David Baszucki, Roblox

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

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02David Senra?

  You just said something interesting right before we started recording. I asked you how old you were when you started Roblox.

• 0:07Speaker 01

  That's right.

• 0:08David Senra?

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

• 0:11Speaker 01

  So first off, super interesting story because arguably, one could say I started Roblox when I was two years old because a lot of this shit really fascinates me. But there's an interesting story because 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. It was just in the pre-internet time.

• 0:56Speaker 01

  And so we could see them all trying to build and share their stuff. And so we'd see, "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." What happened along the way to the founding of Roblox is in that period after Knowledge Revolution, I took a 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.

• 1:38Speaker 01

  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 logical, very risky.

• 2:20David Senra?

  It was logical and risky because at the time you were doing this, this is like 2002?

• 2:24Speaker 01

  It very.

• 2:25David Senra?

  2003?

• 2:26Speaker 01

  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 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 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.

• 3:10Speaker 01

  And the rest, that's kind of how we got our launch. 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.

• 3:24David Senra?

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

• 3:29Speaker 01

  Knowledge Revolution got very far without raising any money.

• 3:32David Senra?

  And you sold it for what, 20 million?

• 3:34Speaker 01

  That's exactly right.

• 3:35David Senra?

  That's when you took the sabbatical?

• 3:36Speaker 01

  That's correct.

• 3:36David Senra?

  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?

• 3:44Speaker 01

  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.

• 4:25David Senra?

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

• 4:29Speaker 01

  That's right. What a mistake, right?

• 4:31David Senra?

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

• 4:35Speaker 01

  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.

• 4:49David Senra?

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

• 4:53Speaker 01

  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, it's like boom, I got it. And that's when Roblox started.

• 5:09David Senra?

  Okay, we gotta 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.

• 5:18Speaker 01

  Yeah.

• 5:18David Senra?

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

• 5:22Speaker 01

  Yeah.

• 5:23David Senra?

  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. Can you reconcile those two things for me?

• 5:45Speaker 01

  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 Ho, for example, that metaphor of building a clock, it's funny because 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

• 6:27Speaker 01

  cloud 3D 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, it's harder to build the 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.

• 7:00David Senra?

  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 5%. The median company running on Ramp also grows their revenue by 16%. 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.

• 7:45David Senra?

  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 it as like a lifestyle business going into that?

• 8:04Speaker 01

  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. We, I think, were 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, just the responsibility got bigger. The second we were live, we could see this thing is going to keep growing.

• 8:46David Senra?

  What was the original product?

• 8:49Speaker 01

  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...

• 9:02Speaker 01

  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, 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, 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 Roblox.

• 9:45Speaker 01

  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 of weeks of that, we're just like, yeah, we knew it. It's not going viral. Like, what are we gonna do?

• 10:11David Senra?

  So how do you get from the single player puzzle game to building a platform?

• 10:15Speaker 01

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

• 10:20David Senra?

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

• 10:23Speaker 01

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

• 10:32David Senra?

  And you had raised any money?

• 10:34Speaker 01

  Nope, just having a good time building this thing.

• 10:37David Senra?

  And funding it yourself?

• 10:38Speaker 01

  Yeah.

• 10:39David Senra?

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

• 10:43Speaker 01

  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? That the, the second we saw the perpetual motion machine starting to work,

• 11:28Speaker 01

  that was really interesting.

• 11:30David Senra?

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

• 11:35Speaker 01

  I was using it, yeah.

• 11:36David Senra?

  Where'd you come from?

• 11:37Speaker 01

  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 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. And that's what a perpetual 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?

• 12:22Speaker 01

  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, and that it was word of mouth.

• 12:44David Senra?

  You're, how old when you started Roblox?

• 12:46Speaker 01

  Twenty years ago, roughly. So like, early 40s.

• 12:49David Senra?

  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, did you know the next company that you want to build is going to be the last company you work on?

• 13:00Speaker 01

  I did.

• 13:02David Senra?

  One thing that, 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.

• 13:08Speaker 01

  Yeah.

• 13:09David Senra?

  But you knew that in your early 40s.

• 13:10Speaker 01

  I think I actually knew 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...

• 13:24David Senra?

