Make Better Decisions by Fixing Yourself First

David Baszucki is the co-founder and CEO of Roblox, a platform built around a simple idea: give people the tools and incentives to create together. In this short conversation we discuss how a health decision saved his son's life and how it changed how he eats, why bureaucracy compounds unless you actively destroy it, monitoring your mind before making decisions, and why the best products often improve by removing complexity. It's time to listen and learn. ------ Chapters: (0:00) How Keto Can Help Treat Bipolar Symptoms (2:38) Connection Between Physical and Mental Health (3:58) Current Metabolic Routine (4:40) How Your Metabolic State Affects Decision Making (5:48) The Signs of a Great Product (6:32) Bureaucracy is the Enemy of Progress (ALT: Why You Need to Destroy Bureaucracy) (7:20) Giving Feedback that Actually Motivates (7:50) The Key to Feedback is Tone (8:44) The Email You Should Never Send (9:53) Patterns in Bad Decision Making (10:38) Principles of Good Decision Making (11:19) Mental Models for Problem Solving (11:56) The Gaming World Said the Avatar Was a Disaster. He Didn't Listen. (ALT: Why the Gaming World Hated the First Avatar) (12:58) When Instinct and Data Disagree (14:12) Roblox's Magic Decision Making Quadrant (14:38) Inner Monologue of the Best CEOs (15:36) Manufacturing Threats to Achieve Alpha (16:08) Mistakes in Roblox History (18:30) Biggest Generated Universe in World (19:33) Roblox Community's Pushback on New Avatars (20:20) Capital Allocation Strategy (22:28) Building Incentives on Early Roblox (24:31) Early Disagreements on API (26:18) How Erik Cassel Supercharged Roblox (27:05) The Economic Model that Almost Ruined Roblox (31:43) How Robux Works (32:22) Robux as Future Digital Currency (33:34) What True Focus Looks Like (35:14) How Roblox Uses AI (36:11) Age Ban and Verification Policy (38:29) Is Age Verification Slowing Growth at Roblox? (38:56) Positioning and Optionality for Long Term Growth (39:43) The Future of Immersive Gaming (42:51) Reaction to Ready Player One (43:48) Advice For To a 16-Year-Old Wanting to Start a Company ------ Newsletter: The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠fs.blog/newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ------ Follow Shane Parrish: X: ⁠⁠⁠⁠⁠⁠https://x.com/shaneparrish⁠ Insta: ⁠https://www.instagram.com/farnamstreet/⁠ LinkedIn: ⁠https://www.linkedin.com/in/shane-parrish-050a2183/⁠ ------ Follow David: X: https://x.com/DavidBaszucki ------ Thank you to the sponsors for this episode: +Applovin: Launch your first AppLovin campaign and grow your business: https://applovin.com/shane +Matic: the robot vacuum that does it all—grab yourself a year of free bags here. ⁠http://maticrobots.com/shaneparrish⁠ +HeyGen is a message-first AI video platform that helps people and AI agents turn ideas into professional video in minutes. Try for free at https://www.heygen.com/tkp +LMNT: My go-to zero sugar electrolytes — get a free LMNT Sample Pack here: https://DrinkLMNT.com/TKP NOTE: This episode discusses health and medical topics for informational purposes only. Shane and his guest are not medical professionals, and nothing in this conversation should be considered medical advice. Please do your own research and consult a qualified healthcare professional before making decisions about your health. NOTE: Shane and guests may hold positions in assets discussed in this episode. This podcast is not investment advice and is intended for informational and entertainment purposes only. Nothing in this conversation should be considered investment advice, financial guidance, or a recommendation to buy or sell any security. Always do your own due diligence or consult with a qualified financial advisor before making investment decisions. 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.

• 0:00Speaker 00

  If one is not reducing bureaucracy, there's no neutral ground. If one is not trying to improve things, it is going backwards.

• 0:15Shane Parrish?

  I want to start in an unexpected place before we get into a bunch of other things.

• 0:21Speaker 00

  Okay.

• 0:21Shane Parrish?

  But I want to talk about how keto changed your family's life.

• 0:24Speaker 00

  So this is super interesting. I had dabbled with keto maybe 10 or 12 years ago. Then this really, and this thing happened with my son where he got super bad bipolar, probably eight to 10 years ago. We tried every medication. We tried every solution to get him off medication. And here we were, four, five or six years later, doctors had told him, we're going to be on five medications for the rest of your life. He wasn't quite himself, lots of hospitalizations, all kind of stuff. And then out of the blue, someone I knew in the metabolic health community just said, hey, by the way, keto solved my bipolar.

