David Senra - David Baszucki, Roblox

Episode Date: April 26, 2026

David Baszucki is the co-founder and CEO of Roblox, the platform where tens of millions of people gather daily to play, build, and socialize inside user-generated virtual worlds. Baszucki grew up in Eden Prairie, Minnesota, studied electrical engineering at Stanford, and in the late 1980s co-founded Knowledge Revolution with his brother Greg. There they built Interactive Physics, a 2D simulation that let students run physics experiments on screen — it sold millions of copies. MSC Software acquired the company in December 1998 for $20 million. After a few years running a division there, Baszucki left, hosted a libertarian talk radio show, drove across the West in a motorhome with his family, and eventually returned to a one-room office in Menlo Park with his old Knowledge Revolution engineer Erik Cassel. They began writing simulation code. The prototype was called DynaBlocks. It became Roblox. The platform launched in 2006, targeting kids and teenagers not just with games but with a canvas for building them. Growth was slow for years — then the pandemic made Roblox essential. In March 2021, the company listed directly on the New York Stock Exchange at a valuation of more than $41 billion. Cassel, who had died of cancer in 2013, did not live to see it. Baszucki has always framed Roblox as something bigger than a gaming platform — a place for human co-experience where creators, many of them teenagers, build the content and share in the economics. He has pledged all additional CEO compensation to philanthropy, directing tens of millions toward bipolar disorder research — a cause tied to his own family's experience with the illness. Made possible by Ramp: ⁠https://ramp.com⁠ Axon by AppLovin: https://axon.ai/senra Deel: https://deel.com/senra HubSpot: https://hubspot.com Chapters (00:00:00) Roblox Origin Story (00:01:14) Sabbatical and Intuition (00:03:36) Founder vs CEO Mindset (00:05:43) Building the Clock (00:07:57) Lifestyle Startup Phase (00:08:49) First Product Failure (00:15:48) Buying First Users (00:17:43) Studio Goes Live (00:18:53) Roblox vs YouTube (00:21:59) Beyond Games Vision (00:25:50) Roblox Operating System (00:33:55) Nine Companies Inside (00:36:19) Safety and Monetization (00:41:13) Robux Economy Loop (00:45:19) Creator to Entrepreneur (00:45:49) Chasing Photoreal Concurrency (00:49:11) Imaginary Competitor Mindset (00:50:08) Capital Efficiency Playbook (00:52:11) Performance As Growth (00:55:40) Owning The Stack (00:58:36) Roblox Infrastructure Engine (01:02:32) Safety And AI Moat (01:06:57) Data Ethics And NPC Testing (01:11:31) Creator Earnings Explosion (01:16:08) Marketplace And Transparency (01:20:01) Near Death Lessons (01:24:43) Ads And Creator Discovery (01:25:35) Closing Reflections Learn more about your ad choices. Visit megaphone.fm/adchoices

You just said something interesting right before we started recording. I asked you how old you were when you started Roblox. That's right. You told me the age and then you said, oh, it's actually an interesting story in a metaphor there. What did you mean by that? So first off, super interesting story because arguably one could say I started Roblox when I was two years old because a lot of the shit really fascinates me. But there's an interesting story because before Roblox, I had started a company called Knowledge Revolution,

physics, enter educational software, simulator, how to learn things. 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. And 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. It was 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 going to be a whole new market here. Immersive 3D multiplayer playing, working, learning, listening to music, all of that stuff. 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, 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 separate. Several people actually from Knowledge Revolution said, we're going to 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. It was logical and risky because at the time you were doing this. This is like 2002, 2003. No one got it back then. And no one quite thought of it.

We had a business, plan slide along the way when we finally raise 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 history of communication was the mail system, voice, texting, maybe video. But in sci-fi, everyone was talking about the holodeck and 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 kind of how we got our launch. And 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. Okay, so four-person lifestyle company, because the first company you started, you didn't raise any outside capital for, correct? Knowledge Revolution got very, very far without raising any money. And you sold it for, what, 20 million?

That's exactly right. That's when you took the sabbatical. That's correct. Explain to me how you knew that you were being logical instead of following your intuition during this sabbatical. What do you mean by logical? I think logical goes to what's someone trying to optimize for? Literally, 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 when I came out of knowledge revolution,

I actually went and looked at a bunch of CEO jobs. That seemed like the logical thing. Wait. Applying to be a CEO of a company, you didn't start? That's right. What a mistake, right? What's your distinction between the difference between a founder and a CEO? 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. You're a world builder. That's no way you're going to jump into somebody else's world. What you're describing is literally like a vision I had one night where, like, I was on this path and there's a world.

There was like this big barrier there. But this path, which was more world builder creators, is like, boom, I got it. And that's when Roblox started. Okay, we got to pause here because there's like almost like a paradox between you. So I had dinner with Honam, who's been one of the earliest investors in Roblox. Yeah. This guy's been telling me where Roblox for as long as I've known him. They've been involved for, you know, a decade and a half.