  Were you playing these games, like Civilization?

• 13:26Speaker 01

  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 Siggraph at the time, very early, you know, algorithms of how you do collisions and all of that kind of stuff.

• 14:11Speaker 01

  That we had to pull that research out to build that Knowledge Revolution physics simulator. And I would say, I would say that instinct carried into Roblox as well. So I would say, um, when we, um, 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.

• 14:36David Senra?

  You know what's confusing to me? Like having that understanding so early and then yet you, you fell off your path. I think this is really important for people listening. It's like, you fell off your path for two years.

• 14:45Speaker 01

  I did.

• 14:46David Senra?

  Where 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.

• 14:54Speaker 01

  Yeah.

• 14:54David Senra?

  It's not going to happen. You had to build it from scratch the way you wanted to do it.

• 14:58Speaker 01

  That's right.

• 14:59David Senra?

  Okay.

• 14:59Speaker 01

  So I got, I got lucky. I fell off that and got back on it.

• 15:02David Senra?

  Goddamn right, you got lucky.

• 15:03Speaker 01

  I think so.

• 15:05David Senra?

  You made, 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. We started Roblox, but who's creating, you, you knew it was going to be a platform from that point?

• 15:17Speaker 01

  We did.

• 15:17David Senra?

  Okay. So who's making the games?

• 15:19Speaker 01

  At that point, we had four people. Um, Matt and John joined Eric and myself. John was a really good game maker. And so then we had, 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. Um, and then we, we had some users starting to play on classic Crossroads.

• 15:48David Senra?

  How are you getting them?

• 15:50Speaker 01

  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 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. 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.

• 16:36Speaker 01

  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, okay, we gotta get this studio thing out. Like, what's gonna happen?

• 17:20Speaker 01

  We don't know. I hope someone likes it. Blah, blah, blah. We got about 1,500 users.

• 17:25David Senra?

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

• 17:29Speaker 01

  That's right.

• 17:29David Senra?

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

• 17:36Speaker 01

  They're big.

• 17:37David Senra?

  Yeah, they're massive. Now, at this point, we're in the story. You're turning your users into creators.

• 17:41Speaker 01

  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 3:00 or 4:00 o'clock, we started seeing our, whoa, someone just 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.

• 18:26David Senra?

  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?

• 18:31Speaker 01

  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.

• 18:53David Senra?

  What do you think when people compare Roblox to YouTube?

• 18:57Speaker 01

  I think it's interesting. It's a little different.

• 19:02David Senra?

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

• 19:06Speaker 01

  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 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.

• 19:41David Senra?

  I'm by myself when I watch YouTube. I don't watch with other people.

• 19:43Speaker 01

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

• 19:50David Senra?

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

• 19:53Speaker 01

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

• 19:59David Senra?

  What are the two viral loops?

• 20:00Speaker 01

  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 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.

• 20:22David Senra?

  I've heard that other platforms, other messaging platforms, actually see you guys as 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 use case I've seen is... They'll come home from school, your younger users. And where they like 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.

• 20:53Speaker 01

  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 see a 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.

• 21:34Speaker 01

  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.

• 21:59David Senra?

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

• 22:04Speaker 01

  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 I think Bruno Mars showed up on one of Gendel'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? You know, someday, older people are going to go to church on the platform. Older people are going to work together on the platform. Older people are going to do other things.

• 22:46Speaker 01

  I think the natural evolution of a communication platform is what are the ways people use a communication platform?

• 22:56David Senra?

  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 35 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.

• 23:41David Senra?

  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 1% of advertisers have access to Axon, so you want to get started quickly. And you can do that by going to axon.ai/cenra. That is axon.ai/cenra. I still don't think I understand the total depth and breadth of your vision. So 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."

• 24:20Speaker 01

  Yeah.

• 24:21David Senra?

  Take as long as you want with this question.

• 24:23Speaker 01

  If we had to talk super expansively, 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 can 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." All of the places you go in the holodeck are made by a creator.

• 25:06Speaker 01

  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 into dress to impress and go into a fashion show, there may be something I can buy if I so choose it. And they, 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, 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.

• 25:49David Senra?

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

• 25:52Speaker 01

  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 a, 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.