• 1:08Speaker 00

  And so you could imagine after trying every resource in the world, right? Just all these doctors and all of that, we said, let's give it a shot. So we found a super smart keto doctor, super smart keto dietitian. And the fact that he said, I will try it. Oh my gosh.

• 1:29Shane Parrish?

  Huge.

• 1:30Speaker 00

  Huge. And then the next step, kind of three weeks in on the keto thing, was him saying, whoa, I feel a little different. And kind of picking up just a little bit more of him. Still heavily medicated, but like the real him starting to poke through.

• 1:50Shane Parrish?

  That must have been so hard on you and your wife as well.

• 1:54Speaker 00

  So hard on us. What's really freaky is the number of families that it's that hard on. Like we walk around the world and we see, you know, go to a football game and there's 60,000 people. There's probably many people in that stadium going through that same thing.

• 2:13Shane Parrish?

  Was there ever a moment where you just felt like you were breaking?

• 2:17Speaker 00

  Luckily not.

• 2:20Speaker 00

  Either through some combination of, as you can imagine, here's this patient, we got to be there for him. So it's just like, okay. And luckily I don't have what he has. So how do I, in a way, take care of myself so I can be there for him?

• 2:38Shane Parrish?

  And how do you think about the relationship between mental health and our, our, our body? I guess in that sense.

• 2:46Speaker 00

  If I, if I roll back the clock and think about my mind and how I thought about mental health 10 years ago, I use that as a template for how everyone without someone in their family must think about it. It's just, oh, people go crazy. Oh, they're having a mental health thing. I never thought of it as a super physical thing. Cause now I think of it as the same as a broken arm. It's just part of your body is physically not working. It just happens to be your brain. With this keto thing, I think I've developed a theory that in some cases, mental health things are very physical. It's, is your brain getting enough energy? The theory behind keto is that arguably we were eating some, you know,

• 3:31Speaker 00

  maybe more primeval foods up till 10,000 years ago. We hit the agricultural revolution. That was wonderful in many ways. Our population flourished, but in certain ways, we might not be fully adapted. There may be certain people who just are not fully adapted to that many carbs in their diet. And so for my son, he may be one of those people. And that launched a family foundation, I'd say for the last four or five years, doing research on this.

• 3:59Shane Parrish?

  What's your current metabolic routine?

• 4:02Speaker 00

  I do think I'm doing pretty well on not eating a lot of complex carbs that like spike my glucose. So I'm wearing a CGM right now. So I have a, like a little app on my phone and I can see my glucose level whenever I want to see it.

• 4:18Shane Parrish?

  But you're not tracking your ketones?

• 4:20Speaker 00

  I'm, I'm not tracking my ketones, although I have in the past. And so I kind of know what's going to spike me. But generally I eat a fair amount of protein, a fair amount of fat, not too many carbs. And I don't eat any sugar. I basically don't eat any starch, like anything that's going to give me a glucose spike.

• 4:41Shane Parrish?

  How does your metabolic state affect your decision making?

• 4:45Speaker 00

  I do think eating a lot of food or even, even a lot of carbs, we can all feel that kind of slowed down, kind of hibernate sleepy mode. I think in a more fasted state, you can feel that more alert, like I want to go do stuff kind of thing. And I do think it's good to make decisions in that if you can tell the difference in that I want to go do stuff mode. I think those end up being longer term decisions. They can be decisions that in a less optimistic mode seem that's impossible. Like that's so hard. I do feel I have learned to tell when I'm in an on mood, when I'm in an off mood,

• 5:30Speaker 00

  when I'm a little more of an optimistic mode, which I think is general. I do try to observe that from the outside in and say, all big decisions make in the optimistic mode. So I do try to like, say, is the decision making machinery in the optimal state?

• 5:49Shane Parrish?

  Outside of Roblox, how do you think about great products?

• 5:52Speaker 00

  I like the notion of less is more. So I like the notion of telling everyone it's very easy to add knobs and stuff. It's very hard to remove all of the knobs and sliders. It's fun when we think about products, like in a kitchen, for example, when we think about great products. I definitely would not like a dedicated appliance to cook hot dogs as opposed to a beautiful knife and a beautiful frying pan. So I think I like simpler things of higher quality rather than complicated things.

• 6:33Shane Parrish?

  How do you think of removing when it comes to the company? I mean, there seems to be like sediment builds up inside the company. And bureaucracy is the natural sort of like entropy of an organization. And then there has to be a counterforce almost to get rid of that.