And he's like, the thing about Dave is if you ask Dave the time, he'll build you a clock. some of the most unique descriptions of another human being I've ever heard. So you're known as this really, you know, essentially like a centric genius systems builder. But then I watch your talk at Stanford and all you're talking about is following your intuition. Can you reconcile those two things for me? They're both very valuable. And so I would say that early CEO lesson was definitely a sign of not following my intuition. 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 Ho, for example, that metaphor of building a clock, it's funny because when we started Roblox, we used to joke, we want to 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 notion of building a cloud 3D UGC system. We keep building that system. Creators are going to 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, it's harder to build a clock. But if you ask me the time every day for the next 20 years, it's probably easier to build the clock than to tell you the time every day for the next 20 years. And that was part of the thought behind Roblox. 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.

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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 where you were saying, the idea behind Roblox, you had the sabbatical, you start Roblox, there's four people. You described as like a lifestyle business going into that?

It's interesting. 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 going to go do something enormously both fun and something on our business plan. Like it could be really big. But it was at the time so fun.

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 just the responsibility got bigger. The second we were live, we could see this thing is going to keep growing. What was the original product? There was actually an original product, and that was an incredible failure. So, and the original product, that was the incredible failure, was arguably us knowing, we intuitively knew what the viral product would be.

We knew the viral product would be online in the cloud, multiplayer, digital stuff, physically simulated, access anywhere, user creation, build cool stuff. We kind of 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 thought, oh my gosh, if this puzzle game thing kind of gets viral, that will give us a little bit more runway to build the four roadblocks. But as you can imagine, that single-player puzzle type game is not quite as fun as multiplayer, immersive 3D 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 going to do? So how do you get from the single-player puzzle game to building a platform? Just deep breath, six more months of engineering.

Let's go. What does the team look like in the six months? Is this still full of people? Initially, it was just Eric Castle and myself. And then John and Matt Dusick were just coming on board. So that decision happened when it was two of us. And you had raised any money? Nope.

Just having a good time building this thing. And funding it yourself. Yeah. You just had something very interesting. He's like, we started this with no expectation. Say more about that. After selling knowledge revolution. and taking my two years 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 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 second we saw the perpetual motion machine starting to work, that was really interesting. When it was just you, your co-founder, these two other people, were you using the term perpetual motion machine? I was using it, yeah. Where did you come from? Perpetual motion machines in physics are, even now, if I go on short form video platform, every once and if you,

few months, you can see some crazy mechanical gadget that if you look like, if you look at it, they'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. That's what a professional motion machine is. 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 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 and that it was word of mouth. You're how old when you started Roblox? 20 years ago, roughly. So like early 40s. Very fascinating to me that you're like,

I want to build a perpetual motion machine, something that has no end, something that carries on forever. Did you know the next company that you want to build is going to be the last company you work on? I did. One thing that Ho Nam told me about you

is like he has unbelievable patience and endurance and he wants to work on something for the rest of his life. But you knew that in your early 40s. I think I actually do it in my 20s because I think, And I actually think I knew it 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. Were you playing these games like civilization? I was more building them. So like when I was hacking up Apple II code, I always wanted to build, how do we simulate reality type games? And then when we built knowledge revolution, that was arguably a two-dimensional world simulator.

I would say video games have historically been more about how they look. I was pulled to not just how they look, but how they function as well and what's like how much fidelity can we get out of it. So I was really interested in that. When we formed knowledge revolution, it was very early in the days of simulating physics on a computer.

And it was, you know, there were papers in Sigraph at the time, very early, you know, algorithms of how you do collisions and all of that kind of stuff, that we had to pull that research out. to build that knowledge revolution physics simulator. And I would say that instinct carried into Roblox as well. So I would say when we sold knowledge revolution and we started Roblox,

I was thinking that immersive 3D physically simulated stuff should have a 20, 30, 40, 50 year trajectory. You know what's confusing to me? Like having that understanding so early and then yet you fell off your back. I think this is really important for people listening. It's like, you fell off your path for two years. I did.

Or it's like the chance that you're going to build something that you can work on for 30, 40, 50 years, this professional motion machine. And that was created by somebody else. Yeah. It's not going to happen. You had to build it from scratch the way you wanted to do it. That's right. I got lucky I fell off that and got back on it.

God damn right. You got lucky. I think so. I mean, you definitely made the right decision. So wait, let's go back to you now you're building like, we're not going to do this like single player puzzle game. No, no. We started Roblox.

But who's created, you knew it was going to be a platform from that point? We did. Okay, so who's making the games? At that point, we had four people. Matt and John joined Eric and myself. John was a really good game maker. And so then we had a little bit of a warm-up phase where John made a couple very famous first Roblox games, like classic Crossroads and Chaos Canyon.

They were really pretty fun, and they tested the system. So we had in-house creation. The three of us are coding. And then we had some users starting to play on classic Crossroads. How are you getting 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 bucket 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 reverse engineer the whole social graph tree all the way back to the starting of Roblox, we'd probably see a one-month period times 50 users, times 30 days.

Probably see 1,500 users that saw some ad, like an online building game, come try it out, that are the initial social graph of everyone on Roblox. Now in the afternoon, the four of us, go online, there's maybe 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 were in a rush. When can we publish the full closed loop system? The closed loop system is anyone can download Roblox Studio. You can make an experience. You can push it live.

there's 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 just like, we've got to get this studio thing out. Like what's going to happen? We don't know. I hope someone likes it. Blah, blah, blah. We've got about 1,500 users.