• 26:34Speaker 01

  There is a 3D cloud simulation and toolset company running within Roblox. There is a mini cloud infrastructure company running with 40 data centers and hundreds of thousands of computers.

• 26:50David Senra?

  Why did you decide to do that?

• 26:51Speaker 01

  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, 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 scale benefit. And so I would say our

• 27:33Speaker 01

  We were great partners with AWS and GCP and others. We do burst into those platforms. But for that, 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, so yeah, and we can go in deeper, but Roblox is really nine.

• 27:56David Senra?

  Let's go deeper. I want to go back to the nine companies because 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. They haven't heard any of the podcasts. We've got to find a way to get it out.

• 28:05Speaker 01

  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.

• 28:25David Senra?

  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.

• 28:31Speaker 01

  That's correct.

• 28:32David Senra?

  The company building the world.

• 28:33Speaker 01

  That's right. Okay. Yeah, because running the company efficiently is the most powerful way to then build this vision. So I'm at, I won't go into the extent we use AI acceleration amongst our creators. But having all of our engineers.

• 28:49David Senra?

  Why won't you go into it?

• 28:50Speaker 01

  I don't want to 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, 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 run 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

• 29:34Speaker 01

  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.

• 29:50David Senra?

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

• 29:54Speaker 01

  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,

• 30:33Speaker 01

  someone is going to be in charge of the whole social graph, user facing components, a 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.

• 31:03David Senra?

  Essentially, like you created a series of like primitives?

• 31:06Speaker 01

  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.

• 31:19David Senra?

  But the way you think about this, these nine, you think of them as almost individual companies inside the company? Is that the term you use?

• 31:25Speaker 01

  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 a 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. These groups.

• 31:53David Senra?

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

• 31:56Speaker 01

  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.

• 32:16David Senra?

  What are the horizontal things bringing them together?

• 32:18Speaker 01

  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.

• 32:53David Senra?

  So who's in this meeting? It's these nine people? They're reporting directly to you?

• 32:55Speaker 01

  Some of them report to me, some report to some without, 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.

• 33:09David Senra?

  No, what's the you gotta explain that?

• 33:11Speaker 01

  Key deliverable one through 50, like.

• 33:14David Senra?

  In an hour?

• 33:15Speaker 01

  It's two minutes. It's like one to two minutes an issue.

• 33:18David Senra?

  Uh, just, I just recorded with Evan Spiegel, founder of Snapchat.

• 33:21Speaker 01

  Yeah.

• 33:22David Senra?

  And he is, 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. So we just go through it really, really, really rapidly.

• 33:32Speaker 01

  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.

• 33:39David Senra?

  How do you keep track of all this?

• 33:41Speaker 01

  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, Stratos people, senior people who kind of work with me to do this on the side. So it's very real time.

• 33:55David Senra?

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

• 33:59Speaker 01

  Yeah, we publicly talk about all of them. So I would say there's. 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 persistence 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 Roblox, how we monetize, how we, you know, collect money, the ledger, all of

• 34:44Speaker 01

  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.

• 35:15David Senra?

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

• 35:19Speaker 01

  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 engine person. But generally, there's one or two leaders for each of these groups that we know exactly who it is.

• 35:41David Senra?

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

• 35:44Speaker 01

  I think so, yeah.

• 35:45David Senra?

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

• 35:47Speaker 01

  No.

• 35:47David Senra?

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

• 35:51Speaker 01

  That's right.

• 35:52David Senra?

  Which is your company to design another system, which is the

• 35:54Speaker 01

  That's right.

• 35:55David Senra?

  Platform that you're building.

• 35:56Speaker 01

  That's exactly right.

• 35:57David Senra?

  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.

• 36:07Speaker 01

  That's right.

• 36:08David Senra?

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

• 36:09Speaker 01

  Pure fun, pure fun.

• 36:10David Senra?

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

• 36:12Speaker 01

  No revenue, pure fun.

• 36:13David Senra?

  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 your next thought?

• 36:19Speaker 01

  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, 1,000 concurrent, 10,000 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.

• 37:01Speaker 01

  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, 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 built 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.

• 37:46Speaker 01

  And so this keeps marching on. And then, 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, "Ah, we can get this out a little faster if we 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. It was kind of fun. We started monetizing.