• 6:48Speaker 00

  We do use the term destroy bureaucracy inside the company at times. Like I would say that if you are, if one is not reducing bureaucracy, there's no neutral ground. Like I think in a lot of situations where one thinks we're pretty good. Like we're just going to let it be in this steady state. That's actually things are imploding in a way. If one is not trying to improve things, it is going backwards.

• 7:21Shane Parrish?

  How do you give feedback to people?

• 7:23Speaker 00

  What I have tried to do is move to more frequency, more in the moment, relaxed, not a big deal, rather than let's have a feedback session. So trying to be in the moment. Oh, what do you think about that? I think is much better than blocking or waiting or trying to organize it.

• 7:50Shane Parrish?

  How would you think that people receive that feedback?

• 7:54Speaker 00

  I think that feedback is hyper tone related. I actually think if delivered in a neutral, positive tone, where people can sense my blood pressure's not going up, where I'm just like, I got your back no matter what. It's all cool. Even if the feedback's pretty harsh, it's like, whoa, that was okay. So whereas I do feel if feedback is delivered aggressively or it's just like, oh, it's traumatic, I think that can actually influence it more than the feedback.

• 8:27Shane Parrish?

  I like the idea of tonal because so often we've, you know, in a distributed workforce or people working from home, a lot of feedback is written over text or Slack or, and then you don't have that tone or softness that goes with it.

• 8:40Speaker 00

  I support that. Also, if I get riled up, like don't touch text or email, like just walk away.

• 8:49Shane Parrish?

  Do you recognize it?

• 8:50Speaker 00

  Oh yeah, just red alert. Do not send that email.

• 8:53Shane Parrish?

  To you or the one that you're about to send?

• 8:55Speaker 00

  No, just imagine writing an email where you're thinking, I'm so pissed off. It's going to feel so good to send this email. Don't send that. Cause then like the next morning, you're like, oh my gosh, thank goodness I didn't send that. I can call this person. I can have a lot more impact in delivering that same message without being all worked up about it. Plus also one, what, what is one trying to optimize? When someone's trying to send that email, I'm optimizing for myself. Whereas when the next morning comes around, you can say, well, actually I should optimize for the learning and excitement of this employee.

• 9:39Shane Parrish?

  I like that a lot. I think of it in terms of like outcome over ego.

• 9:43Speaker 00

  Absolutely. We're just constantly trying to make it a better experience for the employee. Who cares about me being pissed off?

• 9:53Shane Parrish?

  When you see people make mistakes, what are the patterns of mistakes that people make when it comes to seeing reality, ego, decision making in that vein?

• 10:05Speaker 00

  I don't know. I don't think there's a lot of mistakes. I think the typical pattern is, hey, can we make this simpler? Hey, can we look a couple of years out and think about what's going to happen with that? That looks a little short term. Hey, that looks a little complicated. You have two things doing the same thing. Hey, can we take that from a appliance that heats up hot dogs into two separate appliances, a pan and a knife that are both the best in the world?

• 10:38Shane Parrish?

  Can you spend a few beats and explain the principles of good decision making and good thinking as you see them?

• 10:45Speaker 00

  There is something, I think, inside of an organization where for many decisions, it's actually more important just to let's identify the person who's going to make the decision and let them be somewhat free and creative to make the decision than in many cases, a group decision or a confused decision, or we're trying to do all of that. So I think you'll see more and more us at Roblox. It's just like, can we identify the decision maker? And having, having them have a little freedom to make their own decision, I think, is super powerful.

• 11:19Shane Parrish?

  Aside from systems thinking, what are some of the mental models that you use to think through problems?

• 11:25Speaker 00

  I think one mental model that we've had in thinking through problems is kind of an irreverence in a way to the problem. You know, one of the decisions, I think back to the early founding of Roblox, and I would call this a set of an irreverence is the very earliest version of Roblox had a, what we would call the classic Roblox character. We were saying, okay, we're building a user generated gaming platform. We're going to have an avatar. The very first Roblox avatar was, was a very fast programmer art avatar to get something working. Its proportions are ridiculously simple.

• 12:09Speaker 00

  You know, the legs are one by one by two. The body's two by two by one. The face of the early Roblox avatar was just programmer art that we put together. Universally, all of the gaming industry people we would talk to, whoa, whoa, whoa, do not ship that. Like you need a full avatar, you know? You need a meshed avatar. It's got to be high res. Your, your objects need to look better. So we got that universally. I would say even within our team, we got that. But we decided it's better to ship that early and start getting feedback on it. I thought that was a great decision.