So you go from, you're trying to get them from being users to creators. That's right. And then a few years later, which I want to talk to about because people, I don't think many people know that the size of businesses, people are building on top. topic or platform. They're big. Yeah, they're massive. Now, at this point,

and we're on the story, you're turning your users into creators. And it happened very virally. So 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 one in the afternoon. Let's push Roblox studio live,

see what happens. And then probably around three or four o'clock, we started seeing our, whoa, someone has published something. Look at that. Look at that. Oh, someone published something that other people are playing.

Oh, look at that. Oh, my gosh. Now there's 20 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. 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. They made a game, the variety of the games. All of a sudden, there's 100 different. things. It's not the boring stuff we made. For the existing users, I'm seeing something new every minute rather than this boring stuff we made three weeks ago. So new content, breadth of imagination,

creators bringing friends, all of those just viral. What do you think when people compare Roblox to YouTube? I think it's interesting. It's a little different. And I, I think. Your Roblox is inherently social on a way that YouTube will never be. 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 just difference between the phone system and reading a magazine. Like reading a magazine on a cloudy day 50 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 50s 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. I'm by myself when I watch YouTube, but I don't watch other people. The content in Roblox is really a scaffold for communication and being together. So is it a game platform or is just a social network? We've actually said we have slides in our early business plan showing two viral loops rather than one viral loop. What about the two viral loops? So in YouTube, there's a bit of a content viral loop.

the better the content, the more retentive it is. And 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 is both a content viral loop and a communication connection viral loop. I've heard that other platforms, other messaging platforms, actually see you guys as a big threat. Snapchat is one I've heard because the user behavior on

Roblox is, yeah, I can play games with my friends. But it's actually, like, the use case I've seen is they'll come home from school, your younger users. And when we were kids, we'd, like, get on our bikes and, like, go find the other friends. They get on Roblox and all their friends are there. But sometimes they're not even playing the games. They're just sending messages to each other. I would say it's interesting, what's the utility of messaging,

even very visual messaging or ephemeral or non-ephemeral messaging, versus immersive 3D. And in a way, 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 phototype 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 niche is immersive 3D co-experience. 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. What other co-experiences besides games?

take place on the platform now. 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 ourselves, you know. So I think Bruno Amaro showed up on one of Jandell's games without us organizing it. I'd say that's a good sign of, 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 early signs of shopping, early signs of, who knows,

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That is axon. dot AI forward slash Senra. I still don't think I understand the total depth and breath of your vision. So if I come to you and I don't know anything about Robox and you're the systems designer

and I say, okay, explain to me what you have built. Yeah. Take as long as you want with this question. If we had to talk super expansive, I would say, look, there's a continuation on the human development of how we communicate. 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. But you do go into a 3D environment, mostly that you could imagine or think about or build. You can go there with your friends and play hide and go see. play hide and go seek you can play a traditional game can be in a fashion show like dress to impress all of the places you go in the holodeck are made by a creator community we've incorporated an economy into this system so the vast majority of people who go do that for free our creators though are very thoughtful and savvy and they come up with interesting you know ways to spend money so when we go and

dress to impress and go into a fashion show. There may be something I can buy if I so choose it. And in a way, our 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 funny that the top hits on Roblox recently have either been fashion, dressed to impress or grow a garden, you know? It's like, that's pretty cool. Okay, but explain how you built the world, though.

Behind the scenes, there's a massive amount of technology in Roblox. Like, this is to make it seem as transparent and easy as it does, there's an underlayer we call the Roblox operating system, which is the company that's then building this Roblox thing. And kind of in line with kind of system thinking, we think of our company as the system. And the company, Roblox is really running almost as if it's nine separate companies. They are all very well connected.

We all get together once a week and connect all these companies together. There is a 3D cloud simulation and tool set company running within Roblox. There is a mini cloud infrastructure company running with 40 data centers and hundreds of thousands of computers. Why did you decide to do that? We initially, we just wanted, we were actually pretty naive. And so rather than going down this cloud path, 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 liked the idea initially of building it 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 scaled benefit. And so I would say we're great partners with AWS and GCP and others. We do burst into those platforms. But 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.

But so, yeah, and we can go in deeper. But Roblox is really nine. Let's go deeper. I want to go back to the nine companies because this is stuff. This is what I meant before we start recording. I was like, you've got all this crazy shit in your head that happened in any of the podcast. We've got to find a way to get it out. So we are, so underneath Roblox, Roblox operating system.

It's how we run the company. We have a group of engineers working not on Roblox, but on the Roblox operating. system, looking at who are the various teams, how we're organized, how we do all of our things in the company. Oh, 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. That's correct.

The company building the world. That's right. Okay. Yeah. Because running the company efficiently is the most powerful way to then build this vision. So, Matt, I won't go into the extent we use AI acceleration amongst our creators. but having all of our engineers, why won't you go into it?

I don't want to say anything non-public, but I would say that is right in line with Roblox operating system. How does every engineer, product manager, data scientist, designer, work at optimal ways? How do, 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,

that vertical stack, how do they control the types of engineers and product managers, how they compensate them. That's a really big part of how we run our company. And 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 we have lots of groups who can go. and do things very quickly on their own,

and then we glue them together constantly. How did you come to the design of the way you have the company operating? 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, 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 going to be in charge of the whole social graph, user-facing components, 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. Essentially, like you created a series like primitives?

Yeah, in a way, we're like 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. But the way you think about these nine, you think of them as almost individual companies inside the company? Is that the term use? 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's almost like we would have a game engine simulation company talking to an infant, infrastructure, cloud, computing, and storage company. They work with each other.