• 38:29Speaker 01

  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.

• 39:01Speaker 01

  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.

• 39:41Speaker 01

  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 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, 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.

• 40:20David Senra?

  Yeah, I think you, right now, you said, last time I saw you have like, I don't know, 150 million daily active users or something, 140, whatever the last public number was. Out of those 150, how many are building games? 150 million?

• 40:32Speaker 01

  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, it was mostly consumptive. There was a little bit of this early creation. And then with short form video, I think we've much more. Everyone's starting to make videos. I do think there's that potential for something like. Roblox.

• 41:11David Senra?

  Yeah, especially if they can do it in natural language.

• 41:13Speaker 01

  Exactly. So along the way, um, we kind of 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 want to 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.

• 41:56Speaker 01

  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. If you could do this. So we did that, very similar to the Roblox studio situation.

• 42:39Speaker 01

  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.

• 43:17David Senra?

  And that's going to scale with user growth in a way that the Builders Club would never.

• 43:20Speaker 01

  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 without, you know, still optimizing generally for engagement and retention, not for money, is that developer incentive to balance engagement and money. 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.

• 43:56David Senra?

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• 44:41David Senra?

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• 45:19David Senra?

  You launched this second perpetual motion machine, this virtual economy, this currency. A virtual economy. How many years into Roblox?

• 45:28Speaker 01

  Very early on, it's gotta be 15 years ago.

• 45:30David Senra?

  Okay, so you've been building this economy for 15 years.

• 45:33Speaker 01

  That's right.

• 45:34David Senra?

  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 have, I'm making more money. I can also, it has to increase the quality of the games.

• 45:48Speaker 01

  Quality's gone up, up, up. I would say quality is 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 4K camera, 4K 60 Hz display. That's a 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- immersion space, we're not there yet. Like, we're really excited because there's a lot of

• 46:31Speaker 01

  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.

• 46:42David Senra?

  Realistic.

• 46:43Speaker 01

  Photo-real.

• 46:44David Senra?

  Yeah, because right now, the games look shitty.

• 46:49Speaker 01

  We believe we're gonna get to photo-real.

• 46:51David Senra?

  I'm not obviously insulting you.

• 46:52Speaker 01

  We believe we're gonna get to photo-real.

• 46:54David Senra?

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

• 46:59Speaker 01

  That's right.

• 46:59David Senra?

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

• 47:03Speaker 01

  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.

• 47:26David Senra?

  I just, I just saw something. So you, the fact that you got... This far with because the kids don't care what the game looks like. They just want to hang out.

• 47:33Speaker 01

  Pretty far with black and white, no sound.

• 47:36David Senra?

  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?

• 47:47Speaker 01

  Can you imagine 10,000 simultaneous users photorealistic on a two gig Android device?

• 47:53David Senra?

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

• 47:58Speaker 01

  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, talking, 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.

• 48:29David Senra?

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

• 48:34Speaker 01

  That's right.

• 48:35David Senra?

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

• 48:43Speaker 01

  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 timeframe, 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.

• 49:05David Senra?

  And very hard to compete with.

• 49:06Speaker 01

  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, we literally think about running the company that way.

• 49:36David Senra?

  Michael Dell said this exact same thing on this podcast. Where, you know, I think five years he 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 doing, doing faster, better than us.

• 49:48Speaker 01

  That's right.

• 49:49David Senra?

  Technology and he goes, and we're going to be that company.

• 49:51Speaker 01

  That's right.

• 49:52David Senra?

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

• 49:54Speaker 01

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

• 49:59David Senra?

  Very similar to how Dell 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.

• 50:07Speaker 01

  That's right.

• 50:07David Senra?

  Keep that mentality. I want to go back to like, okay, so you stumbled in, there were a couple of 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. Honam, 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 of Roblox, a next-gen Roblox receives $500 million seed round prior to launch. The company was called Improbable." Ho is kind of a spicy guy.

• 50:36Speaker 01

  Yeah, yeah, yeah.

• 50:37David Senra?

  He was aptly named. "His Roblox used less than $10 million of equity to build their business to cash flow breakeven." Is that true?

• 50:47Speaker 01

  Yes, it is.

