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(bright electronic music) [JEREMY] Dave, welcome back to the farm.
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[DAVID BASZUCKI] Thank you for having me.
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[JEREMY] Thanks for being here.
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[DAVID BASZUCKI] Really appreciate it.
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And all of your prep, and all of this. [JEREMY] Thank you.
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Well, it's an honor to have you here. [DAVID BASZUCKI] Yeah.
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[JEREMY] We're really excited for it.
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I wanted to take you back to where it all started.
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It's 1985, and this is the James Dean look.
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(laughing) [DAVID BASZUCKI] I think that's the Stanford yearbook in 1985. [JEREMY] Yeah.
0:33
You're majoring in electrical engineering.
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[DAVID BASZUCKI] That's correct. [JEREMY] Yeah. Future to be determined.
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[DAVID BASZUCKI] Had no idea. [JEREMY] No idea.
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[DAVID BASZUCKI] That's correct.
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With a lot of mechanical engineering and design stuff too. [JEREMY] Wow.
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[DAVID BASZUCKI] That was the foundation of the iLab back then.
0:49
You know, David Kelley, all that, so I took a lot of that too.
0:53
[JEREMY] So I just want to put the audience in this moment for a second. It's 1985, right?
0:58
First-ever Internet domain name was registered, Microsoft launched Windows 1. 0, Tetris was invented.
1:06
[DAVID BASZUCKI] That's right.
1:06
[JEREMY] And Back to the Future was the movie of the year, Marty McFly.
1:09
(audience laughing) So the look makes sense.
1:11
[DAVID BASZUCKI] Yeah, no, the Mac had just come out. I had a Mac Plus.
1:15
You would switch floppies, dot matrix printing, just right on the edge of a lot of interesting consumer software stuff.
1:24
[JEREMY] Yeah, it was an exciting time, obviously to be opening a company.
1:28
Did you know at that moment that you were born to be an entrepreneur?
1:32
Is that where it all started?
1:35
[DAVID BASZUCKI] Not really, although I would say when I went home after my freshman or sophomore year to figure out what to do for the summer, I had no idea what I was gonna do that summer.
1:47
And some other student in my freshman dorm, it was almost like in The Graduate where they say, "Plastics," they said, "Window cleaning."
1:58
And so someone said window cleaning to me.
2:01
I went home for that summer.
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My brother and I spun up this window cleaning business. We just made buck.
2:08
Like we went knocking on doors in the evening.
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We'd just say, "Hey, we can come wash all your windows."
2:15
And just worked all summer.
2:16
So there was a little bit of that, but I would say following the graduation, I actually, I think encountered a difficult time, where, unrelated to the window cleaning, it's like, school's fun-- And you just follow the path, and you do this and you do that.
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And I think when I went to find a job, I was a little lost.
2:37
Like, it just didn't land in my lap in a way. [JEREMY] Yeah.
2:42
So that is really difficult, and a lot of students here are grappling with what they're gonna do after their two years here, so we'll get into that a bit. [DAVID BASZUCKI] Yeah.
2:50
[JEREMY] So, you start with the window cleaning company and then you actually naturally progressed to Knowledge Revolution, the software simulation platform.
2:58
(audience laughs) So that's a natural progression.
3:02
[DAVID BASZUCKI] It was, I would say, along the way I tell a lot of young people this, there were two or three years of just the absolute worst jobs in the world.
3:11
So two years of massive disappointment.
3:16
Arguably, myself not figuring out how to go to companies I loved and moseying all around.
3:22
And, I can remember calling my dad and just not believing how terrible my predicament was.
3:29
And so after a couple of these jobs, I took some time off.
3:34
And I would say flipped to a different mode, which was intuitive mode.
3:39
And at that time, it was the Apple II and then the Macintosh and educational software, and I made a much more intuitive move, just like, "I'm gonna get into educational software." [JEREMY] Wow.
3:49
So it's obviously an exciting time to be doing that.
3:52
You co-founded the company with your brother, Greg, and later Eric Castle joined, and-- [DAVID BASZUCKI] That's right.
3:57
[JEREMY] He would go on to co-found Roblox with you-- [DAVID BASZUCKI] That's right.
4:00
[JEREMY] For all the folks here who are thinking about co-founders and starting a company right now, how did you go about that decision to start a company with those two people?
4:10
[DAVID BASZUCKI] So I would say a lot of luck, actually.