• 12:49Speaker 00

  And we found out actually that a lot of the input we'd been getting, thank God we didn't listen to that, basically.

• 12:58Shane Parrish?

  How do you deal with a situation where your instinct and the data disagree?

• 13:02Speaker 00

  We get that quite often. It's interesting to think of the whole Roblox community and how smart and creative they are and how passionate they are. There's a really gentle line that needs to be worked on as we both drive the product forward as well as listen to that community. And that creates many conditions where our instincts are different than the community's vibe. There have been situations where our instincts have been different. The community's been right. But there's many other cases where instincts have been right

• 13:45Speaker 00

  and the community then follows along and says, that's an absolutely great idea.

• 13:49Shane Parrish?

  But how do you resolve that? Like so much of getting to good decisions and good outcomes is seeing reality and adapting to reality.

• 13:57Speaker 00

  I, I think a lot of decisions that can be made incrementally that aren't one way. Those are a lot easier. We try to make faster decisions in the right direction. We can adjust. I think realizing when we need to adjust is super powerful. It's interesting because two of our values are take the long view and get stuff done. We kind of like to say there's a magic decision making quadrant where the magic quadrant is, it's both a long view decision with hyper iteration to get there. And that's kind of a, a magic safe quadrant. All of the other quadrants have a little weirdness to them.

• 14:38Shane Parrish?

  When things aren't working the way you want them to, what's your inner monologue in those moments?

• 14:43Speaker 00

  Interestingly, I think when we're running companies, we have all the evolutionary biology of being like out there in the wilderness, trying to survive and, you know, having battles and all of that. So I think CEOs can get that feeling like, oh my gosh, do I have enough firewood for the next three winters? And it's like, oh, it's not feeling too right. That has been for me, an intuitive early thinking thing. What's great is it leads to typically a refinement in strategy or a little bit where you're like, ah, ah, ah, ah. Then all of a sudden the light goes on. It's just like, oh, we got the plan. We know exactly what to do. We're going to send four people out.

• 15:28Speaker 00

  They're all going to have axes. We're going to put in three months, three years of firewood. We think we can do it in three weeks. Everything's great.

• 15:36Shane Parrish?

  Do you manufacture threats as a way to motivate or focus yourself? And I, I think of Michael Jordan playing for the Bulls. He used to manufacture things that other players said about him.

• 15:47Speaker 00

  We, we, we are running right now. They, I'm not going to say what the company looks like. It's not an existing company. In my own mind, I have like, I'm imagining the company across the street that is like our, you know, could call it a threat. Like, what's it look like? Who are the people? How many people? What are they building?

• 16:08Shane Parrish?

  Do you analyze your mistakes?

• 16:10Speaker 00

  Yeah.

• 16:11Shane Parrish?

  How do you do that? What's your process?

• 16:13Speaker 00

  I would just say my process, I would say typically my mistakes have come, I think, from being maybe overly logical and less intuitive.

• 16:27Shane Parrish?

  Say more about that.

• 16:28Speaker 00

  One can fall into the trap of just saying, I don't, I have to go down this path in a way and not popping out of the box and kind of thinking of the more outside of the box solutions. So trying to think of mistakes I have made have been typically where, where I've hung on to a concept too long, when I actually was very free to change my course. I think we have a lot more optionality than we imagine when I look backwards in time.

• 17:03Shane Parrish?

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• 17:43Shane Parrish?

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• 18:30Shane Parrish?

  Is it fair to say that Roblox is the biggest generated human universe in the world?

• 18:37Speaker 00

  It's worth thinking about that because it would be worth thinking, what's the definition of a human generated universe? Like, there's universes in books and in movies. As far as an interactive multiplayer universe where people can go together and do things together, I mean, it might be.

• 18:55Shane Parrish?

  So through this virtual world, what have you learned about human desire and psychology?

• 19:01Speaker 00

  What I think I have learned is that we need to have enormous respect for all the people in this virtual world. I think it's surprising how much people can attach to their digital identity. I mean, it has to be very carefully respected. Like, this is real stuff, right? There are real emotions happening, real interactions happening. And I think I've also learned that I feel it's still very, very early in this.

• 19:33Shane Parrish?

  Say more about attaching to your virtual identity.

• 19:37Speaker 00

  Once again, this is an area that I love the Roblox community on, and I think they're very sensitive to this, in that we're migrating all of our avatars to a position where, rather than just being a monolithic block, for those users who choose, the head may smile if they want it to smile or something like that. But in the migration of this process, the Roblox community has just been absolute sticklers for perfection in the migration. And it's because people have been familiar with their avatar for such a long time. Like, it's like, you can't take my head and, you know, adjust a few, like, what are you doing? So, and I think they're right.