• 50:48David Senra?

  Okay. And then you reinvested billions in your history of the free cash flow in the coming decades from that competitor of this vision that you're talking about.

• 50:57Speaker 01

  That's right.

• 50:59David Senra?

  Okay. So, and then his point was 500 million, that seed round of this competitor that died is nothing over the long run.

• 51:07Speaker 01

  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 Mossosan or whatever.

• 51:17David Senra?

  Oh, God.

• 51:18Speaker 01

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

• 51:20David Senra?

  Yeah.

• 51:20Speaker 01

  You know, so sorry, there's no 100 million, there's 500 million.

• 51:24David Senra?

  So talk about how you were so efficient. 10 million to get to breakeven.

• 51:29Speaker 01

  Yeah.

• 51:30David Senra?

  How'd you do that?

• 51:31Speaker 01

  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, right 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.

• 52:07David Senra?

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

• 52:10Speaker 01

  Oh, man, like there's just, 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 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 performance is a, is a growth feature. And, you know, we put an enormous amount of work on raw performance features, scale features, those kinds of things. That takes a lot of hubris. So.

• 52:52David Senra?

  What's a raw performance feature?

• 52:53Speaker 01

  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, the vision would be video, we've come to assume on in video, I mean, 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.

• 53:26David Senra?

  Lowering screen.

• 53:27Speaker 01

  You could 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, 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.

• 53:53David Senra?

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

• 53:57Speaker 01

  Yeah.

• 53:57David Senra?

  Right? You are staying. Focused on just building this perpetual motion machines.

• 54:01Speaker 01

  That's right.

• 54:02David Senra?

  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.

• 54:20Speaker 01

  That's right.

• 54:20David Senra?

  Trying to figure out, basically the line of my questioning is just like, how the hell did you only burn $10 million?

• 54:25Speaker 01

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

• 54:29David Senra?

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

• 54:33Speaker 01

  That's right. And, and we did, right? We had secondary, we went public. There's a certain amount of financial prudence where

• 54:42Speaker 01

  I, I think we didn't spend any money, but we, we always made sure we had enough cash along the way. 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 10 million.

• 54:58David Senra?

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

• 55:06Speaker 01

  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 Altos 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, this is one of my first deals. Like what are we going to do? You know, it could really go along with us and I think that was very helpful.

• 55:40David Senra?

  So why was it important? Would you were just worried about dilution? Like what was, are you a control freak?

• 55:46Speaker 01

  In some areas, I think, yes.

• 55:47David Senra?

  Like the more.

• 55:48Speaker 01

  Hopefully in other areas, not.

• 55:49David Senra?

  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.

• 56:00Speaker 01

  I think there's areas of my life where hopefully like I've decided not.

• 56:04David Senra?

  We're talking about work.

• 56:05Speaker 01

  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.

• 56:19David Senra?

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

• 56:23Speaker 01

  Exactly. So data center cost performance, control, yes.

• 56:28David Senra?

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

• 56:30Speaker 01

  Our game engine, for example, we said, we, we always imagined 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.

• 56:52David Senra?

  I think you just like building things.

• 56:54Speaker 01

  We do like.

• 56:54David Senra?

  It's like, go back to your script, like I built an operating system, like I built the company and then I built an operating system to operate the company.

• 57:01Speaker 01

  Yeah, it's interesting because we, we're going to be building some other interesting things that we just decided on.

• 57:07David Senra?

  Oh, of course. But did you, do you see where I'm going with this? It's like, 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?

• 57:23Speaker 01

  There might be like a thought around efficiency, growth.

• 57:28David Senra?

  Because you can control your destiny.

• 57:29Speaker 01

  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 F mod, everyone use it, we'll plug it in. So we, we don't build everything. Like when we feel we can plug that thing in and use it, we'll go that way.

• 57:51David Senra?

  Brian Halligan founded HubSpot 20 years ago, and he has this line about AI that I keep thinking about. He said, "Most companies are using AI to make their teams more productive, but the companies that will thrive make the company itself the intelligence." And that is exactly what HubSpot does. HubSpot gives you AI that works, AI that actually knows your customers and your business. Your AI needs to know what you know, your actual customer conversations, your sales history, what worked last quarter and what didn't. HubSpot connects AI to your real customer data. So when it writes an email, it knows this customer asked about pricing three weeks ago. It knows what campaign brought them in, and it knows that they already contacted support twice this month. And that's when you start seeing actual results. Visit hubspot.com to learn more. That's hubspot.com.