4:14
I think the ecosystem today is so much more sophisticated about finding adjacent people and amazing co-founders.
4:24
On the Knowledge Revolution side, I wrote the first vision of this thing called Interactive Physics.
4:29
It was a old physics laboratory simulator type thing, and it got some traction.
4:35
And the way we found Eric is he saw a review in Mac User magazine literally, and he was a physics major at Cornell University, absolutely brilliant.
4:47
He called me up, he flew out from Cornell and he joined us.
4:50
So literally serendipity. [JEREMY] Wow.
4:53
A little bit of luck, but also some openness to what the world may bring you.
4:57
[DAVID BASZUCKI] Yeah, absolutely.
4:59
And then he joined us in that company.
5:01
The vision of that company was educational software.
5:05
We built this really amazing physics simulation stuff, and for a while it was, you know, used with every textbook and all of that.
5:12
And then we made, I would say typically made a terrible decision because a lot of people like to play with it And we were talking to all kinds of gaming companies and it was really fun, but we made more of like a, you know, 'Oh, the technology is really good.
5:28
Let's get into mechanical engineering.'
5:30
Which was really I would say non-intuitive, not where our strengths were, where more of our technology was, but that was successful as well. [JEREMY] Yeah.
5:42
Suffice it to say, Knowledge Revolution was a big success. [DAVID BASZUCKI] Yeah.
5:46
[JEREMY] Without raising any capital.
5:48
You sold the business for $20 million, and this is in 1998.
5:52
[DAVID BASZUCKI] That's right.
5:53
[JEREMY] What did you learn from that first company building experience that you took forward with you?
5:59
[DAVID BASZUCKI] Well, I learned to you know, if, I think one really big picture thing that we learned we could really intuit the customers for the educational software business.
6:12
And we were in touch with them.
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We could understand who they were.
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We could match the software exactly to these customers.
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And we arguably could have intuited a continuation of those customers into what Roblox became.
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But instead of using that intuition, we moved into this more, once again, mechanical engineering thing.
6:31
So I think we went back to that learning when we, you know, after we sold it.
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And that kind of led to the genesis of Roblox.
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So I think, I think maybe a, a Stanford Biz School thing would be, like, if you have deep empathy, connection with a certain customer, like, that's extremely valuable. [JEREMY] Yeah.
6:51
That ends up being a huge part of the Roblox story and the connectivity you have with your community.
6:55
[DAVID BASZUCKI] That's right.
6:56
[JEREMY] Between the two companies, you, your wife Jan, and your three kids, Jan's here. [DAVID BASZUCKI] Yay.
7:03
[JEREMY] Your three kids, I think aged five, two, and maybe three months at the time-- [DAVID BASZUCKI] That's Right.
7:09
[JEREMY] You picked up and you did a road trip across the country in a mobile home.
7:12
[DAVID BASZUCKI] That's right. [JEREMY] Why?
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(audience laughing) [DAVID BASZUCKI] I felt, I feel like this is one area where we were ahead of our time, right? [JEREMY] Yeah.
7:20
[DAVID BASZUCKI] Like now, in my neighborhood depending on where you live, I think there are nine Sprinter vans in my neighborhood, like little RVs.
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Like it's getting more and more hip.
7:33
But we had a lot of relatives in Canada up through Minnesota, all of that.
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It was just kind of maybe a palate cleanser after all of that.
7:42
What's the most radical thing to do?
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So got this big, 40-foot RV, towed a car, went all over the place.
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I've always been into that kind of thing.
7:56
For a while, I did a stint as a talk radio show host in Santa Cruz for a while.
8:01
Couple of those, things you get out of your system kind of thing. It was an amazing time.
8:07
[JEREMY] Before you build a multi-billion dollar company-- [DAVID BASZUCKI] Yeah. [JEREMY] Makes sense.
8:13
So a lot of the students here today were on this kind of two-year metaphorical road trip, ourselves, not exactly going to Minnesota or hosting a radio show, but we're trying to figure out what's next in our careers. [DAVID BASZUCKI] Yeah.
8:24
[JEREMY] So what did you learn from that break?
8:28
And how would you advise folks here on how they think about that process?
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[DAVID BASZUCKI] I think I've learned it twice, actually, 'cause I can remember in this terrible time right out of college, trying to figure out what I was going to do.