• 20:20Shane Parrish?

  How do you think about things like capital allocation? You guys just announced your first buyback recently.

• 20:26Speaker 00

  Super thoughtful. Knock on wood, we've made a lot of cash in our history, like, a lot of positive free cash flow. A lot of the decisions we make have come from not necessarily capital allocation, but what are we trying to do? You know, what is the big picture of the opportunity and what we're trying to grow for them? I would say we've refined that many times throughout our history.

• 20:52Shane Parrish?

  Go deeper on that.

• 20:53Speaker 00

  You know, it's almost like we're in Roblox version 5.0 right now, in that when we started the company, the vision we had, I think, was spot on. We were imagining a new category, human co-experience category, the metaverse category, the holodeck category, the snow crash category. We really could see that coming, but we were very moderate and modest in the very first thing we were going for. When we started, for those of us who could remember, there was like Club Penguin was a really popular kids game, and we just thought that was, oh, that's huge. Like, Club Penguin, like, they've got, you know, X many people, we like what they're doing.

• 21:36Speaker 00

  We started with arguably a much bigger, deeper, technical foundation. I would say, though, along the way, we've refined our aspiration and what we're trying to do. When we went public, we were talking about, you know, connecting the world. Two years ago, we talked about getting 10% of global gaming on our platform. That continues to refine as we have a bigger percentage of global gaming on our platform. I think you'll continue to hear us kind of expand our ambition.

• 22:08Shane Parrish?

  What percent are you now?

• 22:10Speaker 00

  Well, you can look at where we're tracking on our bookings, and I think if you divide our bookings by 200 billion, we're in the 3% to 4%.

• 22:18Shane Parrish?

  That's amazing. That's incredible.

• 22:20Speaker 00

  It's incredible, and at the same time, it actually seems like it's exciting to me because there's a lot of room beyond 3% or 4%.

• 22:28Shane Parrish?

  What have been incentives for people? What have you gotten right and gotten wrong over the years?

• 22:33Speaker 00

  I think we got really lucky in being really fascinated with incentives. And I think very early on, when we started building Roblox, some of the early founders, you know, John and Eric and Matt and myself, we were just really into economics and incentives and what makes people do things in a nice, appropriate way and drives it. At the very start of Roblox, we thought just the incentive of user-generated content, like, whoa, everyone can make their own game and they can come and play it and show it to their friends. We thought that would be an amazing incentive, and we thought that would give us amazing amounts of content.

• 23:17Speaker 00

  That did prove to be really true, you know? Along the way, we had a lot of questions around economic incentives, and we, Roblox got pretty big without a developer, a way for developers to earn money on the platform. It was a hobby for everyone. We had people who were working 24 hours a day, just they loved their Roblox creation. They're struggling, like, wow, I gotta make a living, I just want to build on Roblox. So we had a lot of board-level discussions. Should we turn this into something where someone could make a living? We actually, in retrospect, it's crazy.

• 23:57Speaker 00

  We went back and forth a lot, like, well, I'm not so sure we should do that, but we did come up with a notion, okay, we're going to build a really elegant system, creators can make whatever, you know, wide range of experiences, they can have users participate economically, it's going to be free for most people. Some of these creators who are working 24/7 might be able to make a living on that. I mean, we thought, I think we thought about that very systemically because that, that system has just been the engine behind us ever since then.

• 24:31Shane Parrish?

  One of the things that you and Eric disagreed on was the API?

• 24:36Speaker 00

  So Eric Castle, co-founder, started Roblox with me, passed away from cancer like eight years ago, rest in peace, but in a way, a values template for the company. And when we started Roblox, Eric and I were the first two engineers. We wrote the whole system. We had some false starts too, by the way. There's a really fun story that I would say we both knew what we wanted Roblox to be. And we knew, we want user-generated multiplayer, build your own thing, go play it with your friends, like, that's what we want.

• 25:20Speaker 00

  Along the way, we tried to ship early a subset of that and just blew, did not work. It was a non-avatar-based, more puzzle thing, and it's just like, whoa, back to the drawing board. I was in a way saying, okay, we're making this game creation platform, let's try to hardwire all these types of games you could make and have all of this extra cruft on the system. I remember actually, like, we, in our core C++ code, for the techie people that are out there, we actually like mocked up a capture the flag game, and we had a flag as part of our core API.