• 58:36David Senra?

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

• 58:45Speaker 01

  That's right.

• 58:45David Senra?

  Okay, explain this.

• 58:47Speaker 01

  I mean, running Roblox behind the scenes is very complicated. So when 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, Meta Quest. They are running translated versions of that experience. They are hitting very quickly on Roblox bandwidth. They are connecting to data centers in Poland or in Singapore or in Brazil.

• 59:30Speaker 01

  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 in 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.

• 1:00:06David Senra?

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

• 1:00:08Speaker 01

  We did, yeah.

• 1:00:10David Senra?

  Okay.

• 1:00:10Speaker 01

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

• 1:00:16David Senra?

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

• 1:00:21Speaker 01

  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 most likely grew pretty virally. Like, there's some early adopters. They're probably really expensive.

• 1:01:02Speaker 01

  But over time, everyone saw that. And so I think that's how we see Roblox going a bit. There's a lot of word of mouth. 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.

• 1:01:26David Senra?

  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 Robux. More spending attracts more creators.

• 1:01:45Speaker 01

  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 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.

• 1:02:12David Senra?

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

• 1:02:17Speaker 01

  Yeah, yeah, yeah. 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 you think simultaneously, we know what we believe is technically possible and we're literally racing to build that.

• 1:02:32David Senra?

  You mentioned safety a few times. Honam, when we had dinner to prep for this, he said something interesting that you have been, essentially it's the biggest playground in the world, right? One way 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 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, 10 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.

• 1:03:05Speaker 01

  That's really beautiful that he said that. You know, we, 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, ah, kind of thing. I do believe the pressure we get, in a good way, from the media, from this, from that. It's 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.

• 1:03:49Speaker 01

  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. Or, 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.

• 1:04:32Speaker 01

  So I'm, I'm really optimistic about, you know, having this force of innovation and what we're doing there.

• 1:04:38David Senra?

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

• 1:04:42Speaker 01

  All the way since we built the first moderation system.

• 1:04:44David Senra?

  Like the first year to into that, okay?

• 1:04:47Speaker 01

  That's right.

• 1:04:47David Senra?

  Explain what, like, can you, I don't know if you can talk about this publicly, like, what have you built to make it?

• 1:04:53Speaker 01

  I, I think we have seen AI as more consistent and 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 gets 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'm, I, I do believe it's a mode.

• 1:05:38Speaker 01

  And I, I do believe we've done something very unique in that.

• 1:05:44Speaker 01

  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 that says, 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.

• 1:06:14David Senra?

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

• 1:06:22Speaker 01

  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. 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 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.

• 1:06:57David Senra?

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

• 1:07:05Speaker 01

  That's right.

• 1:07:06David Senra?

  But you have to have a million of these giant model companies coming and wanting to train their data. Cause you have 12, 14 billion. What's the hours a month?

• 1:07:16Speaker 01

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

• 1:07:19David Senra?

  But how many hours of?

• 1:07:20Speaker 01

  13 billion plus a month.

• 1:07:21David Senra?

  So 13 billion of actual people interacting. Like, what does this data set look like?

• 1:07:28Speaker 01

  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.

• 1:08:08David Senra?

  That's what I was gonna ask.

• 1:08:09Speaker 01

  Never, ever, ever, ever. For several reasons. One is just from a values thing of respecting

• 1:08:16Speaker 01

  Community, can you imagine like what kind of whacked out decision that would be?

• 1:08:21David Senra?

  Yeah.

• 1:08:21Speaker 01

  Roblox is selling their 3D 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, Wiggens loops, recoding, testing, recoding, testing. Imagine just like we do with code now, creator want to do their whole game that way.

• 1:08:53David Senra?

  So wait, go back to you guys are buying 50 users a day from Google. Now, if you're building a game on your platform, you could actually use real, like the, the data from actual users on Roblox to test what you're building?

