Roblox’s David Baszucki Built the Biggest Playground on Earth

1. 0:00 – 1:14

   Roblox Origin Story

   1. DSDavid Senra0:00

      [electronic sounds] You just said something interesting right before we started recording.

   2. SPSpeaker0:05

      Yep.

   3. DSDavid Senra0:05

      I asked you how old you were when you started Roblox.

   4. SPSpeaker0:07

      That's right.

   5. DSDavid Senra0:08

      You told me the age, and then you said, "Oh, there's actually an interesting story and a metaphor there." What did you mean by that?

   6. SPSpeaker0:11

      So first off, super interesting story 'cause arguably one could say I started Roblox when I was two years old, 'cause a lot of this shit really fascinates me. But there's an interesting story 'cause before Roblox, I had started a company called Knowledge Revolution, physics enter, you know, educational software, simulator, how to learn physics, very early getting into motion and simulation, and all of that. We were in this very unique position with Knowledge Revolution way back in the early days of the Mac in that we had all of these kids, instead of using it to do their physics experiments, they were, like, starting to build stuff. It was 2D at that time. Um, it was, um, just in the pre-internet time, and so we could see them all trying to build and share their stuff. And so we'd see the, "Oh my gosh, there's gonna be a whole new market here," immersive 3D multiplayer, playing, working, learning, listening to music, all of that stuff.

2. 1:14 – 3:36

   Sabbatical and Intuition

   1. SPSpeaker1:14

      What happened along the way to the founding of Roblox is in that period after Knowledge Revolution, I took a two, two-year sabbatical. In a way, I went a little astray. I started going more lo- almost more logical. Okay, I want to start a company. And I wasn't thinking about just all of the stuff we learned at Knowledge Revolution. So at about a year in, I had a bit of a, it's almost like a vision where I was saying, "Whoa, you can't be logical on this. You have to be intuitive and go back to some of the roots of Knowledge Revolution," which was all about fun and about play and about building something very innovative. So instead of this logical track, me and some several people actually from Knowledge Revolution said, we're gonna do this very unorthodox thing and build this wacky new product, you know, immersive human co-experience, multiplayer, cloud-based, creator-led UGC. Very illogical, very risky.

   2. DSDavid Senra2:20

      It was logical and risky because at the time you were doing this, this is like two thousand and two.

   3. SPSpeaker2:24

      It, it very-

   4. DSDavid Senra2:25

      Two thousand and three.

   5. SPSpeaker2:26

      No one got it back then.

   6. DSDavid Senra2:27

      Yeah.

   7. SPSpeaker2:28

      And no one quite thought of it. We had a business plan slide along the way when we finally raised some angel money that's actually very accurate to today, and it was a little bit, what's the history of storytelling and communication, you know? That, that history of communication was, um, the mail system, voice, texting, maybe video. But in sci-fi, everyone was talking about the holodeck and, you know, that immersive stuff we would see on Star Trek. We actually believed it, and that was part of the idea behind starting Roblox. We thought 3D immersive digital stuff would combine communication, being in the same place with storytelling and the rest. That's kinda how we got our launch. Um, and the, the other cool thing about the launch is we initially thought it was so fun and cool to work on. Even a four-person lifestyle company at that time was very appealing.

   8. DSDavid Senra3:24

      Okay, so four-person lifestyle company, 'cause the first company you started, you didn't raise any outside capital for, correct?

   9. SPSpeaker3:29

      Knowledge Revolution got very far without raising any money.

   10. DSDavid Senra3:32

       And you sold it for what? Twenty million, something like that?

   11. SPSpeaker3:34

       That's exactly right.

   12. DSDavid Senra3:35

       That's when you took the sabbatical.

3. 3:36 – 5:43

   Founder vs CEO Mindset

   1. SPSpeaker3:36

      That's correct.

   2. DSDavid Senra3:36

      Explain to me wh- how you knew that you were being logical instead of following your intuition during this sabbatical. What do you mean by logical?

   3. SPSpeaker3:44

      I think logical goes to what are, what's someone trying to optimize for? Literally, at, at that time, I had been a CEO, and so in a way, I was optimizing for being another CEO and dropping into CEO-ness, when in fact, a lot of the magic of Knowledge Revolution had been about inventing new stuff. And that was actually for some of the early Knowledge Revolution people and myself, that was actually our superpower. It wasn't, like, just that being a CEO thing. So, uh, when I came out of Knowledge Revolution, I actually went and looked at a bunch of CEO jobs that seemed like the logical thing.

   4. DSDavid Senra4:25

      Wait, applying to be a CEO of a company you didn't start?

   5. SPSpeaker4:29

      That's right. What a mistake, right?

   6. DSDavid Senra4:31

      What's your, your distinction between, the difference between a founder and a CEO?

   7. SPSpeaker4:35

      Well, I kind of learned at that time, like, actually, my founder kind of mode from Knowledge Revolution, I couldn't find a position. Obviously, it was a mistake to be looking for that type of thing. That was much more of a founder-

   8. DSDavid Senra4:50

      You're a world builder.

   9. SPSpeaker4:51

      That's right.

   10. DSDavid Senra4:51

       There's no way you're gonna jump into somebody else's world.

   11. SPSpeaker4:53

       What you're describing is literally like a vision I had one night where, like, I was on this path and there was, like, this big barrier there. But this path, which was more world builder creators, was like, boom, I got it, and that's when Roblox started.

   12. DSDavid Senra5:09

       Okay, we gotta pause here because there's, like, almost like a paradox between you. So I had, um, dinner with Ho Nam, who's been one of the earliest investors in Roblox.

   13. SPSpeaker5:18

       Yeah.

   14. DSDavid Senra5:18

       This guy's been telling me about Roblox for, for as long as I've known him. Think he's been involved for, you know, a decade and a half.

   15. SPSpeaker5:22

       Yeah.

   16. DSDavid Senra5:23

       And he's like, "The thing about Dave is if you ask Dave the time, he'll build you a clock." It's one of the most unique descriptions of another human being I've ever heard. So you're known as this really, you know, essentially, like, eccentric genius systems builder. But then I watch your talk at Stanford, and all you're talking about is following your intuition.

4. 5:43 – 7:57

   Building the Clock

   1. SPSpeaker5:43

      That's right.

   2. DSDavid Senra5:43

      Can you reconcile those two things for me?

   3. SPSpeaker5:45

      They're both very valuable. And so I would say that early CEO lesson was definitely a sign of not following my intuitions. It was like, logically, be another CEO rather than follow my intuition and build Roblox. I would say combining intuition with tenacity and taking the long view, if those things can coexist, it's super, super powerful. And I think along the way with, um, Hope, for example, that metaphor of building a clock, it's funny 'cause when we started Roblox, we used to joke, we wanna start a perpetual motion machine. And what is a perpetual motion machine? It's something that can keep going, get better and better. That's what kind of the, the notion of building a cloud three-D UGC system. We keep building that system, creators are gonna make more and more amazing content. We can keep tuning the system, and we'll get kind of that perpetual motion machine. And the metaphor of that clock thing is really interesting because if we dive into that, um, it's harder to build a clock, but if you ask me the time every day for the next twenty years, it's probably easier to build the clock than to tell you the time every day for the next twenty years. And that was part of the thought behind Roblox.

   4. DSDavid Senra7:01

      I was just on stage at an event with my friend Eric, who's the co-founder and CEO of Ramp. When I looked over to my right, I noticed that on the sleeve of Eric's jacket, it said, "We win when our customers win." Ramp is the presenting sponsor of this podcast, and the way that Ramp helps their customers win is by helping you save time, save money, and grow revenue. The median company running on Ramp cuts their expenses by five percent. The median company running on Ramp also grows their revenue by sixteen percent. So when you're running your business on Ramp and your competitors are not, you have a massive competitive advantage that compounds over time. Ramp is the only all-in-one platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp, and you should too. Go to ramp.com today to learn how they can help your business save time, save money, and grow revenue. That is ramp.com. Okay, let's go back to what you were saying. It

5. 7:57 – 8:49

   Lifestyle Startup Phase

   1. DSDavid Senra7:57

      was-- The, the idea behind Roblox, you had the sabbatical, you start Roblox. There's four people. You described it as like a lifestyle business going into that.

   2. SPSpeaker8:04

      It's interesting. I, I think the lifestyle business could be a metaphor for having no expectation and being so excited about the area we were going into. It was like a validation of our intuition. We're gonna go do something enormously both fun and something on our business plan, like it could be really big. But it, it was, at the time, so fun. We-- I think we're thinking we'd be very satisfied if we could work on this for many years. What happened is it got a life of its own, and it, it-- Just the responsibility got bigger. The second we were live, we could see this thing is gonna keep growing.

   3. DSDavid Senra8:46

      What, what was the f- the original product?

6. 8:49 – 15:48

   First Product Failure

   1. SPSpeaker8:49

      There was actually an original product that was an incredible failure. So, a-and the, the original product that was the incredible failure was arguably us knowing... We intuitively knew what the viral product would be. We, we knew the viral product would be online in the cloud, multiplayer, digital stuff, physically simulated, access anywhere, um, user creation, build cool stuff. We kinda knew that. We wanted to get something out sooner. And so what we tried to get out, which luckily was along that trajectory, was something that was more of a single player puzzle builder type game. We, um, we thought, "Oh my gosh, if this puzzle game thing kinda gets viral, that will give us a little bit more runway to build the four Roblox." But as you can imagine, that single player puzzle type game is not quite as fun as multiplayer, immersive three-D with your avatar going with your friends and doing all of these things. So sure enough, within like a couple weeks of that, we're just like, "Yeah, we knew it. It's not going viral." Like, "What are we gonna do?"

   2. DSDavid Senra10:11

      So how'd you get from the single player puzzle game to building platform?

   3. SPSpeaker10:15

      Just deep breath, six more months of engineering, let's go.

   4. DSDavid Senra10:20

      What does the team look like in the six months? Is it still the four people?

   5. SPSpeaker10:23

      Uh, initially, it was just Eric Castlel and myself, and then John and Matt Dusek were just coming on board. So that decision happened when it was two of us.

   6. DSDavid Senra10:32

      And you had raised any money?

   7. SPSpeaker10:34

      Nope. Just having a good time building this thing.

   8. DSDavid Senra10:37

      And funding it yourself.