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And rather than trusting my intuition or whatever, I can remember having a spreadsheet of nine potential careers and then all these metrics for each.
8:50
Like, "Well, if it, if this is it, it's really good for this, but it's not so good for this."
8:56
It was like a really weird way to try to figure out your career.
9:01
And then I would say after the selling of Knowledge Revolution, which, what was really interesting is I got a little bit into this mode of like, "Yeah, I just deserve to be a CEO of some new hot company," kind of thing.
9:17
Like, I just sold this Knowledge Revolution, but like, "Well, it's interesting.
9:22
Not everyone's calling me to be this CEO of this company." Like, "What's going on?"
9:27
And then I can remember poking around on a few interesting areas that I don't think were completely vision-aligned for what I was interested in.
9:38
Like I was just really interested in 3D simulation, consumer software, all of that kind of stuff.
9:46
And here I was poking all the way on the periphery of it.
9:50
And I literally remember, I had what I felt like was some vision where what I was doing was just never gonna work And I had to go back to what I was really fascinated with, which was, I would say, an extension of Knowledge Revolution, you know, bigger, better, multiplayer, consumer fun, all of that.
10:09
And that was a much riskier direction, but it seemed like the direction I had to go. [JEREMY] Yeah.
10:15
You were ahead of your time on the road trip, and then you're ahead of your time in building, basically a metaverse, but this is in 2004.
10:23
So after the sabbatical, you guys launched what was a, initially a puzzle game called DynaBlocks.
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[DAVID BASZUCKI] That's right.
10:30
[JEREMY] And then you took it down and relaunched it nine months later in what eventually became Roblox.
10:36
[DAVID BASZUCKI] That's right.
10:36
[JEREMY] For the folks here that are launching their first version of their products, what advice do you have on when to kill it and rebuild?
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[DAVID BASZUCKI] So a couple good things happened.
10:47
We had had the Knowledge Revolution experience and, and we realized even with this very simple 2D physics simulator, it, it was right there in front of us.
10:57
It's like, 'We gotta be cloud, we gotta be multiplayer, we gotta be 3D, we gotta be simulated.'
11:02
Like, 'We think that's gonna be interesting.'
11:05
And from that, we were feeling a little bit like there could be this new category, call it the Metaverse, the Holodeck, Snow Crash, you name it.
11:15
And we were also thinking, you know, if we can build this thing out completely horizontally, get all the aspects of it, it's going to be pretty interesting.
11:23
It was a time when we were not alone in these ideas.
11:27
Second Life was popping out. There.
11:28
com, if you can, there were a lot of these companies trying to figure out what this thing was going to be.
11:36
And what we did initially is we had this whole version.
11:42
We said, "Let's do a, like a really subset of it.
11:45
Let's just do a 3D puzzle thing along that thing 'cause we want to get this live and it's going to take us a long time to get this puzzle thing live and all of that."
11:54
And so we do the puzzle thing and, you know, we invited maybe 100 people.
11:59
And two weeks later, okay, like no one's using it.
12:02
It's like, 'What do we do?
12:04
This is very depressing.'
12:06
You know, maybe, maybe someone, you know, says, 'Oh, I used it for 15 minutes, that was great,' kind of thing. [JEREMY] Yeah.
12:14
[DAVID BASZUCKI] And so then it was a big decision.
12:18
But I think intuitively, we knew that was not the complete product.
12:23
The complete product had to be multiplayer and people making stuff and people playing in it and all of that.
12:30
So that was a bit of a time like, yeah, honestly, like, we knew it, right?
12:35
Like, we've got another nine months here, or a year to build this thing.
12:39
And so you just shut it down, keep going, and relaunch a year later.
12:44
[JEREMY] So if you're not getting the usage, you restart, you rebuild.
12:47
[DAVID BASZUCKI] I think in this case, it's a subtle nuance if the big vision is right, and you can just see it that, we had enough fortitude to say this big vision is absolutely spot on, like, we're gonna suck it up for another 9 to 12 months.
13:03
[JEREMY] And that big vision, just so everybody here can understand what you were imagining in 2003, 2004, it's 3D, it's multiplayer, it's cloud-based.
13:12
What made it fundamentally different from gaming platforms and social media of that time?
13:17
[DAVID BASZUCKI] Yeah, I think, what's really fundamental about this is we felt that-- I think even at that time, we felt there's gonna be some natural technology evolutions that are just inexorable.