• 1:09:08Speaker 01

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

• 1:09:10David Senra?

  What's the indirection?

• 1:09:11Speaker 01

  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.

• 1:09:36David Senra?

  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, 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?

• 1:09:54Speaker 01

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

• 1:09:59David Senra?

  No, I don't care.

• 1:10:00Speaker 01

  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.

• 1:10:26David Senra?

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

• 1:10:31Speaker 01

  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 going to grow twice as fast? What companies are gonna 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 experiences. And I do think ultimately AI will power some of what we've said around our ultimate spec.

• 1:10:58David Senra?

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

• 1:11:01Speaker 01

  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. We're now we're just seeing devs like push at this with AI coding tools and creator tools and like start to create that flywheel.

• 1:11:25David Senra?

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

• 1:11:30Speaker 01

  Absolutely.

• 1:11:31David Senra?

  So let's get, something 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, is the size of the businesses that people are building on the platform.

• 1:11:40Speaker 01

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

• 1:11:44David Senra?

  Explain to people what DevX is.

• 1:11:45Speaker 01

  And that's the amount of raw money flowing to creators on the platform. 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. We've also seen something really interesting.

• 1:12:29Speaker 01

  You know, top creators on Roblox are making tens and twenties and fifties of millions of dollars. Like, these are.

• 1:12:36David Senra?

  I heard some of them are making that a month.

• 1:12:38Speaker 01

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

• 1:12:41David Senra?

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

• 1:12:46Speaker 01

  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 one, ten, a hundred and a thousand, creator thousand year on year is consistently growing faster than creator number one.

• 1:13:04David Senra?

  Wait, say it again.

• 1:13:05Speaker 01

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

• 1:13:19David Senra?

  How?

• 1:13:20Speaker 01

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

• 1:13:34David Senra?

  What does the long tail look like at the very end? They're making a couple hundred bucks a month? Like, what is that? Like, ten dollars a month?

• 1:13:39Speaker 01

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

• 1:13:42David Senra?

  I heard it's higher than that. I think it's like one point three million.

• 1:13:45Speaker 01

  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.

• 1:13:55David Senra?

  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, the YouTuber wasn't even on there, you know, fifteen years ago. Now it's like always in the top, you know, five or three, whatever the case is. If you do have this professional 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.

• 1:14:24Speaker 01

  Who knows?

• 1:14:25David Senra?

  Why do you make that noise? There's, before you say who knows, what was that noise?

• 1:14:29Speaker 01

  It's funny because I get these, 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 a potential to make a great business.

• 1:14:51David Senra?

  So what do you guys do to foster, like? That message or foster the size of the businesses that can be built?

• 1:14:58Speaker 01

  It'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 gaming world. So, you know, we think a lot about the responsibility of building the platform for them.

• 1:15:31David Senra?

  So the more photorealistic that it gets, the wider the market gets?

• 1:15:35Speaker 01

  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.

• 1:15:49David Senra?

  But out of all of those, what is the most important, you would think?

• 1:15:52Speaker 01

  I'd say it's load balance, actually. So I think one of the good things we've done is we, if I looked at that mix and I 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.

• 1:16:08David Senra?

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

• 1:16:13Speaker 01

  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.

• 1:16:27David Senra?

  Platform itself has never tried to buy any of them?

• 1:16:30Speaker 01

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

• 1:16:39David Senra?

  Have you seen people being taken advantage of?

• 1:16:41Speaker 01

  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.

• 1:16:57David Senra?

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

• 1:17:01Speaker 01

  In a sense, it's an entrepreneur game.

• 1:17:02David Senra?

  Yeah. If I, 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.

• 1:17:11Speaker 01

  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.

• 1:17:28David Senra?

  Yeah, I'd be very interested in that because when I talked to Toby Luque, 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.

• 1:17:38Speaker 01

  I think that's right.

• 1:17:38David Senra?

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

• 1:17:51Speaker 01

  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.

• 1:18:01David Senra?

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

• 1:18:10Speaker 01

  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, let's build that.

• 1:18:30David Senra?

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

• 1:18:35Speaker 01

  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.

• 1:18:59David Senra?

  The pacing at which you move?

• 1:19:00Speaker 01

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

• 1:19:16David Senra?