   9. SPSpeaker10:38

      Yeah.

   10. DSDavid Senra10:39

       You said something i- very interesting. It's like, we started this with no expectations. Say more about that.

   11. SPSpeaker10:43

       After selling Knowledge Revolution and taking my two-year sabbatical, I tried that, you know, that CEO thing when I wasn't using my intuition. Then I came back, and the revelation was almost so big. Just like, "Oh, I could work on invention, fun, and inventing Roblox. What a luxury. That is such a fun luxury. I could do that for my whole life." And so I think, I think that was more coming off of that other linear track, just being so pleased with it. Obviously, the second we started going, a lot of other instincts kicked in, the responsibility, how big can we make this? The, the, the second we saw the perpetual motion machine starting to work, that was really interesting.

   12. DSDavid Senra11:30

       When it was just you, your co-founder, and these two other people, were you using the term perpetual motion machine?

   13. SPSpeaker11:35

       I was using it, yeah.

   14. DSDavid Senra11:36

       Where'd it come from?

   15. SPSpeaker11:37

       Perpetual motion machines in physics are... Even now, if I go on short form video platform, every once in a few months, you can see some crazy mechanical gadget that if you look like-- if you look at itThey'll say, "You know what? The water falls out of here, and that falls out of here, and it's a breakthrough in physics," and the machine will just go forever. Um, that's what a perpetual motion machine is. They're, they've been around for hundreds of years. Obviously, it's physically impossible. You know, thermodynamics, more energy in than out, friction. No perpetual motion machine ever works. But it is, it is kind of this interesting moniker for the notion, are you building a system that will have a life on its own? Will it grow on its own? I think in the, in the context of Roblox, is it something that will organically gather traffic rather than buying traffic? And in that case, the content on Roblox was perpetual. It was made by creators, and the acquisition of users was perpetual in that it was word of mouth.

   16. DSDavid Senra12:44

       You're how old when you started Roblox?

   17. SPSpeaker12:46

       20 years ago, roughly.

   18. DSDavid Senra12:48

       So-

   19. SPSpeaker12:48

       So, like early 40s.

   20. DSDavid Senra12:49

       Very fascinating to me that you're like, "I wanna build a perpetual motion machine."

   21. SPSpeaker12:53

       Yeah.

   22. DSDavid Senra12:53

       Something that has no end, something that carries on forever. Did, did, did you know the next company that you wanna build is gonna be the last company you work on?

   23. SPSpeaker13:00

       I did.

   24. DSDavid Senra13:02

       One of the things that, uh, that Ho Nam told me about you is like he has unbelievable patience and endurance-

   25. SPSpeaker13:06

       Yeah

   26. DSDavid Senra13:06

       ... and he wants to work on something for the rest of his life.

   27. SPSpeaker13:09

       Yeah.

   28. DSDavid Senra13:09

       But you knew that in your early 40s.

   29. SPSpeaker13:10

       I think I actually knew it in my 20s because I think-- And I actually think I knew it e-even very early on, like when I was programming Apple II stuff. For some reason, I intuitively wanted to build world simulations. And, you know-

   30. DSDavid Senra13:24

       Were you playing these games like Civilization and-
7. 15:48 – 17:43

   Buying First Users

   1. SPSpeaker15:48

      Crossroads.

   2. DSDavid Senra15:48

      How are you getting them?

   3. SPSpeaker15:49

      Really interesting. I don't know what entrepreneur I heard this from. They said, "Look, just go buy 50 users a day from Google. Like, that's it. And you can buy them for a buck a, a buck a user." And so we said, "Oh, that's a really good idea. Let's go buy 50 users a day." That was the germination of all of Roblox. If we were able to like reverse engineer the whole social graph tree all the way back to the starting of Roblox, we'd probably see a one-month period, you know, times 50 users, times 30 da- probably see 1,500 users that were, saw some ad, like online building game, come try it out, that are the initial social graph of everyone on Roblox. N-Now in the afternoon, the four of us go online. There's maybe third, 20 or 30 people just hanging out in these games, and we're kind of watching them. We had been making those games with Roblox Studio, which was our creation environment, and we, we were in a rush. When can we publish the full closed loop system? The c- the closed loop system is anyone can download Roblox Studio. You can make an experience. You can push it live. There's a, a page where you can see all of the experiences. You can jump in and start playing that, and that's a, you know, that's a kind of a closed loop perpetual motion machine. So we're, we're just like, "Okay, we gotta get this studio thing out. Like, what's gonna happen? We don't know. I hope someone likes it," blah, blah, blah. We've got about 1,500 users.

   4. DSDavid Senra17:25

      So you go from, you're trying to get them f-from, from being users to creators.

   5. SPSpeaker17:29

      That's right.

   6. DSDavid Senra17:29

      And then a few years later, which I wanna talk to you about 'cause people, I don't think many people know that the size of businesses people are building on top of your platform.

   7. SPSpeaker17:36

      They're big.

   8. DSDavid Senra17:36

      So, yeah, they're, they're massive. Now at this point where we're in the story, you're turning your users into creators.

   9. SPSpeaker17:41

      And it happened very virally.

8. 17:43 – 18:53

   Studio Goes Live

   1. SPSpeaker17:43

      So there, there's a day we were in a little office on Chestnut Street in Menlo Park, the four of us. It's like, "Okay, it's 1:00 in the afternoon. Let's push Roblox Studio live, see what happens." And then probably around 3:00 or 4:00, we started seeing ourWhoa. Someone just published something. Look at that. Look at... Oh, someone published something that other people are playing. Oh, look at that. Oh my gosh, now there's twenty things published, and that has a bunch of people in it. Oh my gosh. And so we went home that night just going, "Okay, closed loop, viral system." Like, these are users now that have way more word of mouth than anything we're buying. This system is growing on its own.

   2. DSDavid Senra18:26

      Why do they have way more word of mouth than anything you're buying? Because they're telling their friends to play the game that they made?

   3. SPSpeaker18:31

      They made a game. The variety of the games, all of a sudden there's a hundred different things. It's not the boring stuff we made. Uh, for the existing users, I'm seeing something new every minute rather than this boring stuff we made three weeks ago. So new content, uh, breadth of imagination, creators bringing friends, all of those just viral.

9. 18:53 – 21:59

   Roblox vs YouTube

   1. DSDavid Senra18:53

      What do you think when people compare Roblox to YouTube?

   2. SPSpeaker18:57

      I think it's, it's interesting. Um, it's a little different, and I, I think-

   3. DSDavid Senra19:02

      Well, your, Roblox is inherently social in a way that YouTube will never be.

   4. SPSpeaker19:06

      I, I think there are-- there's both consumers and creators, but you hit it exactly right. The comparison I would say to YouTube would be a dis-difference between the phone system and reading a magazine. Like reading a magazine on a cloudy day fifty years ago, you can do by yourself. On the phone system on a cloudy day, you call your friends in the, you know, Beaver Cleaver fifties and say, "Hey, what's up?" kind of thing. And so I feel the difference is they're both content platforms. The content in a video platform is typically solo.

   5. DSDavid Senra19:41

      I'm by myself when I watch YouTube.

   6. SPSpeaker19:42

      That's right.

   7. DSDavid Senra19:42

      I don't watch it with other people.

   8. SPSpeaker19:43

      The content in Roblox is really a, a scaffold for communication and being together. We-

   9. DSDavid Senra19:50

      So is this a game platform or is this a social network?

   10. SPSpeaker19:53

       We've actually said, um, we have slides in our early business plan showing two viral loops rather than one viral loop.

   11. DSDavid Senra19:59

       What are the two viral loops?

   12. SPSpeaker20:00

       So in YouTube, there's a bit of a content viral loop. The better the content, the more retentive it is, and they, you know, they, they have very thoughtful ways of everyone finding good content. In Roblox, the viral loop is both the quality of the content as well as the users being with each other. So there's both a content viral loop and a communication connection viral loop.

   13. DSDavid Senra20:22

       I've heard that other platforms, other messaging platforms actually see you guys as a, a big threat. Snapchat is one I've heard because they're-- the user behavior on Roblox is, yeah, I can play games with my friends, but it's actually... Like the, the use case I've seen is they'll come home from school, y-your younger users-

   14. SPSpeaker20:42

       Yeah

   15. DSDavid Senra20:42

       ... and where they-- like when we were kids, we'd like get on our bikes and like go find the other friends.

   16. SPSpeaker20:46

       That's right.

   17. DSDavid Senra20:46

       They get on Roblox, and all their friends are there. But sometimes they're not even playing the games.

   18. SPSpeaker20:50

       Yeah.

   19. DSDavid Senra20:50

       They're just sending messages to each other.

   20. SPSpeaker20:53

       I would say, um, it's interesting what's the utility of messaging, um, even very visual messaging or ephemeral or non-ephemeral messaging versus immersive 3D. And in a way, um, I don't think we think of it in terms of how much time doing this versus how much time doing this. I think there's a natural evolution of a wide range of types of platforms. You know, we've seen natural evolution of text, natural evolution of photo type messaging, natural evolution of short form video, these categories. I think we actually think less about like we're comparing with the time of this activity, and I think we're typically saying how can we increase the quality of this experience. Like our, our niche is immersive 3D co-experience. Um, how can we make it better, better, better? We think it's a naturally emerging niche, and I would say we feel the spec of our product has a long way to go. Like Roblox is a very primitive product relative to what will be possible someday.

10. 21:59 – 25:50

    Beyond Games Vision

    1. DSDavid Senra21:59

       What other co-experiences besides games take place on the platform now?

    2. SPSpeaker22:04

       We have all kinds of organic things popping up. There's arguably, of course, concerts, music. That's starting to get-- We're starting to see more and more of that be done organically rather than ourself, you know. So and I think Bruno Mars showed up on one of Jandel's games without us organizing it. I'd say that's a good sign of pla-- I actually think Bruno was the peak concurrent of music anywhere on any immersive 3D platform, and it was actually within a game. I think we're, um, early signs of shopping, early signs of, who knows? You know, someday older people are gonna go to church on the platform. Uh, older people are gonna work together on the platform. Older people are gonna do other things. I think the natural evolution of a communication platform, um, is what are the ways people use a communication platform.

