_ms.aspx

[1] http://bits.blogs.nytimes.com/2012/12/28/github-has-big-drea...

Gore & Associates is the major counterexample-flat structure, 9,000 employees: http://en.wikipedia.org/wiki/Gore_and_Associates

You need coordination and guidance at 94,000 people. You can't have it be totally "flat"; I agree. You need some administration and some conceptual structure and hierarchy is the way humans think.

You don't, however, need managerial extortionists who won't let people seek independent credibility, choose their own projects and teams, or collaborate extra-hierarchically.

Google's the one I have the most experience with, and there's some excellent work going on there, but there's no longer a company-wide culture of excellence, and the reason is the injection of traditional HR and managerial behaviors: "calibration score" witch hunts, manager-as-SPOF, stack ranking.

If you're a Real Googler, you're above the fray with regard to a lot of that shit, and you can move to projects as you wish. Hell, Steve Yegge quit his project at Oscon and wasn't fired. He moved to a different project. The culture of excellence that exists at Google is for Real Googlers. If you're a Real Googler, it's an awesome place and you can get some really great work done there. If you're not, you're wasting your time and career. I'm sure it's wonderful if you're already great. It's not the best place for people like me who are good and trying to become great.

Valve is now the cultural leader, and it will be able to scale with open allocation. Why? Because open allocation is a natural fit for technology. I don't think you can grow at 300% per year and retain OA, but I see absolutely no upper limit on the number of people who can coexist in such a regime. What makes scaling hard is the deadline factor: having to grow quickly. It's easy if you can control the pace, which Valve (being privately funded, not a get-big-or-die VC gambit) can.

OA seems the anomaly because we're used to these military-inspired corporate megaliths, but the reality is that closed-allocation is the oddity. A caste of people whose only job is to delegate work? Top-down internal headcount limitations set according to political fights, arbitrated by people who barely understand the day-to-day of the company? Does this sound like an intrinsic necessity, or self-serving parasitism centered around control of the division of labor? I know where I'd put my money on that one.

Open allocation essentially mirrors open source software projects we see in public. I totally agree that open allocation is the way to go. Even software on a company's critical path will attract new people to work on it, mostly to learn and develop new skills. That frees the original super star devs to move on to new projects.

On Google, from http://tech.fortune.cnn.com/2013/01/03/google-larry-page/ (HN thread at http://news.ycombinator.com/item?id=5002483):

"There is no question the once-open Googleplex has become more compartmentalized. Areas where the Google+ and Android teams work suddenly began to require special badges. Page's own suite is on the top floor of the Google+ building."