  So the way I would think about what you've been telling me is you have this excessively long view. The fact that 20, almost 25 years ago, you're like,

• 1:19:23Speaker 01

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

• 1:19:26David Senra?

  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, it's 30, 40, 50 year kind of view.

• 1:19:37Speaker 01

  Yeah.

• 1:19:38David Senra?

  So an excessively longest view in the room, basically. So we think about this with infinite number of daily iterations towards what you're trying to build.

• 1:19:46Speaker 01

  Yeah.

• 1:19:47David Senra?

  A combination of those two.

• 1:19:48Speaker 01

  Totally. The infinite iterations would be a complementary value, which is get stuff done. And so we, we say get stuff done means continuous iteration, but pointing in the right, long direction.

• 1:20:01David Senra?

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

• 1:20:13Speaker 01

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

• 1:20:20David Senra?

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

• 1:20:26Speaker 01

  There were. Second Life.

• 1:20:27David Senra?

  Second Life.

• 1:20:28Speaker 01

  There.com.

• 1:20:29David Senra?

  Yeah.

• 1:20:30Speaker 01

  All of that stuff.

• 1:20:31David Senra?

  So were you taking ideas from that as well?

• 1:20:33Speaker 01

  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 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.

• 1:21:17Speaker 01

  So we could have 10 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.

• 1:21:26David Senra?

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

• 1:21:30Speaker 01

  We had a lot of fun going on the platform. Like, we're just like, whoa, everyone's having fun building, you know, this viral stuff. Would we? Distorted 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 wasn't like double entry,

• 1:22:14Speaker 01

  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.

• 1:22:48David Senra?

  Were you already a public company when this happened?

• 1:22:50Speaker 01

  No. No, no, no. The SEC, 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, you know, as far as this economy and backups and all of that.

• 1:23:07David Senra?

  When you were designing this, were there any like books you were reading? Or like, were there any examples? 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 had?

• 1:23:18Speaker 01

  We, I would say that 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 A participation-based currency called Tickets, as well as a money-backed currency called Roblox. We, the, the thing that comes out is when you have a participation-based currency,

• 1:24:02Speaker 01

  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 boughted now. And so we just, we could see people trying to buy 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 hasn't, you know, as I've said, is kind of scaled better than linear with user engagement.

• 1:24:43David Senra?

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

• 1:24:46Speaker 01

  That's right.

• 1:24:46David Senra?

  How long has that been going on?

• 1:24:47Speaker 01

  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 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 Reel saying, here's all the factors that, you know, bring you up here. But for some creators who want to do that entrepreneurial experience, buy 50 users very early, their game isn't viral yet.

• 1:25:31Speaker 01

  They can use that sponsored thing, just like when we bought traffic from Google.

• 1:25:35David Senra?

  I got one more question for you. Okay. We're almost out of time. We're out of time. Are you jumping up? You want to leave already?

• 1:25:40Speaker 01

  No, I'm stretching. Okay. I want to give an expansive answer.

• 1:25:44David Senra?

  Why do things like this? Why are you doing podcasts?

• 1:25:47Speaker 01

  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 podcasts. 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.

• 1:26:17David Senra?

  Okay, I'm glad you used the word depth. Because what I want to do is right at the time now, I want to run this back, like, as much as you want, maybe every six months or something like that.

• 1:26:25Speaker 01

  Yeah, yeah, yeah.

• 1:26:26David Senra?

  Because I do these selfishly. Like, I'm obsessed with making podcasts, but like, I'm obsessed with entrepreneurs. And I want to know, like, something Toby Lukas 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 like a hundred right ways.

• 1:26:38Speaker 01

  That's right.

• 1:26:38David Senra?

  And you have to figure out like what makes sense for the context you're in, and then who you are as a 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, 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 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.

• 1:27:04Speaker 01

  I'll take that as a compliment.

• 1:27:06David Senra?

  You should take it as a compliment. You built something amazing.

• 1:27:08Speaker 01

  Thank you.

• 1:27:08David Senra?

  So, thank you very much for the time. I hope you accept the invitation, 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.

• 1:27:20Speaker 01

  It'd be fun to peel another layer.

• 1:27:21David Senra?

  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.