    3. DSDavid Senra22:56

       One of my all-time favorite quotes is from the book Zero to One. It says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." This is exactly what AppLovin has done with their new advertising platform, Axon. Axon is the most powerful advertising platform in a generation. Axon allows you to capture undivided attention. Axon ads are full-screen videos that are watched for an average of thirty-five seconds, retention that blows other ad platforms out of the water. And you can launch in minutes. You set the goal, and Axon achieves it. No complex setup, no expertise needed. And Axon scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. And most advertisers aren't even thinking about this channel yet. Less than one percent of advertisers have access to Axon, so you want to get started quickly. And you can do that by going to axon.ai/senra. That is axon.ai/senra.I still don't think I understand the total like depth and breadth of your vision. So if, if I come to you, and I don't know anything about Roblox, and you're the systems designer, and I say, "Okay, explain to me what you have built."

    4. SPSpeaker24:20

       Yeah.

    5. DSDavid Senra24:21

       Take as long as you want with this question.

    6. SPSpeaker24:23

       If, if we had to talk super expansively, I would say, look, there's a continuation on the human development of how we communicate. Um, we said earlier, it's a bit like the Holodeck. Right now, the Holodeck that we're building is very primitive. It's not photorealistic yet. You don't go inside of it yet. Um, but you do go into a three-D environment, um, mostly that you could imagine or think about or build. You can go there with your friends and play hide and go seek. You can play a traditional game. You can be in a fashion show, like Dress to Impress. Um, all of the places you go in the Holodeck are made by a creator community. We've, um, incorporated an economy into this system, so the vast majority of people who go do that for free. Um, our creators, though, are very thoughtful and savvy, and they come up with interesting, you know, ways to spend money. So when we go into Dress to Impress and go into a fashion show, there may be something I can buy if I so choose it. Um, and they-- they, in a way, are creators because they have this platform, are able to innovate new types of things that we think of sometimes as games or experiences. You know, it's, it's funny that the top hits on Roblox recently have either been fashion, Dress to Impress or Grow a Garden. You know, it's like, that's pretty cool.

11. 25:50 – 33:55

    Roblox Operating System

    1. DSDavid Senra25:50

       Okay, but explain how you built the world, though.

    2. SPSpeaker25:53

       Behind the scenes, there's a massive amount of technology-

    3. DSDavid Senra25:57

       Mm-hmm

    4. SPSpeaker25:57

       ...in Roblox. Like this is-- To make it seem as transparent and easy as it does, there's a, there's an underlayer we call the Roblox Operating System, which is the company that's then building this Roblox thing. And, um, kind of in line with kind of system thinking, we think of our company as the system. And the company, um, Roblox is really running almost as if it's nine separate companies. W-they are all very well connected. We all get together once a week and connect all these companies together. There is a three-D cloud simulation and tool set company running within Roblox. There is a mini cloud infrastructure company running with forty data centers and hundreds of thousands of computers, all of which-

    5. DSDavid Senra26:50

       Why'd you decide to do that?

    6. SPSpeaker26:52

       We initially-- We just wanted... We were actually pretty naive, and so rather than going down this cloud path, um, I would say right when we were starting Roblox, AWS was just starting to be a thing, and S3 was just starting to be a thing. We, we liked the idea initially of building it our-ourselves. Five years later, I think that's when there's a lot of discussion about this company's all cloud, this company's all build it themselves kind of thing. We, at that point, started to see building infra ourselves as being a cost benefit and a scale benefit. And so I would say our-- we s-- we're great partners with AWS and GCP and others. We do burst into those platforms. But for the-- at the scale we're working and the cost we're working, we do this very efficiently. Like, all of Roblox runs for less than a penny an hour for every person around the world, and that's super critical. Um, but so, so yeah, and we can go in deeper, but Roblox is really nine, nine-

    7. DSDavid Senra27:56

       Let, let, let's go deeper. I wanna go back to the nine companies 'cause-

    8. SPSpeaker27:58

       Yeah

    9. DSDavid Senra27:58

       ...this is stuff-- this is what I meant before we started recording. I was like, "You've got all this crazy shit in your head that I haven't heard in any of the podcasts. We've gotta find a way to get it out."

    10. SPSpeaker28:05

        So we are-- So underneath Roblox, Roblox Operating System, um, it's how we run the company. We have a group of engineers working not on Roblox, but on the Roblox Operating System, um, looking at who are the various teams, how we're organized, how we do all of our things in the company.

    11. DSDavid Senra28:25

        Hold on, back up, back up. You have a team of engineers working on the Roblox Operating System, which is just the operating system on how to run the company-

    12. SPSpeaker28:31

        That's correct

    13. DSDavid Senra28:32

        ...the company building the world.

    14. SPSpeaker28:33

        That's right.

    15. DSDavid Senra28:33

        Okay.

    16. SPSpeaker28:34

        Yeah. 'Cause running the company efficiently is the most powerful way to then build this vision. So, Matt, I, I won't go into the extent we use AI acceleration amongst our creators, but having all of our engineers-

    17. DSDavid Senra28:49

        Why won't you go into it?

    18. SPSpeaker28:50

        Well, I don't wanna say anything non-public, but I would say, like, that is right in line with Roblox Operating System. How does every engineer, product manager, data scientist, designer work in optimal ways? How do, um, how does the leader of an individual group, like that game engine cloud thing, how do they actually operate almost like a mini CEO? How do they, um, run that vertical stack? How do they control, um, the types of engineers and product managers, how they, um, compensate them? That's a really big part of how we run our company. And I, I'd say that the common thread of what we try to do is have as much autonomy on these groups or companies within, and then simultaneously, horizontally, just continuously try to connect it together. So, um, we have lots of groups who can go and do things very quickly on their own, and then we glue them together constantly.

    19. DSDavid Senra29:50

        How did you come to the design of the way you have the company operating?

    20. SPSpeaker29:54

        There was a pivotal moment a long time at Roblox where we were running it as three horizontal stacks. We were running it as the web stack and the infrastructure stack, and what we would see is-You know, if someone's working on a specific feature like the social graph, they would have to go and try to get enough bandwidth out of the web stack and the infra stack and the front-end stack. So there's always a negotiation amongst that, and it was hard to say who is building the social graph. So there was a rotation of that where we said, "No, someone is gonna be in charge of the whole social graph, user-facing components, uh, web component infra," and all of a sudden we got a lot of acceleration because they could load balance between all of those pieces. So that lesson's been with us today, and actually it runs recursively. So within our-- for example, this one group or company I've been talking about, the game engine group, that is subdivided into smaller pieces that also run kind of in that same way.

    21. DSDavid Senra31:03

        But essentially, like you created a series of like primitives?

    22. SPSpeaker31:06

        Yeah, in a way we're like, we, we have primitive system for how we run the company recursively from groups to teams to pods, and we've tried to make that somewhat, you know, an accelerant in how we build the business.

    23. DSDavid Senra31:19

        But the way you think about this, these nine, you think of them as, uh, almost individual companies inside the company?

    24. SPSpeaker31:24

        Uh, we-

    25. DSDavid Senra31:24

        Is that the term you use?

    26. SPSpeaker31:25

        Uh, we call them groups, but the leaders of these groups, we want them to feel that autonomy of as much as possible running a pseudo-autonomous thing that intersects with each other. And, you know, it, it's almost like, yeah, we would have a game engine simulation company talking to a infrastructure cloud computing and storage company. They work with each other. This sits on top of that. But it, it-- we want as much speed and autonomy in each of these groups.

    27. DSDavid Senra31:54

        Say more about how this is organized. This is very fascinating.

    28. SPSpeaker31:56

        Yeah, yeah, yeah. No, we, um, executive staff meeting, um, every Tuesday. We get together four or five hours. Leaders of all these nine companies come together. We go through the things they're working on by themselves, but we go through a lot of times of all of the horizontal things that are bringing them together.

    29. DSDavid Senra32:16

        What do you-- what are the horizontal things bringing them together?

    30. SPSpeaker32:18

        It's funny, but we track at a [laughs] like a ridiculously high level of fidelity even in our executive staff meetings. So we, you know, we have probably fifty to sixty things that are core to hitting, you know, the objectives we have this quarter, next quarter, the rest of the year. It's almost like a hand-curated list at the company level and group level of things that we think are emblematic, uh, as a way of our success. And every week, um, we have all of the key leaders of all of those groups come together, and we just go through all that list of fifty.
12. 33:55 – 36:19

    Nine Companies Inside

    1. SPSpeaker33:55

       time.

    2. DSDavid Senra33:55

       Okay, can you say more about these nine separate companies? I think you just described two of them.

    3. SPSpeaker33:59

       Yeah.

    4. DSDavid Senra33:59

       Or three of them.

    5. SPSpeaker33:59

       We, we publicly talk about all of them. So I, I would say there's, um, um, there's a people systems company that actually builds the Roblox operating system and has all of our recruiting and people and performance management stuff. There's an infrastructure company, and that's running like our forty data centers and all of our compute and bandwidth. Persistence, they're building out cool persistence systems as well. Uh, game engine, simulation tooling, and Roblox Studio sitting in a group or a company. There is a group, um, called the economy group. It's literally all of the things around how we have Robux, how we, uh, monetize, how we, um, you know, collect money, the ledger, all of that. There's a very large group, arguably the largest safety and civility group, engineering, product, policy, and Liveops under a single-threaded leader, Chief Safety Officer Matt, who can just run that whole thing and make decisions. There is a user-facing group that is all involved with social graph, virality, um, the various apps we have for having Roblox run in different places. So it's like a wide range of these user groups.

    6. DSDavid Senra35:15

       Does all-- do all nine of these companies have the single-threaded leader?

    7. SPSpeaker35:20

       Some of them are still matrixed. Um, many of them are single-threaded. We do have some leaders that run-- have engineering under two of them, so it's not absolutely perfect. And some of these, these are better run by maybe a product person than an eng person. But generally, there's one or two leaders for each of these groups that we know exactly who it is.

    8. DSDavid Senra35:41

       Do you think that'll be the case a year from now?

    9. SPSpeaker35:44

       I think so, yeah.

    10. DSDavid Senra35:45

        Okay, so you don't see the need to change that?

    11. SPSpeaker35:47

        No.