This sits on top of that. But we want as much speed and autonomy in each of these groups. Say more about how this is organized. This is very fascinating. Yeah, yeah, yeah. No, we executive staff meeting 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. What are the horizontal things bringing them together? It's funny, but we track at a, like, a ridiculously high level of fidelity, even in our executive staff meeting. So we, you know, we have probably 50 to 60 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. as a way of our success. And every week, we have all of the key leaders of all of those groups come together, and we just go through all that list of 50. So who's in this meeting? It's these nine people, they're reporting directly to you? Some of them report to me.

Some report to some with out. But there's probably, we'll bring in a few other engineers as well. So there's probably 15 or 18 people in that meeting. And we spend an hour just choo-ch-ch-ch-ch-ch-ch-ch-ch-ch-ch-ch-ch. Well, no, what's the chit-choo-ch-you've got to explain that? A key deliverable one through 50. Like this keep... In an hour?

It's two minutes. It's like one to two minutes an issue. I just recorded with Evan Spiegel, founder of Snapchat. Yeah. And he was explaining his design meeting. And he says, I forgot, maybe an hour or two hours, I have to listen to the episode back. But he's like, we'll go over hundreds of ideas. And we just go through it really, really, really rapidly.

We have our core list that goes between 50 and 70. They cycle every month or two or three or four. We're constantly putting new things in. How do you keep track of all this? We have a pretty good office of CEO team. We have the Roblox operating system. It's got some software in there. My office has, you know, Stratops people,

senior people who kind of work with me to do this on the side. So it's very real time. Okay, can you say more about these nine separate companies? I think you just described two of them. Yeah, we publicly talk about all of them. So I would say 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 40 data centers and all of our compute and bandwidth. Persistence, they're building out. Cool persistent systems as well. Game engine, simulation tooling and Roblox Studio sitting in a group or a company. There is a group called the Economy Group. It's literally all of the things around how we have Robux, how we monetize, how we collect money. The low. ledger, all of that. There's a very large group, arguably the largest safety and civility group, engineering, product, policy, and live ops 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, the various apps we have for having Roblox run in different places. So it's like a wide range of these user groups. Does all, do all nine of these companies have the single-threaded leader? Some of them are still matrixed. 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 in 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. Do you think that'll be the case a year from now? I think so, yeah. Okay, so you don't see the need to change that? No. All right, so let's go back. This is very fascinating.

Essentially, you've designed a system. That's right. Which is your company to design another system, which is the platform that you're building. That's exactly right. 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. That's right. But there's no economy there.

There's no Robux. Pure fun. Pure fun. And you're not, there's no revenue of the company at the time? No revenue, pure fun. Okay, so what is taking back to your decisions, you're saying this, like, oh, we're on to something, this is going to work. What's your next thought? So then what starts happening is Roblox started a persistently viral mode.

Like we could track the growth day by day, week by week. It's like this is organic growth. This is not paid acquisition. It's just like we're sitting back and watching that. we then the fun started being there it's just like 10 concurrent 100 concurrent thousand concurrent 10,000 concurrent creations are getting better we know everything we do with roblox studio the better the better roboc studio gets the more viral it is the better the game engine is the more viral it is very early on to Eric'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. Eric said, we need to build the first safety moderation system. And John and Matt and I all look at it and say, you're right. He's right. Oh, my gosh. Like, we got to 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 Eric 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 finally we say, okay, how can we start making some money on this thing? It's growing. We have costs, all of that. interestingly enough this is another example of we had a big intuition around virtual economy

we said we can get this out a little faster if we'd build this club membership thing at that time club penguin had a club membership can we just charge people five bucks a month or something so we worked on that for a while and so we had this thing called builders club that was kind of 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 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 15. So we're like, okay, we're monetizing. This is great. And so Builders Club keeps going. And then for about a year or two, because 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 revenue and bookings was kind of 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, it's funny because when we started the company, We use 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, communication for many people would be very important without having to make a game. You know, there's a lot of people that just want to show up and play something. Yeah. I think right now you said, the last number I saw,

you have like, I don't know, 150 million daily active users or something. That's right, roughly. Whatever the last public number was. Out of those 150, how many are building games? 150 million. I don't know if we give out our latest Roblox studio numbers, but it's definitely a lot of people, but it's not 10 million.

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. There was a little bit of this early 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 something like Roblox. Yeah, especially if they can do it in natural language. Exactly. So along the way, we kind of had this revelation that, well, maybe the way Reason Builders Club getting tired is not everyone wants to be a builder. A lot of people just want to have 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 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 and 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 board came around. 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 hobbyists to earning a living on Roblox 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 for 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. 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. And that's going to scale with their growth in a way that the Builders Club would never. And what we basically

hit is an elegant economy that pretty much scales more than linearly with ours, basically. And what we have found 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. So creators have kind of figured that out. And so that's been another perpetual motion machine. Deal will help your business hire, pay, and manage any worker anywhere in the world.

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a virtual economy. How many years into Roblox? Very early on, it's got to be 15 years ago. Okay, so you've been building this economy for 15 years. That's right. Is there 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 make more money. I can also, it has to increase the quality of the games. Quality's gone up, up. I would say quality is ultimately going to 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 4K camera, 4K, 60 Hertz display, that's a problem. pretty mature technology relative to maybe, you know, black and white movies with no sound 100 years ago. In the video space, in the video co-emerging space, we're not there yet. Like, we're really excited because 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, 10,000 people. Realistic. Photo reel.