• 26:03Speaker 00

  In retrospect, it's an absolute disaster because the flag is such a, you know, user-generated, complex, specific game thing. For me to have put that deep into our core stuff was just like terrible engineering. Eric was very different. It's like, whoa, whoa, whoa, don't do that. Like, we need an interface, a language with this thing, we need an API, we need to have this thing be very generalizable. There's a game creation language called Lua, let's connect that up and don't do any of this stuff. And it's weird that I was initially like, whoa, I don't know if I trust that, but we started doing that, the power was just absolutely enormous.

• 26:46Speaker 00

  You know, rather than my hardcoded stuff, the power of this generalizable thing, that, that, that was kind of like a core engineering foundation that gave Roblox a lot of its UGC boost in a way.

• 26:58Shane Parrish?

  You mentioned a couple of false starts. What are some of those false starts where you guys went down the wrong path? And how did you realize you were going down the wrong path?

• 27:05Speaker 00

  Along the way to building an economy on the platform, we started with a very different economic model. It was a membership model. You got a few extra places to build on Roblox. In retrospect, that was a really bad idea because building should be unlimited. But along the way, that economic model started to fail, actually. And we had a situation where our user growth was going up, up, up, up, up, but less people wanted to buy this membership. And so this is really interesting, right? Our users are growing. It's all great, but money is flat to going down.

• 27:46Speaker 00

  And so what we did on that, I would say, is a very typical tactical response. Okay, something's up. Let's fix the current system. Let's make a list of 50 things that might be broken, 50 small tune-ups that we can do towards this system. Okay, let's do that. So as you would imagine, we made that list of 50 things, did like 30 of them. Oh, we still have the problem. Now what? But in the back of our head, we had been thinking about the, the economy, about virtual currency, about how this was like a whole outside of the box game changer. This wasn't just tuning up something that was arguably broken.

• 28:27Speaker 00

  This is like, this could be 100 times bigger than what we're doing. And so then all of a sudden, like maybe in the, in a disparaging moment, like this, oh my gosh, you know, all of us in the company said, we just have to do this, like this big, hard thing. But then we had absolute clarity, like we're just betting it all on this new economy system. We were very thoughtful that the economy system was a bunch of complex parts. It needed virtual currency. Users needed to be able to buy virtual currency. Like some of the early things were like in some of the games, you could buy a flashlight if you wanted it. Some of the games, if you wanted to be an eagle instead of a sparrow,

• 29:11Speaker 00

  you could buy an upgrade for that. And then finally, we said, you know what? In addition, we're going to show which of the games on Roblox are making the most Robux. Like where are people spending it? And so launching all of those things at the same time, there's virtual currency, people can buy it, creators can incorporate it, you can see what's earning. It created like a, a loop or a system that within eight hours, we just said, yep, we got it. Like boom, because we could see like within eight hours, creators are like, oh, I gotta add this. I gotta do this. There's the top grossing game on Roblox. People are actually interested in that.

• 29:50Shane Parrish?

  You invented a world where people can do whatever they want.

• 29:53Speaker 00

  That's right. And so we knew like, okay, we finally got it. And after all those months of fixing those 50 little small things, the right system just all done.

• 30:04Shane Parrish?

  That's awesome.

• 30:05Speaker 00

  Yeah.

• 30:07Shane Parrish?

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• 30:51Shane Parrish?

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• 31:33Shane Parrish?

  with any purchase at drinklmnt.com/TKP. That's drink L M N T dot com slash T K P.

• 31:44Shane Parrish?

  How does the virtual currency work specifically? How do you value it? Does it get tethered to outside forces? Like, how do you think about that?

• 31:53Speaker 00

  We have generally thought it's better not to inflate it to have it be a somewhat consistent value. If you were, or I were to go buy some Robux, we would see it's generally somewhat like a penny per Robux. It's generally been that way for about 20 years. So I would say that's no, no promise long-term. It's directly tied to the dollar, but I think we would try to keep it stable and not inflating or deflating.

• 32:22Shane Parrish?

  Do you ever see a world where you can use that currency outside and I can go buy a Starbucks or something with it?

• 32:28Speaker 00

  I do see that world. No future plans. We haven't announced anything. It's interesting to think that many, many eight through 12 year olds, their first exposure to money is Robux. So I do think for many young people, um, learning how to use a virtual currency, not to spend it all at once, maybe to, you know, divvy it out a bit, can be a lot of learning. And so it's interesting to think over time, if young people get sophisticated enough to, you know, use that to go to a 7-Eleven or something.

• 33:05Shane Parrish?