    12. DSDavid Senra35:48

        All right, so let's go back. This is very fascinating. Essentially, you're-- you've designed a system-

    13. SPSpeaker35:52

        That's right

    14. DSDavid Senra35:52

        ... which is your company, to design another system, which is the-

    15. SPSpeaker35:54

        That's right

    16. DSDavid Senra35:55

        ... platform that you're building.

    17. SPSpeaker35:56

        That's exactly right.

    18. DSDavid Senra35:57

        I still don't understand the jump. So within like a couple hours-Of letting people start building their own game. So now you're turning users back into creators.

    19. SPSpeaker36:07

        That's right.

    20. DSDavid Senra36:07

        But there's no economy there. There's no Robux.

    21. SPSpeaker36:09

        Pure fun.

    22. DSDavid Senra36:10

        Okay.

    23. SPSpeaker36:10

        Pure fun.

    24. DSDavid Senra36:11

        And you're not-- there's no revenue of the company at the time?

    25. SPSpeaker36:12

        No revenue, pure fun.

    26. DSDavid Senra36:13

        Okay, so what is-- taking back to your decisions, you're seeing this like, "Oh, we're onto something. This is going to work." What's

13. 36:19 – 41:13

    Safety and Monetization

    1. DSDavid Senra36:19

       your next thought?

    2. SPSpeaker36:20

       So then what starts happening is Roblox started a persistently viral mode, um, like we could track the growth day by day, week by week. It's like this is organic growth. This is not paid acquisition. Just like we're sitting back and watching that. We then-- the fun started being there. It's just like ten concurrent, hundred concurrent, thousand concurrent, ten thousand concurrent. Creations are getting better. We know everything we do with Roblox Studio, the better Roblox Studio gets, the more viral it is. The better the game engine is, the more viral it is. Um, very early on, to Erik's credit, I think literally on week three or week four in the afternoon when we're-- now we're sitting there, we know the names of a lot of these people. There's hundreds of people. Erik said, um, "We need to build the first safety moderation system." And, and John and Matt and I all look at it and say, "You're right. He's right. Oh my gosh. Like, we gotta get on this thing." So along the way, we build like a moderation system. We have user reporting, all of that. For a long time, Matt and, um, Erik and John and myself, we were the moderators. Like, we would switch off, so we got to get a vibe of that. And so this keeps marching on, and then, then finally we say, "Okay, how can we start making some money on this thing?" Um, it's growing, we have costs, all of that. Um, interestingly enough, this is another example of we, we had a, a big intuition around virtual economy. We said, "Uh, we can get this out a little faster if we build this club membership thing." Um, the-- at that time, Club Penguin had a club membership. Can we just charge people five bucks a month for something? So we worked on that for a while. And so we had this thing called Builders Club. It was kinda fun. We started monetizing. Exact same thing as when we started. We had this really fun moment where I was on a camping trip and, um, I co- I could check in how many people are buying Builders Club every day. First day it was five, and then it was four, then it was six, then it was three, then it was eight, then it was fifteen. So we're like, "Okay, we're monetizing. This is great." Um, and so, um, Builders Club keeps going. And then for about a year or two, um, 'cause it was working so well, wow, it's just all viral growth. Viral Builders Club is starting to work. Let's just keep working on the system, making it better and better. It was interesting, though, just like in the early days when we started the puzzle game and then said, "Finally, the market has shown us that's not the ultimate system. Let's build what we really believe," something very similar happened with the Builders Club. And we entered this interesting period where user growth was going like this, but re-revenue and bookings was kinda going like this. And so what that meant is Builders Club was getting a little old and stale, and for the wider range of users, it was really not the right thing. And in retrospect, um, it, it's funny 'cause when we started the company, we used taglines like, "You make the game." And that's a really good early tagline. It's aspirational. Everyone's making games on Roblox. It's definitely not the reality of, you know, a billion users. And in a billion users, um, communication for many people would be very important without having to make a game, you know? [chuckles] There's a lot of people that just wanna show up and play something.

    3. DSDavid Senra40:21

       Yeah, I think you-- right now you said you st- uh, last number I saw, you have like, I don't know, a hundred and fifty million daily active users or something.

    4. SPSpeaker40:26

       That's right.

    5. DSDavid Senra40:26

       Hundred and forty-

    6. SPSpeaker40:26

       Roughly, yeah.

    7. DSDavid Senra40:27

       Whatever the, the last public number was. Out of those hundred and fifty, how many are building games? Hundred and fifty million.

    8. SPSpeaker40:32

       I don't know if we give out our latest Roblox studio numbers, but it's definitely a lot of people, but it's, it's not ten million.

    9. DSDavid Senra40:40

       Small percentage.

    10. SPSpeaker40:41

        It's one or two million. And I would say the good news is that vision may actually return because I do think over time with AI acceleration and all of the things we're working on, just like maybe in the very early days of video or YouTube was mostly consumptive, um, there was a little bit of this early consu- you know, creation. And then with short form video, I think we much more... Everyone's starting to make videos. I do think there's that potential for, um, something like Roblox.

    11. DSDavid Senra41:11

        Yeah, especially if they can do it in natural language

14. 41:13 – 45:19

    Robux Economy Loop

    1. DSDavid Senra41:13

       now.

    2. SPSpeaker41:13

       E-exactly. So along the way, um, we kinda had this revelation that while maybe the way recent Builders Club is getting tired is not everyone wants to be a builder. A lot of people just wanna have a, a lot of fun. And so we had had also a big intuitive vision. What would really be cool, another perpetual motion machine, is virtual economy. And, um, people spend money, they buy Robux. If we can allow the creators to figure out all the different ways someone might buy Robux without hurting their experience or making it any less fun, then a small portion of users will buy some Robux. They'll spend it in the game. The creator will accumulate those Robux in their Roblox, Robux bank account. They'll cash them out for real money, and that should create another perpetual motion loop.Interestingly enough, we actually had a lot of board discussions, like, is that a good idea or not? And the, um, the board came around. Like I, I was probably the biggest pusher of it because I believe some people who were hobbyists would then be able to go and earn a living. Like, you could go from hobbyist to earning a living on Roblox, um, if you could do this. So we did that, very similar to the Roblox studio situation. We had a full closed-loop system, and the closed-loop system means I'm a creator, I can make a game or an experience. You can buy something extra for Robux. Could be a flashlight for something. As a user, I can go buy some Robux with a credit card. I can buy that. Um, and also from a discovery standpoint, we started showing top games where people are spending Robux. So same thing, within about an hour or two of going live, oh my gosh, that's the top game where people are spending Roblox or Robux. More people went into that.

    3. DSDavid Senra43:17

       And, and that's gonna scale with user growth in a way that the Builders club would never.

    4. SPSpeaker43:20

       And what we basically hit is an elegant, you know, economy that pretty much scales more than linearly with hours, basically. And what we have found, um, without, you know, still optimizing generally for engagement and retention, not for money, is that developer incentive to balance engagement and money. If, if everyone needs to spend money to have fun, your game isn't viral. Um, so creators have kind of figured that out, and so that's been another perpetual motion machine.

    5. DSDavid Senra43:56

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15. 45:19 – 45:49

    Creator to Entrepreneur

    1. DSDavid Senra45:19

       You launched this second perpetual motion machine, this virtual economy, this currency, a virtual economy, how many years into Roblox?

    2. SPSpeaker45:28

       Very early on. It's gotta be fifteen years ago.

    3. DSDavid Senra45:30

       Okay.

    4. SPSpeaker45:31

       Ten, fifteen.

    5. DSDavid Senra45:31

       So you've been building this economy for fifteen years.

    6. SPSpeaker45:33

       That's right.

    7. DSDavid Senra45:34

       Is there some-- another flywheel where it's like, okay, I was making games for fun. I'm a user. You turn me into a creator. That was all fun. Now, you're turning me from a creator into an entrepreneur. Therefore, now I have-- I make more money. I can also... It has to increase the quality of the games.

    8. SPSpeaker45:48

       Quality's gone up,

16. 45:49 – 49:11

    Chasing Photoreal Concurrency

    1. SPSpeaker45:49

       up, up. I, I would say quality is, um, ultimately gonna be limited not just by the creativity of our developers, but I also feel an interesting thing about Roblox is in the video space, the camera, the display, they're getting pretty refined, like four K camera, four K sixty hertz display. That's a pretty mature technology relative to maybe, you know, black and white movies with no sound a hundred years ago. In the video space, in the video coex-- you know, co-immersion space, we're not there yet. Like, um, we're really excited 'cause there's a lot of technical people at Roblox who... I think the ultimate spec is to video what human co-experience can be, which is huge crowds of people, ten thousand people.

    2. DSDavid Senra46:42

       But realistic.

    3. SPSpeaker46:43

       Uh, photoreal.

    4. DSDavid Senra46:44

       Yeah, because right now the games look shitty. [laughs]

    5. SPSpeaker46:49

       We, we believe we're gonna get to photoreal.

    6. DSDavid Senra46:51

       I, I'm not obviously insulting you.

    7. SPSpeaker46:52

       We believe we're gonna get to photoreal.

    8. DSDavid Senra46:54

       Yeah, but isn't it crazy how far you've gotten? Like, you hit on something about, you know, deep in our nature.

    9. SPSpeaker46:59

       That's right.

    10. DSDavid Senra46:59

        The fact that you, you don't wanna do things alone.

    11. SPSpeaker47:01

        That's right.

    12. DSDavid Senra47:02

        You don't wanna shop alone.

    13. SPSpeaker47:03

        The core-

    14. DSDavid Senra47:03

        You don't play games alone

    15. SPSpeaker47:04

        ... bones of the platform are very interesting, and I think it's, it's almost like, um, you know, Roblox is very sophisticated, very technically complicated, but in a way that's the same traction one would've gotten on that early, you know, black and white movie in a movie hall without any sound and, like, some text between the scenes. So-

    16. DSDavid Senra47:26

        I just, I just saw something. So you-- the fact that you got this far with... 'Cause the, the kids don't care what the game looks like. They just wanna hang out with other people.

    17. SPSpeaker47:33

        We got pretty far with black and white, um, no sound movies.

    18. DSDavid Senra47:37

        But I would-- if I was in your position, I'd feel very confident investing and continuing to reinvest into this platform, given how far you got. Could you imagine how big the platform could be if it's photorealistic?

    19. SPSpeaker47:47

        Um, can you imagine ten thousand simultaneous users photorealistic on a two gig Android device?