Yeah, because right now, the games look shitty. We believe we're going to get to photo reel. I'm not obviously insulting you. We believe we're going to get to photo reel. Isn't it crazy how far you've gotten? You hit on something about deep in our nature. That's right. The fact that you don't want to do things alone.

You don't want to shop alone. The core bones of the platform are very interesting. And I think it's almost like, you know, Roblox is very sophisticated. very technically complicated, but in a way, that's the same traction one would have gotten on that early, you know, black and white movie in a movie hall without any sound and like some text between the scenes. I just saw something.

So you, the fact that you got this far with, because the kids still care what the game looks like. They just want to hang out. We got pretty far with black and white, no sound movies. 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?

Can you imagine 10,000 simultaneous users, photorealistic on a 2 gig Android device? What's the most concurrent users? You said Bruno Mars was the most you've ever had on the platform? I think there's two types of concurrency. So in Bruno Mars, we're talking 20 million people, but those are sharded amongst copies of experiences. When we say the technical goal is, say, 10,000, that's in a basketball arena. And so running 10,000 concurrent people is really technically complicated.

They may be all around the world trying to get together. And so when we say concurrency, it's in the exact same environment where you can see and hear every single person. This is why you keep saying that it's like a little secret that a Roblox section Infrastructure Company. That's right. Okay. You have not yet figured out how to create the technology to go to do what you're

describing what you want to do, correct? And that's what you're doing every day? I would say part of the job being interesting and fun is I think we have a reasonable idea of how we're going to get there. And so no time frame, not saying when Roblox will get 10,000 user, photorealistic, all of that. But I think technically we have a reasonable idea of how we're going to get there. That's kind of exciting. And very hard to compete with. We run the company in a way.

It's interesting. I mean, we're in a, we've been in many crazy times, right? We've been in the 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 literally think about running the company that way.

Michael Dell said the exact same thing on this podcast where, you know, I think five years he's stood up and he's like, you know, there's a company that's going to be doing, going to compete in every single area we're in. They're going to be faster, better than us. That's right. And he goes, and we're going to be that company. That's right.

And he believes in like, even if you don't have a crisis, you make a crisis. We have to look over here at that imaginary company and then BDAC company. Very similar to how Dale thinks. I just did this episode on Elon and he said the same thing. He's like, even when it looks like we're going to win, I always assume that we're losing. That's right.

Keep that mentality. I want to go back to like, okay, so you stumbled in. There were a couple years into Roblox's history. Now you have this virtual economy. You can see that it's going to scale way better than Builders Club. Hoham, again, I want to read this tweet 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 $500 million seed round prior to launch. Company was called Improbable.

Ho is kind of a spicy guy. Yeah, yeah, yeah. He was aptly named. His roadblock used less than $10 million of equity to build their business to cash flow break even. Is that true? Yes, it is. Okay. And then you've reinvested billions in your history of the free cash flow in the coming decade.

That's right. That's right. That's right. Okay. So, and then his point was $500 million, that seeded round, of this competitor that died, is nothing over the long run. I think they're still around doing military simulation. I think the reason it was $500 million, I think that was at the peak of like VC,

I think it was a Masa San or whatever. Oh, God. And that's just, that's the check you get. Yeah. You know, so sorry, there's no $100 million. There's $500 million. So talk about how you were so efficient, $10 million to get to break even.

Yeah. How'd you do that? 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 walk almost through the space so that do less take the long view know where we're going 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.

What are some of the distractions that you avoided are eliminated? Oh, man. Like there's just, it takes a lot of hubris to build platform because I think everyone is so fun to build content. Like, we all want to 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 we have a saying in the company,

like her performance 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 what's a raw performance feature? We watch how long it takes on a wide range of devices. When someone clicks,

I want to play that experience to the time till they're interacting. And the vision would be video. We've come to assume in video, in short form video, I can just scroll through like, you, chute, chute, choo, we're used to that. Gaming has traditionally never had that. Gaming has traditionally like you download or you do this. Loading screen. You have like this background thing.

people love I text you or something let's go try this okay we're in people actually like that without maybe knowing it so we just made the decision we want to get the time

to jump into any Roblox game down to zero basically and that's very technically complicated but we do believe it has long-term growth aspects to us okay so you have this engine that is you're now making money yeah right you are

staying focused on just building this perpetual motion machines. 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, now you have this other, like, kind of flyable going on very early. That's right. Trying to figure out, basically, the line of my questioning is just like, how the hell did you only burn $10 million?

Yeah, we got viral very quickly, and then we started monitoring. monetizing very quickly. And then you were just very careful what you used the company money for. That's right. And we did, right, we had secondary, we went public. There's a certain amount of financial prudence where I think we didn't spend any money, but we always made sure we had enough cash along the way. And so, you know, if we raise a secondary round, we might put some padding in there.

But we actually never dipped below that initial 10 million. I heard from Ho and I think other people, like you were very careful we were raising money. It was almost like they had to slowly commit. You kept saying no, no, no, no. 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 got very fortunate, whether it was Althos or Greylock or Index or others, that in a way we got, VCs, I think, who could risk it all, who could not like, oh my gosh, just one of my first deals. Like, what were we're going to do?