  What would have to be true technologically for that to be possible? Or is it possible today?

• 33:10Speaker 00

  I don't want to go into too much details. We've thought about a lot of that. I think it's a little bit more of a what's the focus of the company right now? And it's a little bit more, should the focus of our company be, you know, young kids are doing a lot? Or we have an increasingly larger percentage of what is play in the world? So we're pretty focused on just what is play in the world.

• 33:35Shane Parrish?

  What does focus mean to you?

• 33:36Speaker 00

  I think one way to think about focus is like, is there one statement in your head that everyone in the company can just understand? And is the, is the focus human understandable? We are just doing this. And everyone just says, oh, I got it. Like I can rally around that. So I think it's a, that's a little bit, how easy is it to present it or share it?

• 34:05Shane Parrish?

  Double click on that understanding and how important words are in communication, not only for the sender, but the receiver and how you spread messages throughout the company.

• 34:14Speaker 00

  I'll use an example. Very early on in the formation of the company, we, um, when we were very small, we used the tagline, you make the game. That was a, an idea that anyone could make very simple games in Roblox. I think as we think about that notion and we think about AI and what's going to become possible with AI in the future, it's actually been fun to go back to those words and think, are they now possibly even more true than they've ever been? And that the more we have the ability to use AI for anyone to make a game they think about, those words can have really big meanings.

• 34:57Speaker 00

  So I think, um, you know, going after say our vision is 10% of the gaming market. That's a pretty good focus. A lot of people understand it, but I think that's constantly, should be reevaluated a bit as we think about where we're going in the future.

• 35:14Shane Parrish?

  Do you use AI internally to help make decisions or help expand your context window in the company?

• 35:20Speaker 00

  I would say we, we have all kinds of AI. We have a bunch of internal systems that we have built. So, you know, we have a thing called the Roblox operating system that we use for tracking the work in the company more and more, um, helping people see how they fit into the organization. Those are all like MCP enabled. So anyone can take their AI system and run it on top of those. In a way, we think of all of our Roblox systems as things that either people or AI can look at and run things against. So we have all kinds of people building custom little things that are looking at the work tracker or doing some things.

• 36:04Speaker 00

  Some people auto generate like our one-on-one discussion topics. So I would say, yeah.

• 36:11Shane Parrish?

  I want to get into talking about a lot of the policy that's coming out of governments all around the world in terms of age bands. How do you think? Without commenting maybe on whether they should or should not exist, who do you think should implement those? Should those be at the company level specifically? Or should they be at a platform level like Apple?

• 36:33Speaker 00

  I mean, when I talk to senators in the United States, I say, please, how can we help you? Take a look at what we've done on our own without any laws requiring it. We're now using AI to check the age of every single person on our platform. We've open sourced our voice safety filter. We've done this, this, and this. So I do say, look at what private industry can do. So that's one thing. And then, of course, I think there has to be a lot of thought and caution. And I think universally legislators I've met with, they do have a balancing act. They are trying to enact great legislation,

• 37:17Speaker 00

  but they're trying not to have the tragedy of good intentions. They're trying not to craft laws that's just like, oh, my gosh, I wish we wouldn't have done that. You know, one could say, for example, well, on a mobile phone, whoever makes the mobile phone should check the age of everyone on the mobile phone. We said, we're not waiting for that. We're going to do it ourselves in a way.

• 37:39Shane Parrish?

  But do you think that that is a better solution from an industry point of view? Or do you think it's better for you're not waiting? That's great. But do you think it's more elegant to have it at a device level or at an individual company and you're responsible for?

• 37:55Speaker 00

  This was makes it so tricky in that I would say both in that knowing what we do, given that we're doing age check for all of our users for comms, for example. We know, for example, a lot of parents don't have the time to configure their device or a lot of parents to say, yeah, take my iPad and go do that. And so if that iPad is configured, for example, as a parent, it's handed off to a kid, that can be a little tricky. So I would say even when devices maybe have an age in them, we'll still keep doing our own thing.

• 38:30Shane Parrish?

  But that's had a cost on you. I was listening to your last earnings call this morning and it slowed down growth.

• 38:36Speaker 00

  I would say the opportunity to build a global platform that has more and more people playing together, which is amazing. And all around the world, not just quote over 13, but of all ages. I mean, this is foundational to our growth. Like, we're very optimistic.

• 38:56Shane Parrish?

  I think where I was going with that is you're able to take a longer view in part because you're a majority shareholder, you're the founder, you carry a lot of weight in that, you can make these decisions. Not every company is going to feel that they can take an immediate short-term pain for longer-term gain.