    20. DSDavid Senra47:53

        What's the most concurrent users? You said that Bruno Mars was the most you've ever had on the platform or no?

    21. SPSpeaker47:58

        Um, I think there's two types of concurrency. So in Bruno Mars, we're talking twenty million people, um, but those are sharded amongst copies of experiences. When we say the technical goal is, say, ten thousand, that's in a basketball arena. And so running ten thousand concurrent people is really technically complicated. They may be all around the world, um, talk-trying to get together. And so when we say concurrency, it's, it's in the exact same environment where you can see and hear every single person.

    22. DSDavid Senra48:29

        This is why you keep saying that it's a, it's like a little secret that Roblox is actually an infrastructure company.

    23. SPSpeaker48:35

        That's right.

    24. DSDavid Senra48:35

        Okay. You have not yet figured out how to create the technology to go withTo do what you're describing what you want to do, correct? And that's what you're doing every day

    25. SPSpeaker48:43

        I would say part of the job being interesting and fun is I think we have a reasonable idea of how we're gonna get there. And so no timeframe, not saying when Roblox will get ten thousand user photorealistic, all of that, but I think technically we have a reasonable idea of how we're gonna get there. That's kind of exciting

    26. DSDavid Senra49:05

        And very hard to compete with

    27. SPSpeaker49:06

        We run the company in a way, uh, it's interesting.

17. 49:11 – 50:08

    Imaginary Competitor Mindset

    1. SPSpeaker49:11

       I mean, we're in a-- we've been in many crazy times, right? We've been in a PC revolution, the web revolution, mobile revolution, crypto revolution, AI acceleration revolution. We have to run the company almost as if we're imagining a virtual other company who really loves this space. So we have, like, an imaginary competitor. So we, we literally think about running the company that way

    2. DSDavid Senra49:36

       Mike-Michael Dell said this exact same thing on this podcast, um, where, you know, I think five years he s- he stood up, and he's like, "You know, there's a company that's gonna be doing, uh, gonna compete in every single area we're in. Uh, they're going to be doing, doing it faster, better than us. They're gonna be using this technology." And he goes, "And we're gonna be that company."

    3. SPSpeaker49:51

       That's right.

    4. DSDavid Senra49:52

       And he believes in, like, even if you don't have a crisis, you make a crisis

    5. SPSpeaker49:54

       We, we have to s- we have to look over here at that imaginary company and then be that company

    6. DSDavid Senra49:59

       Very similar to how Dell thinks. I just did this episode on Elon, and he said the same thing. He's like, uh, "Even when we're-- it looks like we're gonna win, I always assume that we're losing."

    7. SPSpeaker50:07

       That's right.

    8. DSDavid Senra50:07

       You know, keep that

18. 50:08 – 52:11

    Capital Efficiency Playbook

    1. DSDavid Senra50:08

       mentality. I wanna go back to, like, okay, so you, you stumbled in, now we're a couple years into Roblox's history. Now you have this, this virtual economy. You can see that it's going to scale way better than Builders Club. Ho Nam, again, I wanna read this tweet, uh, because, you know, I've got so much information about you from him. And he says, "In the early days of the journey with Roblox, a next gen Roblox receives five hundred million dollar seed round prior to launch." Company was called Improbable. Ho is kind of a spicy guy, so he was-

    2. SPSpeaker50:36

       Yeah, yeah, yeah

    3. DSDavid Senra50:37

       ... he was aptly named. [laughs] He says, "Roblox used less than ten million dollars of equity to build their business to cash flow breakeven." Is that true?

    4. SPSpeaker50:47

       Yes, it is.

    5. DSDavid Senra50:48

       Okay. And then you reinvested billions in your history of the free cash flow in the coming dec- in the coming decades-

    6. SPSpeaker50:55

       That's right

    7. DSDavid Senra50:55

       ... from a competitor of this vision that you're talking about.

    8. SPSpeaker50:57

       That's right.

    9. DSDavid Senra50:59

       Okay. So, and then his point was five hundred million, that seed round of this competitor that died is nothing over the long run

    10. SPSpeaker51:07

        I think they're still around doing military simulation. I think, um, the reason it was five hundred million, I think that was at the peak of, like, VC Ma-- I think it was Masasan or whatever.

    11. DSDavid Senra51:17

        Oh, God.

    12. SPSpeaker51:18

        And that was just, that's the check you get.

    13. DSDavid Senra51:20

        Yeah.

    14. SPSpeaker51:20

        You know? So sorry, there's no hundred million, there's five hundred million.

    15. DSDavid Senra51:24

        So talk about how you were so efficient. Ten million to get to breakeven.

    16. SPSpeaker51:30

        Yeah.

    17. DSDavid Senra51:30

        How'd you do that?

    18. SPSpeaker51:32

        I think we've always been very good at product management of the surface and always been very good at doing the right minimum viable, you know, r- walk almost through the space so that do less, um, take the long view, know where we're going, uh, get a lot of stuff on the way. I do think we're pretty good at eliminating distractions, so we're, we're kind of going down the right path, and I think we do that pretty well

    19. DSDavid Senra52:07

        What are the, some of the distractions that you avoided or eliminated?

    20. SPSpeaker52:10

        Oh, man.

19. 52:11 – 55:40

    Performance As Growth

    1. SPSpeaker52:11

       Like, there's just, um, it's, it takes a lot of hubris to build platform because I think everyone, it's so fun to build content. Like, we all wanna build games and stuff and big complicated features, and a lot of times, the features our creators need are boring and purely performance-based. And, uh, we, we have a saying in the company like, um, "Perf-performance is a, is a growth feature." And you know, we put an enormous amount of work on raw performance features, scale features, those kind of things. That takes a lot of hubris. So-

    2. DSDavid Senra52:52

       What's a raw performance feature?

    3. SPSpeaker52:54

       We watch, um, how long it takes on a wide range of devices when someone clicks, "I wanna play that experience," to the time till they're interacting. And, um, the, the vision would be video. We've come to assume on, in video, um, in short form video, I can just scroll through, like choo, choo, choo, choo. We're used to that. Gaming has traditionally never had that. Gaming has traditionally, like, you download or you do this.

    4. DSDavid Senra53:26

       Loading screen

    5. SPSpeaker53:27

       You could have, like, this background thing. People love, um, I text you or something, "Let's go try this." Choong. "Okay, we're in." People actually like that without maybe knowing it. So we, we just made the decision, we wanna get the time to jump into any Roblox game down to zero, basically. And that's very technically complicated, um, but we do believe it has long-term growth aspects to us.

    6. DSDavid Senra53:53

       Okay, so you have this engine that is, you're now making money.

    7. SPSpeaker53:57

       Yeah.

    8. DSDavid Senra53:57

       Right? You are staying focused on just building this perpetual motion machine.

    9. SPSpeaker54:01

       That's right.

    10. DSDavid Senra54:02

        So you're not going on these other side quests. And if I'm understanding what you're saying correctly, then if you just limit your investment to things that make the user experience better, that will lead to more, like, money, more user growth, more money, more... Like, you, now you have this other, like, kind of flywheel going on very early.

    11. SPSpeaker54:20

        That's right.

    12. DSDavid Senra54:20

        I'm trying to figure out, basically the, the, the line of my questioning is just like, how the hell did you only burn ten million dollars?

    13. SPSpeaker54:25

        Yeah. We got viral very quickly, and then we started monetizing very quickly

    14. DSDavid Senra54:30

        And then you were just very careful what you used the company money for

    15. SPSpeaker54:33

        That's right. And, and we did ra- We had secondary, we went public. Um, there was a certain amount of financial prudence where, um, I, I think we didn't spend any money, but we al- we always made sure we had enough cash along the way. Um, and so, you know, if we, if we raised a secondary round, we might put some padding in there. But we actually never dipped below that initial ten million

    16. DSDavid Senra54:58

        I heard from Ho and I think other people, like you, you g- you were very careful when raising money. It was almost h- like they had to slowly commit. You kept saying no, no, no, no.

    17. SPSpeaker55:07

        With, with some of the VCs we talked to, we definitely in that sense, I think we did a really good job intuitively connecting with go-long VCs. And we really-- we, we got very fortunate, whether it was, um, Altos or Greylock or Index or others, that i-in a way we got, uh, VCs, I think, who could risk it all, who could, um, n-not like, "Oh my gosh, this is one of my first deals. Like, what are we gonna do?" You know, that could really go along with us, and I think that was

20. 55:40 – 58:36

    Owning The Stack

    1. SPSpeaker55:40

       very helpful.

    2. DSDavid Senra55:41

       So why was it important? What, you were just worried about dilution? Like, what was-- Are you a control freak?

    3. SPSpeaker55:46

       In some areas, probably yes.

    4. DSDavid Senra55:47

       I think you... Yeah. Like, the, the more-

    5. SPSpeaker55:48

       Hopefully in other areas, not.

    6. DSDavid Senra55:50

       No, but you're pretty vertically integrated.

    7. SPSpeaker55:51

       Yeah.

    8. DSDavid Senra55:52

       You like to control everything. Uh, you build its own data centers, your rendering systems, your AI creation tools, uh, you're funded by operating cash flow.

    9. SPSpeaker56:00

       I, I think there's areas of my life where hopefully, like, I've decided not to-

    10. DSDavid Senra56:04

        We're talking about work.

    11. SPSpeaker56:05

        But for Roblox, kno-knowing what we're building, and I, I would say it's not just control. I think it's, in a way, h- owning our destiny in a way. So I would say building data centers is-

    12. DSDavid Senra56:19

        Yeah, but the, the only way you own your destiny is if you maintain control, right?

    13. SPSpeaker56:22

        That would-- Exactly. So data center cost performance, control, yes.

    14. DSDavid Senra56:28

        What other areas of, of the business are you like that with?

    15. SPSpeaker56:30

        Our game engine, for example. We sa-- We, we always imagined we need a multiplayer 3D immersive engine that does ten percent of everything really well. Early on, it's like, "You should use that game engine. You should use that game engine." We said, "No, that's like a critical core part of our whole platform. We have to build that ourselves."

    16. DSDavid Senra56:52

        I think you just like building things.

    17. SPSpeaker56:54

        We do like that too.