You know, could really go along with us. And I think that was very helpful. So why was it important? What you were just worried about dilution? Like, what was, are you a control freak? In some areas, probably, yes. Hopefully in other areas not. No, but you're pretty vertically integrated.

You like to control everything. You build its own data centers, your rendering systems, your AI creation tools. you're funded by operating cash flow. I think there's areas of my life where hopefully, like I've decided not. We're talking about work. But for Roblox, knowing what we're building. And I would say it's not just control. I think it's in a way owning our destiny in a way.

So I would say building data centers is... Yeah, but the only way you own your destiny is if you maintain control, right? Exactly. So data center costs, performance, control. Yes. What are the areas of the business are you like that with? Our game engine, for example,

we always imagine we need a multiplayer 3D immersive engine that does 10% of everything really well. Early on, it's like, you should use that game engine, you should use that game engine. So no, that's like a critical core part of our whole platform.

We have to build that ourselves. I think you just like building things. We do like that. Go back to your script, I built an operating system. I built the company and then I built an operating system to operate the company. Yeah, it's interesting because we're going to be building some other interesting things that we just decided on. Of course.

But did you see where I'm going with this? I want to tie that natural inclination or propensity you have for, we're going to call it control 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? There might be like a thought around efficiency, growth. Because you can control your destiny. That's right. And there's many components of our stack where we went exactly the opposite way and we said, we don't need to control that. Like very, in the game engine business 15, 20 years ago, like what audio system are you going to use? We'll use

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Let's go back to this idea that I've heard you say a few times, and I want to understand more deeply. The 30 little secret of Roblox is that we're actually an infrastructure company. That's right. Okay, explain this. I mean, running Roblox behind the scenes is very complicated. So when, you know, grow a garden hits 20 million, people at the same time.

There's a lot going on there. That's 20 million people all around the world. They're playing on a phone, a tablet, a computer, iOS, Android, PC Mac, Xbox, PlayStation, MetaQuest. They are running translated versions of that experience. They are hitting very quickly on Roblox bandwidth. with. They are connecting to data centers in Poland or in Singapore or in Brazil. They are connecting to our core databases as well. And running that is very interestingly complex. Running a 3D simulation

cheaply is very complicated. I said a penny an hour. So that is part of why our infrastructure costs are not crazy is we can do a good job. and even some countries that don't monetize very well. So we have core data centers, edge data centers, and we're running a lot of our own CPUs and GPUs all around that. That's what allows us to do that. And you started this from the very beginning of the company? We did, yeah.

Okay. Like the very beginning of Roblox was running on one giant server. It was like right over there in my office. Can you describe what you see is the flywheel of the world that you built? 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 probably some time where only 5% 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 want to 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 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 see

support what we ultimately think should be on the platform. I think there's potentially a lot of growth there. 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. 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 robots. More spending attracts more creators. If we're ruthlessly pushing forward the quality of our technology stack, our economy stack, our safety stack. So I would say, I think what he's saying is if we walked away from Roblox right now 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. Yeah, the way he described to me is that Roblox is a compounding machine with network effects in a fully functioning economy. Yeah, yeah, yeah. I think we would, we see, we don't know what that a 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. You mentioned safety a few times. Ho-NAM, when we had dinner to prep for this, he said something interesting that you have been, essentially is the biggest playground in the world, right? One way to think about this.

Biggest playground in the world. Obviously, it's the safest playground of the world, but it's also huge, so there's going to be some kind of, you know, issues 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 actually a moat. Because over time, it's going to get safer and safer.

That's really beautiful that he said that. You know, we've seen this in self-driving, and we're not going to claim we're self-driving, but in self-driving, say self-driving ends up being 40 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, wow, self-driving, kind of thing. I do believe the pressure we get in a good way from the media, from this, from that is an incredible motivator for that moat. We, the vast, majority of what we've done on safety and stability, 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 because of laws or anything like

that. But the ultimate mode and the ultimate belief of what is going to be possible. We're going to 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 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. Or seeing more and more governments say we like where you're going with this.

Like, this is really cool. So I'm really optimistic about, you know, having this force of innovation and what we're doing there. Okay. But is this something that you've been building and compounding since your co-founder? All the way since we built the first moderation system. Like the first year to into that. That's right. Explain what, like, can you, I don't know if you can talk about this,

well, like, what have you built to make it? I think we have seen AI is more consistent 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 so when we, you know, part of AI is very much to the human-facing thing.

Like, oh, 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 I do believe it's a mode. And I do believe we've done something very unique. in that what's going on out there right now is we're very upfront. Like we do have people under 13 on our platform.

It's an enormous responsibility. We focus on, once again, all of the aspects of how they play and learn and do things. But that's very different than being some other platform to say, oh, yeah, it's okay. No one's under 13. We're good. And so I do think long-term leaning in and being. part of that is an enormous capability. 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? I think it's worth thinking about. Like I believe we will end up with the best 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. 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 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 path. So the majority of the revenue that Roblox makes now just comes from this platform, this virtual economy, this world doesn't go incorrect. But you have to have a million of these giant model companies coming and wanting to train their data because you have 12, 14 billion. What's the hours of a month? It makes it so simple, right? Like, we're, we have, how many hours of 13 billion plus a month?