• 39:15Speaker 00

  Yeah, I would say this is, once again, where our aspirations are. Like, we think digital play is just amazing. I shared we're in the three to 4% of the world right now. The imagining what the future is going to be for the types of like interactions we're going to have, it's pretty amazing. So I do just feel the work we've done, safety, civility, platform-wide is foundational for platforms like this.

• 39:43Shane Parrish?

  If you close your eyes, I want you to tell me what Roblox looks like in five years from now.

• 39:49Speaker 00

  I'll share a couple of examples. One, we've shared the other side of that, which is the technology we're building for Roblox Reality. It's surprising that it's actually hard to imagine what a photorealistic multiplayer game would feel like. Like, we're not used to it. We're used to looking at gaming footage and saying, that is an amazing game. That looks so good. But I do think when we look at it, we say, but that is a game, by the way. That is not, that's not like Bourne Identity, you know? And whereas if we ran Bourne Identity on a 2K screen,

• 40:33Speaker 00

  that looks different than that. So I do think there's going to be a future world where we have all the aspects of the multiplayer gaming, interesting, but it feels like that. And I think that's going to be pretty mind-blowing. It's going to be a little bit like going from black and white to color or going from 512 to 2K. Like, people don't quite realize how big that can be. So I think that's one aspect of it. I think there's another aspect where the notion of you make the game is really going to come full circle because games are much more complicated than code.

• 41:16Speaker 00

  They have images and assets and they have environments and they have stories and they have all of that. But getting to the point where you or I make a beautiful thing, share it with our family, play it just by talking about it, I think is going to come true as well.

• 41:35Speaker 02

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• 42:04Shane Parrish?

  I think that that's incredible. What do you think will be the second and third order consequences of that?

• 42:11Speaker 00

  I think the positive thing to think about is actually the fun parts around connection and digital play will, in a way, become very, they're already quite meaningful. I think the consequences will be more fluidity in digital play, the feeling that it's not me as a user and them as a creator. The notion, it'll almost be like, in the old days, only, you know, 1% of us were oil painters documenting the king's portraiture. Whereas now, I think we all feel like we're oil painters. We have our phone, we have digital, you know, image tools

• 42:56Speaker 00

  and we're all kind of feeling like we're part of it. And in a way, rather than a digital technology like reducing the job market for oil painters, it's probably increased the job market. There's a lot more people doing digital imagery. I'm actually thinking the same thing will happen for gaming and that the, both the hardcore creator market and all of us will be more involved in the creation of immersive experiences.

• 43:22Shane Parrish?

  What was your reaction to watching Ready Player One?

• 43:24Speaker 00

  Ready Player One, the book, I loved. The movie V1, I loved. But I do like the less intrusive, you know, far out VR. I'd say like Black Mirror, when they do VR, like you just put a little white dot on you and like takes over their eyes and your body and all of that. It's less intrusive. I think that's probably more where it's going to go, probably, than just goggles and stuff like that. Huge fan of Ready Player One, but I think there's a wide range of like technical coverage of how this is going to work. I'm a stickler, I would say on sci-fi movies,

• 44:04Speaker 00

  like the more real and the less comedy or glitchy or whatever, the more I like it. And I think it's really hard to find sci-fi movies that are just trying to be real.

• 44:18Shane Parrish?

  I want to get this right, so I'm going to read this. But my 16-year-old submitted a question for you.

• 44:23Speaker 00

  Hi, 16-year-old.

• 44:25Shane Parrish?

  If you were starting out at 16 today with no money, no contacts, no network of people that you could rely on, how would you spend the next five years to maximize your chances of building a company that matters?

• 44:42Speaker 00

  Oh, my gosh. I would, well, I'll tell them what worked for me is that was the last thing on my mind when I was 16. Like, I was into, in a way, hang out with people I liked. I was into what naturally I was good at and interested in, whether it's building model rockets or go-karts. So I think if one is 16 and actually that's like what you're into,

• 45:14Speaker 00

  there is a notion to like, can one, as one goes through the normal course of life, you're going to go to high school, you're going to maybe go to college, in parallel, can that be your fun little hobby? In a way, can you warm up on that in an authentic way?

• 45:34Shane Parrish?

  We always end these interviews with the same question, which is, what is success for you?

• 45:39Speaker 00

  I feel every day I'm already feeling very successful. So I feel like I'm in a way.

• 45:45Shane Parrish?

  What goes into that feeling?

• 45:46Speaker 00

  I feel waking up every day just saying, I'm so fortunate. So I actually feel that way.