    18. DSDavid Senra56:54

        Just like, uh, t-t-to go back to your description, like, "I built an operating system."

    19. SPSpeaker56:57

        That's right.

    20. DSDavid Senra56:58

        Like, "I built the company, and then I built the operating system to operate the company."

    21. SPSpeaker57:01

        Yeah, we do. Yeah, it's interesting 'cause we, um, we're gonna be building some other interesting things that we just decided on.

    22. DSDavid Senra57:07

        Oh, of course. But did you-- do you see where I'm going with this? It's like I wanna tie that natural incli-inclination or propensity you have for-

    23. SPSpeaker57:13

        Yeah

    24. DSDavid Senra57:14

        ... we're gonna call it control for-

    25. SPSpeaker57:16

        Yeah

    26. DSDavid Senra57:16

        ... for the time being, to also being very careful not only how much money you raised, but who you raised it from. Is there a connection there?

    27. SPSpeaker57:23

        There might be like a thought around efficiency, growth, control.

    28. DSDavid Senra57:28

        'Cause you can control your destiny.

    29. SPSpeaker57:29

        That's right.

    30. DSDavid Senra57:30

        Okay.
21. 58:36 – 1:02:32

    Roblox Infrastructure Engine

    1. DSDavid Senra58:37

       Let's go back to this idea that I've heard you say a few times, and I wanna understand more deeply, that the, the dirty little secret of Roblox is that we're actually an infrastructure company.

    2. SPSpeaker58:45

       That's right.

    3. DSDavid Senra58:46

       Okay, explain this.

    4. SPSpeaker58:47

       I mean, running Roblox, um, behind the scenes is very complicated. So when, you know, Grow a Garden hits twenty million people at the same time, there's a lot going on there. That's twenty million people all around the world. They're playing on a phone, a tablet, a computer, iOS, Android, PC, Mac, Xbox, PlayStation, Meta Quest. They are running translated versions of that experience. They are hitting, um, very quickly on Roblox, um, bandwidth. Um, they are connecting to data centers in Poland or in Singapore or in Brazil. Um, they are connecting to our core databases, um, a-as well. And running that is, is very interestingly complex. Running a, um, a 3D simulation cheaply is very complicated. I said a penny an hour. So, um, that is part of why our infrastructure costs are not crazy, is we can do a good job in even some countries that don't monetize very well. So we have core data centers, edge data centers, and it's, um, we're running a lot of our own CPUs and GPUs all around that. That's what allows us to do that.

    5. DSDavid Senra1:00:06

       And you started this from the very beginning of the company?

    6. SPSpeaker1:00:08

       We did, yeah.

    7. DSDavid Senra1:00:10

       Okay.

    8. SPSpeaker1:00:10

       Like, the very beginning of Roblox was running on one giant server that was, like, right over there in my office.

    9. DSDavid Senra1:00:16

       Can you describe what you see as the flywheel of the world that you built?

    10. SPSpeaker1:00:21

        I think the flywheel would be akin to saying what's the flywheel hopefully of the early phone system. Like, way back in that day when AT&T comes out with the phone system, and there's, there's probably some time where only five percent of people in America had a phone. But imagine the virality of going over to your neighbors, see them making a phone call across town. "Oh my gosh, I wanna do that too. Look at that." And so, you know, when we look at the phone system, it, it most likely grew pretty virally. Like, there's some early adopters, they're probably really expensive. Um-But over time, everyone saw that. And so I, I think that's how we see Roblox going a bit. Um, there's a lot of word of mouth. As, as the quality of the experiences grows on the platform, I think we can see correlation in growth there. And so if we can technically support what we ultimately think should be on the platform, I think there's potentially a lot of growth there.

    11. DSDavid Senra1:01:26

        Blake Robbins is a friend of mine. He hangs out on the edge of the internet. He always finds these, like, weird things for me.

    12. SPSpeaker1:01:31

        Mm-hmm.

    13. DSDavid Senra1:01:31

        And he's the biggest Roblox bull that I've ever come across. This is the way he describes it. I'm curious if you agree with this. "More creators brings more games. More games brings more players. More players spend more Robux. More spending attracts more creators."

    14. SPSpeaker1:01:45

        If we're ruthlessly pushing forward the quality of our technology stack, our economy stack, our safety stack. So I would say w- I think what he's saying is, if we walked away from Roblox right now and just kept the lights on, it's possible we would keep growing for a while. But that, at the same time, would be very, very dangerous and something we would never contemplate.

    15. DSDavid Senra1:02:12

        Yeah, the way he described to me is that Roblox is a c- compounding machine with network effects and a fully functioning economy.

    16. SPSpeaker1:02:17

        Yeah, yeah, yeah. We-- I think we would-- we see... We don't know what that full effect is. We'd never claim that we could walk away and all of that. But I do think simultaneously we know what we believe is technically possible, and we're literally racing to build that.

22. 1:02:32 – 1:06:57

    Safety And AI Moat

    1. DSDavid Senra1:02:32

       You mentioned safety a few times. Ho Nam, when we had dinner to prep for this, he said something int- interesting, that you have been-- essentially it's the biggest playground in the world, right? One way-

    2. SPSpeaker1:02:42

       That's right

    3. DSDavid Senra1:02:42

       ...to think about this. Biggest playground in the world. Obviously, it's the safest playground in the world, but it's also huge, so there's gonna be some kind of, you know, issues that, that come up. But he actually was saying, like, the investments you guys have been making for seven, eight, ten years around safety and AI way before anybody else was, you're getting so good at it, it's a- a- it's actually a moat.

    4. SPSpeaker1:03:03

       Um-

    5. DSDavid Senra1:03:03

       Because over time, it's gonna get safer and safer.

    6. SPSpeaker1:03:05

       That's really beautiful that he said that. You know, we, um, we've seen this in self-driving, and we're not gonna claim we're self-driving. But in self-driving, say self-driving ends up being forty times safer than the average human. When there is a self-driving incident in the news, you don't hear that. It's just like, "Ah, self-driving, ah," kind of thing. I do believe, um, w- the, the pressure we get in a good way from the media, from this, from that, is an incredible, um, motivator for that moat. We-- The vast majority of what we've done on safety and civility, we've done on our own, kind of in a visionary way. I'd say age check, we made the call on our own. It's not 'cause of laws or anything like that. But the ultimate moat and the ultimate belief of what is gonna be possible, we're gonna know the age of everyone. We have AI systems watching content, watching communication. We're banding things. We're not sharing images, all of that. It's an enormous opportunity, and I think we, um, more and more, you know, we're starting to say, "Look, we know what the gold standard for safety is. We're building it. We're pretty far along." We're actually starting now to see other companies say, "Oh, maybe we should do what Roblox has done." We're seeing more and more governments say, "We like where you're going with this. Like, this is really cool." So I'm, I'm really optimistic about, you know, having this force of innovation in what we're doing there.

    7. DSDavid Senra1:04:38

       Okay, but is this something that you've been building and compounding since your co-founder?

    8. SPSpeaker1:04:42

       All the way since we built the first moderation system.

    9. DSDavid Senra1:04:45

       Like the first year or two-

    10. SPSpeaker1:04:46

        That's right

    11. DSDavid Senra1:04:46

        ...in, into that, okay.

    12. SPSpeaker1:04:47

        That's right.

    13. DSDavid Senra1:04:48

        Explain what, like-- Can you-- I don't know if you can talk about this publicly. Like, what have you built to make it so safe?

    14. SPSpeaker1:04:54

        I, I, I think we have seen AI is more consistent, uh, over time and scales more than humans. And so the ability to run every asset, everything on the platform through AI, all content, image, everything everyone's building, everything everyone's saying, it just get better and better and better at that. It's just been an enormous thing. And, and so when we... You know, the part of AI is, is very much the human-facing thing. Like, "Oh, I've, I've got an AI prompt," or, "I can do all of that." Behind the scenes, though, at Roblox for many, many years, we were pushing very early AI, BERT models, primitive type models to drive safety. So, so I, I do believe it's a moat, and I, I do believe we've done something very unique in that, um, what's going on out there right now is we're very upfront. Like, we do have people under thirteen on our platform. It's an enormous responsibility. We focus on, once again, all of the a- aspects of how they play and learn and do things. But that's very different than being some other platform that says, "Oh, yeah, it's okay. No one's under thirteen. We're good." And so I, I do think long-term leaning in and being part of that is an enormous capability.

    15. DSDavid Senra1:06:14

        Something came to mind when you said, you know, now other companies are looking at what we've done in this, and they're like, "Hey, I want some of that too." Would you ever sell this kind of technology to other companies?

    16. SPSpeaker1:06:22

        I think it's worth thinking about. Like, like, I believe we will end up with the best, um, AI tech for text, for voice, maybe for video, doing a wide range of safety things, either monitoring for critical harms, flagging, adjusting, all of that. It's not unreasonable to think we might do that. We've already started open sourcing some of our stuff. So there's a consortium actually with some various companies involved in safety. We've open sourced, um, one of our voice models. We've open sourced one of our sentinel models. So we are starting to go in a way down that

23. 1:06:57 – 1:11:31

    Data Ethics And NPC Testing

    1. SPSpeaker1:06:57

       path.

    2. DSDavid Senra1:06:58

       So the majority of the revenue that Roblox makes now just comes from this platform, this virtual economy, this world you've built, correct?

    3. SPSpeaker1:07:05

       That's right.

    4. DSDavid Senra1:07:05

       But you have to have a million of these giant model companies coming and wanting toTrain their data because you have four-- twelve, fourteen billion. What, what's the hours a month?

    5. SPSpeaker1:07:16

       It makes it so simple, right? Like we're-

    6. DSDavid Senra1:07:19

       How many hours of-

    7. SPSpeaker1:07:20

       Thirteen billion plus a month.

    8. DSDavid Senra1:07:21

       So thirteen billion of actual people interacting. Like, what does this data set look like?

    9. SPSpeaker1:07:28

       So there's a lot of, um, data sets out there that are video coupled with ASDW. You know, it's just like a human interaction model. What's cool is because we're running this three-D simulator, and we're running it on our own cloud, and all of the experiences and games are running somewhat on the same simulator, we have really interesting data. We have three-D location of everything. We have, um, how people are trying to move around with their avatar. We have, um, obviously what they're texting and typing in a privacy safe way. Um, but what's, what's fun about it is we would, of course, never sell that data.