So 13 billion of actual people interacting. Like, what does this data set look like? So there's a lot of data sets out there that are in video coupled with ASDW. You know, it's just like a human interaction model. What's cool is because we're running this 3D 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 3D location of everything.

We have how people are trying to move around with their avatar. We have obviously what they're texting and typing in a privacy safe way. But what's fun about it is we would, of course, never sell that data. That's what I was going to ask. Never, ever, ever, ever. For several reasons, one is just from a values thing of respecting the community. Can you imagine like what kind of whacked out decision that would be? Roblox is selling their 3D user data.

We would never do that. Also, I believe over time that this data is going to 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 Wiggums loops recoding, testing, recoding, testing. I imagine just like we do with code now, creator want to do their whole game that way. So we go back to you guys who are buying 50 users a day from Google. Now, if you're building a game on your platform, you can actually use real, like the data from

actual users on Roblox to test what you're building. There's a level of indirection there. I would say the- What's the indirection? 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 10,000 virtual testers. You want to describe how they act, what they do, and put those into your experience and use that to test overnight. I like that idea a lot. That's very interesting. Your stocks seems to be like all over the place sometimes. Why do you think, like, you have these huge Roblox bulls or 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? I feel like I can't predict the stock market. No, I don't care. 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 technical excellence, continued innovation, having people understanding where we're going with this. I mean, there's just going to be more and more of that. So I'm optimistic. And you see AI is a giant tailwind for you guys. It's an interesting time, right? Like it's a really interesting time. And people are questioning all types of different types of companies, what companies are going to grow twice as fast,

what companies are going to this happen. For us, it's so many areas. It's not just making games better and faster. It's increasing quality, time to market of the experiences. And I do think ultimately AI will power some of what we've said around our ultimate spec. Are there completely AI generated games already on the platform? I would say we're getting close. And I'd say 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 to MCP server and all of that stuff, now we're just seeing devs like push at this with AI coding tools and creator tools and like start to create that flywheel. And these are, these can be relatively small teams, even individuals that make wildly popular games, correct? Absolutely. So let's get something. I don't even know how long it's taking me, why it's taking me. long to get into this part because this part of actually most fascinated is, is the size of the businesses that people are building on the platform.

I mean, DevX is well over a billion bucks a year. You know, that's the amount. Explain to people what Devax is. And that's the amount of raw money flowing to creators on the platform. 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. We've also seen something really interesting. You know, top creators on Roblox are making tens and 20s and 50s of millions of dollars. Like these are pretty serious.

I heard some of them are making that a month. I don't know. I can't say that, but I would say they're making. They say that. I don't know if it's true. I heard three kids in the middle of nowhere making $25 million a month. I won't confirm or deny, but I would say like one thing when you hear that as a measure of platform health is if we look at the year-on-year growth rate of creator 1, 10, 100, and a thousand,

Creator 1,000 year on years consistently growing faster than creator number one. Wait, say again? The curve is even flattening more. The growth rate in bookings per year for creator number 1, ranked by how much they're making, they are growing faster than creator number one. How? Curve is flattening, wider use around the world, more opportunity for vertical content, more opportunity for some content for older people.

So that is a flattening of the curve, which bodes well for creator 1,000. What does the long tail look like at the very end? They're making a couple hundred bucks a month? Like, what is that? $10 a month? I think the top thousand is on average making a million bucks. I heard it's higher than that.

I think it's like $1.3 million. Okay. And then I think as we go beyond, though, that curve goes way out to Creator $10,000 beyond where there's significant money being made out on that part of the curve. Do you see a world? 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 grew up, like the YouTuber wasn't even on there, you know, 15 years ago. Now it's, like, always in the top, you know, five or three or whatever 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. Who knows? I do get that noise. Before you said, who knows? What was that noise? It's funny because I get these short-form videos in various platforms of really cool

Roblox creators living in like this giant studio, driving these cool cars, doing short-form video about how cool it is to be a Roblox creator. I think what they're saying is if you do this, there is the potential to make a great business. So what do you guys do to foster like that message? or foster the size of the businesses that can be built. That's pretty viral. People know. I think what we're trying to do is create the tech, literally, like you said, the technical infrastructure, so more and more of them can bring their ideas to reality.

Like we've said publicly, we want to get to 10% of global gaming on the platform. I think that means taking that black and white film projector and turning it into a 4K projector in the in the gaming world so you know we think a lot about the responsibility of building the platform for them so the more photorealistic that it gets the wider the market gets I think in many dimensions concurrency performance cost photorealism ease of creation AI acceleration and creation all of those things help bring ideas to reality but out of all of those what is the most important you would think I'd say it's load balance to actually So I think one of the good things we've done is we,

if I looked at that mix and looked at where our engineers are working, it's not like everyone is working on that one thing. We've got a balance of those things that are pushing forward. Do you have funds coming in and trying to buy up these games and like rolling them up? There is a market out there. I think if anything, we're trying to get the message out to our creators. Like our DevRail team can help you assess what your game might actually.

game might actually be worth because a lot of them are worth a lot of money. Platform itself has never tried to buy any of it. We never have. I think, well, we want some transparency in the market. So, you know, early creators can actually know what kind of a gem they're sitting on. Have you seen people being taken advantage of? 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 of it. over time, we want there to be a lot of kind of transparency in that.

It's almost like you built a game to play entrepreneur and you turn them into a real entrepreneurs. In a sense, it's an entrepreneur game. Yeah, if I wanted to teach like a, you know, a ninth grader about, you know, entrepreneurship, like Roblox might be the best place to start. You could literally teach them how to use AI coding tools, come up with a crazy idea, get it live. On Roblox now, they could buy traffic.

They could spend $50. Same thing, buy users on Roblox, that whole cycle. Yeah, it'd be very interested in that. Because when I talked to Toby Lucke, the founder of Shopify, he said something interesting. Like, he thought, you know, his job is to create more entrepreneurs. Like, that's the way he looked at what he's doing. I think that's right. Yeah, I think it's more important than ever, especially with young people.

If you look at like their empathy or they're like, they're way more attracted to, like, socialistic ideas, you know, than I think like your generation was and definitely my generation was, especially in, you know, in America. 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. What's your biggest threat to that would inhibit you from building what you want to build? Like what you're describing this long term?

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. Let's build that. How often does this imaginary company come up inside the discussions you're having in your real company? Now and then, I would say given the speed at which we think some stuff's happening, actually, 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. The pacing at which you move? Pacing in which we make decisions. Pacing at which we gently adjust without like swinging the tiller widely. The speed at which we check in, the speed at which we track things, it's gotten faster over time. So the way I would think about what you've been telling me is you have this excessively long view. In fact that 20, almost 25 years ago, you're like, that's actually one of our values take the long view. Okay. Well, so 25 years ago, 20 years ago, this is going to be

the last company that I'm going to work on. So therefore, you even said, I think earlier in the conversation is 30, 40, 50 year kind of view. So an excessively long, longest view in the room, basically. So we think about this with infinite number of daily. iterations towards what you're trying to build. Yeah. The combination of those two? Totally. The infinite iterations would be a complementary value, which is get stuff done.

And so we say get stuff done means continuous iteration, but pointing in the right long direction. So something we haven't talked about, but I think I heard you speak, I think this, you said this in your Stanford talk, which I thought was interesting, that there was multiple near-death experiences or almost death experiences of Roblox. We haven't talked about that at all. There were several, I think, one was the economy thing. Like, if we had not figured that out, that would have been very dicey. Looking back now, I mean, you were obsessed with science fiction.

There were all these other, like, virtual economies, right? At the time. There were. Second Life. Second Life. There.com. Yeah. All of that stuff. So were you taking ideas from that as well?

Their.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 kind of 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 that roller coaster. And when 30 people want to 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, 100,000 copies of that roller coaster. We're going to figure out how to route people to that. So we could have 10 million people riding the roller coaster. But there were a lot of early visions out there, I would say, at the same time for sure. What was the argument from the opposing board members to doing the economy? We had a lot of fun going on the platform.

We're just like, whoa, everyone's having fun, building 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 had just been so early moving so fast that our, the way our economy was working right now, It 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. Were you already a public company in this? No. No, no, no. 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 15 years ago,

as far as this economy and backups and all of that. When you were designing this, were there any books you were reading? Were there any examples? So you're like, okay, I'm going to 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 have? I would say all four of us founders were very into high integrity systems. 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 participation-based currency called tickets, as well as a money-backed currency called Robux. The thing that comes out is when you have a participation-based currency, you get one ticket for every day you log in. that's really not a very good way to have people 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 a user can get from work or login will immediately be bought it now. And so we could see people trying to bought that currency all day long and we had to ultimately get rid of it. So we had some good learnings with that. But ultimately, our current economy, it has, you know, as I've said, is kind of scaled better than linear with user engagement. You mentioned there's an advertising business inside of Roblox? That's right. How long has that been going on?

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 most of our discovery, primarily organic, we've been very, transparent with discovery. And so one of the things of 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 Reel saying, here's all the factors that,

you know, bringing you up here. But for some creators who want to do that entrepreneurial experience by 50 users very early, their game isn't viral yet, they can use that sponsored thing just like when we bought traffic from Google. I got one more question for you. Okay. We're almost out of town. Yeah.

I'm jumping up. You want to leave already? No, I'm stretching. Okay. I want to give an expansive answer. Why do things like this? Why are you doing podcasts? 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 I love podcast. In today's media, if I know who the podcast is, Like, that's all I need to find great content. I like podcasts because it's typically not edited. It's not showing up in a discovery mechanism. So I feel it's one of the truest forms of media. Okay.

I'm glad to use the word depth. Because what I want to do is, so throughout a time now, I want to run this back, like, as much as you want maybe every six months or something like that. Yeah, yeah, yeah, yeah. Because I do these selfishly.

Like, I'm obsessed with making podcasts, but I'm obsessed with entrepreneurs. And I want to know, like, something Toby Lucke said to me that I thought was fascinating. He's just like, there's not like one right way to do something in a company. There's probably a hundred right ways. That's right.

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 what you're trying to accomplish. And I have a better understanding of you, way better understanding than when we started the conversation, even though I've listened to every single interview you've done. Your company is 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 scratch. I'll take that as a compliment. You should take it as a compliment. You build something amazing. Thank you. So thank you very much for the time. I hope you accept the future invitation. And every time we have this conversation,

just like peel one more and more layer of the onion of like what you're building and why you're doing it. I think it'd be very fascinating. It'd be fun to peel another layer. All right, perfect. Thanks, man. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening

and leave a review. And make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.