    10. DSDavid Senra1:08:08

        That's what I was gonna ask.

    11. SPSpeaker1:08:09

        Never, ever, ever, ever. For several reasons. One is, um, just from a values thing of respecting the community. Can you imagine, [chuckles] like, what kind of whacked-out decision that would be?

    12. DSDavid Senra1:08:21

        Yeah.

    13. SPSpeaker1:08:21

        "Roblox is selling their three-D user data." We would never do that. Um, also, I believe over time that this data is gonna be very interesting data to... For example, imagine a future where a creator wants to make a really beautiful Roblox game and have a bunch of agents working all night long, iterative Wiggum's loops, recoding, testing, recoding, testing. Imagine just like we do with code now, a creator wanted to do their whole game that way. So-

    14. DSDavid Senra1:08:53

        So wait, go back to you guys are buying fifty users a day from Google. Now, if you're building a, a game on your platform, you can actually use real, like, the, the data from actual users on Roblox to test what you're building?

    15. SPSpeaker1:09:08

        There's a level of indirection there. I would say the-

    16. DSDavid Senra1:09:10

        What's the indirection?

    17. SPSpeaker1:09:11

        The level of indirection is making amazing NPCs that look and behave and act like humans by training on that data for our users. So what we'd like to be able is you're building your cool experience, you want ten thousand virtual testers, you want to describe how they act, what they do, and put those into your experience and use that to test overnight.

    18. DSDavid Senra1:09:36

        I like that idea a lot. That's very interesting. The-- your stock seems to be, like, all over the place sometimes. Why do you think... Like, you have these, these huge Roblox bulls, or it's just like this is a compounding machine. And then what do you think is, like, most misunderstood about what you're building? Why wouldn't this keep getting bigger and more valuable in the future?

    19. SPSpeaker1:09:54

        I feel like I can't predict the stock market.

    20. DSDavid Senra1:09:59

        No, I don't... Yeah, okay, okay.

    21. SPSpeaker1:10:00

        And, and I think, though, I think ultimately, you know, it's showing... I think the future for many companies is like we're in a time right now where raw user growth and engagement growth is mixing with a lot of factors. I think, um, technical excellence, continued innovation, having people understanding where we're going with this. I mean, there's just gonna be more and more of that, so I'm optimistic.

    22. DSDavid Senra1:10:26

        And you see AI as a giant tailwind for you guys.

    23. SPSpeaker1:10:31

        It's an interesting time, right? Like, it's a really interesting time. People are questioning all types of different types of companies, what companies are gonna grow twice as fast, what companies are gonna... This happened. For us, it's so many areas. It's not just making games better and faster. It's increasing quality, time to market of experiences. And I do think ultimately AI will power some of what we've said around our ultimate spec.

    24. DSDavid Senra1:10:58

        Are there completely AI-generated games already on the platform?

    25. SPSpeaker1:11:02

        I would say we're getting close. And I'd say, um, right now, Roblox Studio is starting to embed a pile of AI-capable type functionality. The beauty, though, that we have all of our Roblox cloud open to MCP server and all of that stuff, w- now we're just seeing devs, like, push at this with AI coding tools and creator tools and, like, start to create that flywheel.

    26. DSDavid Senra1:11:25

        And these are-- these can be relatively small teams, even individuals that make wildly popular games, correct?

    27. SPSpeaker1:11:30

        Absolutely.

24. 1:11:31 – 1:16:08

    Creator Earnings Explosion

    1. SPSpeaker1:11:31

       Absolutely.

    2. DSDavid Senra1:11:31

       So let's get... Something I, I don't even know how long it's taken me-- why it's taken me so long to get into this part, 'cause this is the part I'm actually most fascinated with-

    3. SPSpeaker1:11:36

       Yeah, yeah

    4. DSDavid Senra1:11:36

       ... is the size of the businesses that people are building on the platform.

    5. SPSpeaker1:11:40

       I mean, DevX is well over a billion bucks a year. You know, that's the amount-

    6. DSDavid Senra1:11:44

       Explain to people what DevX is.

    7. SPSpeaker1:11:45

       And that's the amount of raw money flowing to creators on the platform. Um, it's, it's really been... I'd say it's a really interesting time because in the midst of AI, throughout the game industry as a whole, there's been a lot of, you know, maybe logic- legitimate concern about a lot of creative people of having AI displace what they do. The thing we've said is we believe that money flowing to creators is going to increase, not decrease. And so that's pretty good news. If that money flowing to the Roblox creative community is increasing, we should see even more opportunity for creators. Um, we, we've also seen something really interesting. You know, top creators on Roblox are making tens and twenties and fifties of millions of dollars. Like, these are pretty serious-

    8. DSDavid Senra1:12:36

       I heard some of them are making that a month.

    9. SPSpeaker1:12:38

       Uh, I don't... I can't say that, but I would say they're making-

    10. DSDavid Senra1:12:41

        They say that.

    11. SPSpeaker1:12:41

        [laughs] Okay.

    12. DSDavid Senra1:12:42

        I don't know if it's true, but I heard three kids in the middle of nowhere making twenty-five million dollars a month.

    13. SPSpeaker1:12:46

        I won't confirm or deny, but I, I would say, like, one thing when you hear that as, as a measure of platform health is if we look at the year-on-year growth rate of creator one, ten, a hundred, and a thousand, creator a thousand year on year is consistently growing faster than creator number one.

    14. DSDavid Senra1:13:05

        Wait, say that again.

    15. SPSpeaker1:13:05

        The curve is even flattening more. Um, the growth rate in bookings per year for creator number a thousand, um, ranked by how much they're making, they are growing faster than creator number one.

    16. DSDavid Senra1:13:19

        How?

    17. SPSpeaker1:13:20

        Curve is flattening, wider, um, use around the world, more opportunity for vertical content, uh, more opportunity for some content for older people. So that is a, a flattening of the curve which bodes well for creator a thousand.

    18. DSDavid Senra1:13:34

        What does the long tail look like at the very end? They're making a couple hundred bucks a month?

    19. SPSpeaker1:13:38

        Uh, yeah.

    20. DSDavid Senra1:13:38

        Like, what is that? Like ten dollars a month?

    21. SPSpeaker1:13:39

        I think the top thousand is on average making a million bucks.

    22. DSDavid Senra1:13:42

        I heard it's higher than that.

    23. SPSpeaker1:13:43

        Okay.

    24. DSDavid Senra1:13:43

        I think it's like one point three million.

    25. SPSpeaker1:13:45

        O-okay. And then I think as we go beyond though, that curve goes way out to creator ten thousand beyond, where there's significant money being made out on that part of the curve.

    26. DSDavid Senra1:13:55

        Do you see a world... Do you think about how, like, in the last, like, decade and a half, you know, like, when you ask people what they wanted to be when they grow up, like, the, the YouTuber wasn't even on there, you know, fifteen years ago.

    27. SPSpeaker1:14:06

        Yeah.

    28. DSDavid Senra1:14:06

        Now, it's, like, always in the top, you know, five or three or whatever the case is. If you do have this perpetual motion machine, you keep going, and I think once people understand the size of the business that they could build on this, and they have a love for what they're doing, you know, you're usually only really great if you actually love it. Like, I think being a Roblox creator would-- could displace being a YouTube creator.

    29. SPSpeaker1:14:24

        Who knows? I do-

    30. DSDavid Senra1:14:26

        Why'd you make that noise? There's-
25. 1:16:08 – 1:20:01

    Marketplace And Transparency

    1. DSDavid Senra1:16:08

       Do you have funds coming in and trying to buy up these games and, like, rolling them up?

    2. SPSpeaker1:16:13

       There is a market out there. I think if anything, we're trying to get the message out to our creators. Like, our DevRel team can help you assess what your game might actually be worth, 'cause a lot of them are worth a lot of money.

    3. DSDavid Senra1:16:27

       Platform itself has never tried to buy any of them?

    4. SPSpeaker1:16:30

       We never have. I think what we want, though, is some transparency in the market. So, you know, early creators can actually know what kind of a gem they're sitting on.

    5. DSDavid Senra1:16:39

       Have you seen people being taken advantage of?

    6. SPSpeaker1:16:42

       Not really. I've seen, like, amazing actually profit sharing, revenue sharing, like, things that have really worked out for buyer and whatever. But I do think over time we want there to be a lot of kind of transparency in that.

    7. DSDavid Senra1:16:57

       It's almost like you've built a game to play entrepreneur, and you turn them into real entrepreneurs.

    8. SPSpeaker1:17:01

       I-in a sense, it's an entrepreneur game.

    9. DSDavid Senra1:17:02

       Yeah, if I-

    10. SPSpeaker1:17:03

        That's right

    11. DSDavid Senra1:17:03

        ...if I wanted to teach like a, uh, you know, a ninth grader about, you know, entrepreneurship, like, Roblox might be the best place to start.

    12. SPSpeaker1:17:11

        You could literally, um, teach them how to use AI coding tools, come up with a crazy idea, get it live, um, on Roblox now. They could buy traffic. They could spend fifty dollars, um, same thing, buy users on Roblox, that whole cycle.

    13. DSDavid Senra1:17:28

        Yeah, I'd be very interested in that because when I talked to Toby Lutke, the founder of Shopify, um, he said something interesting. Like, he thought hi- you know, his job is to create more entrepreneurs. Like, that's the way he looks at what he's doing.

    14. SPSpeaker1:17:37

        I, I think that's right. I think that's right.

    15. DSDavid Senra1:17:38

        Yeah, I think it's more important than ever, especially with young people. If you look at, like-

    16. SPSpeaker1:17:41

        That's right

    17. DSDavid Senra1:17:41

        ...their empathy or their, like, uh... They're way more attracted to, like, socialistic ideas, you know, than, than I think, like, your generation was and definitely my generation was, especially in, you know, in America.

    18. SPSpeaker1:17:51

        It would be fun to imagine an entrepreneurship class that kind of connected all the dots. I build this, do this, can see this happening. That could be super educational.

    19. DSDavid Senra1:18:01

        What's your biggest threat to-- that would inhibit you from building what you wanna build? Like, what you're describing, this, this long-term-

    20. SPSpeaker1:18:10

        I, I actually, I actually feel the biggest threat would be not imagining that competitive company and not building what we think that competitive company is. So the biggest threat could be complacency rather than we can see what's technically possible, l-let's build that.

    21. DSDavid Senra1:18:30

        How often does this imaginary company come up inside the discussions you're having in your real company?

    22. SPSpeaker1:18:35

        Now and then, I would say given the speed at which we think some stuff's happening. Actually [chuckles] it's interesting, the whole history of the company has arguably been a motion from quarterly things, monthly, weekly, daily. Like, the whole pace of our company, I think, has just been a historical acceleration of the pacing of the company.

    23. DSDavid Senra1:18:59

        The pacing at which you move?

    24. SPSpeaker1:19:00

        Pacing at which we make decisions, um, pacing at, at which we gently adjust without, like, swinging the tiller widely. The, the speed at which we check, um, in, the speed at which we track things, it's gotten faster over time.

    25. DSDavid Senra1:19:16

        So the way I would think about what you've been telling me is you have this excessively long view.

    26. SPSpeaker1:19:21

        Yeah.

    27. DSDavid Senra1:19:21

        The fact that twenty, almost twenty-five years ago, you're like-

    28. SPSpeaker1:19:23

        That's actually one of our values, take the long view.

    29. DSDavid Senra1:19:26

        Okay. Well-So twenty-five years ago, twenty years ago, like this is gonna be the last company that I'm gonna work on. Uh, so therefore, you even said, I think early in the conversation, it's thirty, forty, fifty-year kind of view.

    30. SPSpeaker1:19:37

        Yeah.
26. 1:20:01 – 1:24:43

    Near Death Lessons

    1. DSDavid Senra1:20:01

       So something we haven't talked about, but I think I heard you speak, uh, I think this you said this in your Stanford talk, which I thought was interesting, that there was multiple like near-death experiences or almost death experiences at Roblox. We haven't talked about that at all.

    2. SPSpeaker1:20:13

       There were several. I, I think, um, one was the economy thing. Like, if we had not figured that out, that would have been very dicey.

    3. DSDavid Senra1:20:21

       Looking back now, I mean, you were obsessed with science fiction. There were all these other like virtual economies, right? At the time-

    4. SPSpeaker1:20:26

       There were. Second Life.

    5. DSDavid Senra1:20:28

       Second Life.

    6. SPSpeaker1:20:28

       There.com.

    7. DSDavid Senra1:20:29

       Yeah.

    8. SPSpeaker1:20:30

       All of that stuff.

    9. DSDavid Senra1:20:31

       So were you taking ideas from that as well?

    10. SPSpeaker1:20:33

        There.com and Second Life, they really were early and in parallel to us. In a way, they were so early and so parallel, they made these very big visionary things. You know, Second Life's architecture was contiguous earth kinda thing, which had some issues around scaling because in a contiguous earth type situation, which is just the way the real world makes, there's only one copy of [chuckles] that roller coaster, and when thirty people wanna go on that roller coaster, no more can go. So we-- I think we were a lot more practical around scale. We're just like, "No, man. If there's, if there's a hundred thousand copies of that roller coaster, we're gonna figure out how to route people to that, so we could have ten million people riding the roller coaster." But there were a lot of early, early visions out there, I would say, at the same time, for sure.

    11. DSDavid Senra1:21:26

        What was the argument from the, the, the opposing board members to, to doing the economy?

    12. SPSpeaker1:21:30

        We had a lot of fun going on the platform. Like, we were just like, "Whoa, everyone's having fun building, you know, this viral stuff. Would we distort it if people could make money?" And but the idea, the idea that, look, in the traditional game market, you have studios with hundreds of people. Like, we could probably get better quality if we nudged in that direction. Other near-death or rough things is our economy got hacked once, so we had to like shut down the whole economy for two days, literally. That was somewhat scary, and the reason is we'd just been so early, moving so fast that our-- the way our economy was working right now wasn't like double-entry bookkeeping and journaling and all of that, and we had no flow control anywhere in the economy. So this was a famous economy hack very early in the days of Roblox, where the second the economy was hacked, money could bounce from place to place very quickly. We caught it pretty quickly, and we just said, "Shut everything down." We had to shut Roblox down for a while, then bring it back up without the economy on. Luckily, we caught it pretty quickly, and only, you know, a small portion of the money had moved around. But we had to run for several days with no economic activity.

    13. DSDavid Senra1:22:48

        Were you already a public company when this was happening?

    14. SPSpeaker1:22:50

        No.

    15. DSDavid Senra1:22:50

        Okay.

    16. SPSpeaker1:22:50

        No. Whoa. No, no, no.

    17. DSDavid Senra1:22:52

        [laughs]

    18. SPSpeaker1:22:52

        Like the SC-- The SEC does some really good stuff, and I would say some of the good stuff, if we go through a lot of the controls in the SEC, those were things we did fifteen years ago, you know, as far as this economy and backups and all of that.

    19. DSDavid Senra1:23:07

        When you were designing this, were there any like books you were reading or like were there any examples? So you're like, "Okay, I'm gonna take an economy that I see functioning well in the real world and just make the virtual version." How did you even come up with the set of rules that you had?

    20. SPSpeaker1:23:19

        We-- I would say all four of us founders were very into high-integrity systems, um, like what's the amount of float in the economy, how much currency we have. Do you trade it and not trade it? We saw very early on in our economy, we had something really interesting. In the early days of video games, people would have multiple currencies, and we had something that in retrospect the Roblox community really loves but isn't really a good idea, I don't think, and that is a, a participation-based currency called Tickets, as well as a money-backed currency called Robux. We-- The, the thing that comes out is when you have a participation-based cur- uh, currency, you get one ticket for every day you log in. That's really not a very good way to have people [chuckles] log into your system, you know? It's much better. They just love chatting with their friends or playing games. The other thing is any currency that, um, a user can get from work or log in will immediately be botted now. And so we just-- we could see people trying to bot that currency all day long, and we had to ultimately get rid of it. Um, so we had some good learnings with that. But ultimately, our current economy, it has a, you know, as I've said, is kind of scaled better than linear with user engagement.

27. 1:24:43 – 1:25:35

    Ads And Creator Discovery

    1. DSDavid Senra1:24:44

       You mentioned there's an advertising business inside of Roblox.

    2. SPSpeaker1:24:46

       That's right.

    3. DSDavid Senra1:24:46

       How long has that been going on?

    4. SPSpeaker1:24:47

       It's just started, pretty recent. But if you go onto the Roblox homepage, you can see some of the experiences say "Sponsored" right now. We have a long-term vision of what percent that is, but it's actually really helpful because, um, most of our discovery, primarily organic, we've been very transparent with discovery. Um, and so one of the things that Roblox creators like is we share all of the signals of what's boosting something. It's almost as if we were YouTube or TikTok or Reels saying, "Here's all the factors that, you know, bringing you up here." But for some creators who wanna do that entrepreneurial experience, buy fifty users, um, very early, their game isn't viral yet, they can use that sponsored thing just like when we bought traffic from Google.

28. 1:25:35 – 1:27:45

    Closing Reflections

    1. DSDavid Senra1:25:35

       I got one more question for you.

    2. SPSpeaker1:25:36

       Okay.

    3. DSDavid Senra1:25:37

       We're almost out of time.

    4. SPSpeaker1:25:37

       Yeah.

    5. DSDavid Senra1:25:38

       Out of time. Are you jumping up? You wanna leave already? [laughs]

    6. SPSpeaker1:25:40

       No, I'm stretching-

    7. DSDavid Senra1:25:41

       Okay.

    8. SPSpeaker1:25:41

       'Cause I wanna give an expansive answer.

    9. DSDavid Senra1:25:44

       Um, why do things like this? Why are you doing podcasts?

    10. SPSpeaker1:25:47

        I, I do feel there's a lot of depth to the way we run the company, that podcast is the format to get it out, and, um, I love podcasts. Um, in today's media, if I know who the podcast is, like, that's all I need to find great content. I like podcasts 'cause it's, it's typically not edited. It's not showing up in a discovery mechanism, so, so I feel it's one of the truest forms of media.

    11. DSDavid Senra1:26:18

        Okay. I'm glad you used the word depth 'cause what I wanna do, since we're out of time now, I wanna run this back, like, as much as you want, maybe every six months or something like that.

    12. SPSpeaker1:26:25

        Yeah, yeah, yeah.

    13. DSDavid Senra1:26:25

        Because I do these selfishly. Like, I'm obsessed-

    14. SPSpeaker1:26:28

        Yeah

    15. DSDavid Senra1:26:28

        ... with making podcasts, but, like, I'm obsessed with entrepreneurs, and I wanna know, like, uh, something Toby Luces said to me that I thought was fascinating. He's just like, "There's not, like, one right way to do something at a company."

    16. SPSpeaker1:26:37

        No.

    17. DSDavid Senra1:26:37

        "There's probably, like, 100 right ways."

    18. SPSpeaker1:26:38

        That's right.

    19. DSDavid Senra1:26:38

        And you have to figure out, like, what makes sense for the context you're in, and then who you are as the founder, and, like, what you're trying to accomplish. And I have a better understanding of you, way better understanding than when we started the conversation-

    20. SPSpeaker1:26:50

        Yeah

    21. DSDavid Senra1:26:50

        ... even though I've listened to every single interview you've done. Your company's very misunderstood, and there's not a lot about you as a person, and yet I find these people that I respect their opinion very much, and I'm like, "This guy is special, and the way he's building his company is interesting." And I'm still... I feel like I just, like, scratched the surface.

    22. SPSpeaker1:27:04

        I'll take that as a compliment.

    23. DSDavid Senra1:27:06

        You should take it as a compliment.

    24. SPSpeaker1:27:07

        Thank you.

    25. DSDavid Senra1:27:07

        You built something amazing.

    26. SPSpeaker1:27:08

        Thank you.

    27. DSDavid Senra1:27:08

        Um, so thank you very much for the time. I hope you, uh-

    28. SPSpeaker1:27:11

        Great

    29. DSDavid Senra1:27:11

        ... accept the invita- the future invitation, and every time we have this conversation, just, like, peel one more layer of the onion of, like, what you're building and why you're doing it. I think it'd be very fascinating.

    30. SPSpeaker1:27:19

        It'd be fun to peel another layer. Thank you.

Episode duration: 1:27:46