13:31
This is going to just happen.
13:34
And we've seen that before with the telegraph system, we've seen it before with the telephone system.
13:40
At that time, you know, we're starting to get into text.
13:43
Video was still, you know, World Fair kind of in everyone's imagination.
13:47
And we were-- You know, gaming was starting to get a little bit multiplayer.
13:52
So we knew, I think, fundamentally that 3D simulation could be a communication platform.
13:58
This could be a way that people ultimately go to school or work together, or those kinds of things.
14:02
And the gaming market was showing some of that technology, but it really wasn't fully user-generated.
14:10
It wasn't just you build whatever you want. It was very pre-canned.
14:14
And user-generated is really-- It means self-service or whatever you build can go live.
14:20
So we were kind of seeing the combination of that, you know, self-service, whatever you build can go live.
14:27
And I think that was a big-- Arguably, Second Life was doing that.
14:33
We were doing it, I think, in a much more scalable, kind of sustainable way.
14:37
[JEREMY] So I'm trying to put myself in your shoes in 2004, 2005, and you're telling people around you, "I'm building an online platform for people to build games for other users."
14:48
[DAVID BASZUCKI] That's right.
14:49
[JEREMY] And I got to imagine people are like, "Dave, this is crazy.
14:53
What are you doing here?"
14:54
So how did you continue to forge on despite the doubters?
14:59
[DAVID BASZUCKI] This was very different than the puzzle game.
15:02
There were a lot of doubters because we were much more into let's build the whole horizontal product out which is cloud, we're gonna use S3, that just came online.
15:13
We're gonna have a development environment.
15:14
We're gonna have all these clients.
15:15
We're gonna have all of that stuff.
15:17
And, and we had a little bit of the philosophy, everything's gonna be very rough, but we're gonna get the complete product to feel it out. So you, you are right.
15:25
Everyone we would talk to or show it to, "This looks like crap," or like, this is like, "No," or, "It's gotta be prettier," or all of that.
15:34
But something really magical happened, and that is the day we launched the ability for people to create stuff, and at that time, we maybe had one or 200 users, we just knew we had hit virality.
15:50
So after all of those other experiences, we knew probably within four hours, just like, okay.
15:57
[JEREMY] In four hours, you could just see it.
15:59
[DAVID BASZUCKI] That's right.
16:00
We-- I would say we had had an earlier slightly viral period where we would buy users and we had maybe 500 users on the platform and we would talk to them.
16:09
That was going pretty good.
16:10
But then, when we launched user-created content and self-publishing, we saw within four hours just creation, creation, creation, creation. [JEREMY] Wow.
16:20
[DAVID BASZUCKI] There were four of us in an office, and we kinda like that night knew, okay. [JEREMY] Wow.
16:25
[DAVID BASZUCKI] Yeah, it was pretty cool.
16:26
[JEREMY] So it's four of you in an office in Menlo Park.
16:28
[DAVID BASZUCKI] That's right.
16:29
[JEREMY] Let's-- maybe actually let's fast-forward a few years. It's now maybe 2007. [DAVID BASZUCKI] Yep.
16:33
[JEREMY] And, and Roblox usage is up.
16:35
You've seen the virality.
16:36
But the economy is starting to slow-- show some-- [DAVID BASZUCKI] That's right.
16:39
[JEREMY] --signs of weakness.
16:40
And you guys are starting to think about monetization in a more thoughtful way.
16:44
[DAVID BASZUCKI] That's right.
16:44
[JEREMY] So that was-- and I think I've heard you say that's a near-death moment for the company.
16:49
[DAVID BASZUCKI] That was one of several, right?
16:51
So that would be a moment.
16:53
(participants laughing) [JEREMY] Do you want to go through all of them or (guest laughing) [DAVID BASZUCKI] Well, no, that, I mean, that, the-- that's one of the times as an entrepreneur where I can remember saying, relative to everything else I've done in my life, "This is the hardest thing ever." Like, this is so hard.
17:09
And-- but at the same time, I can remember us we, we had a problem where users was growing like that, but dollars per user was going like that, so dollars was flat.
17:23
So users is going up, dollars is flat.
17:26
That means you're spending more on infrastructure, all of that.
17:28
So that's a bad situation.
17:30
And so I think we would, we did what the traditional response would be.
17:36
The traditional response is, what did we break?
17:40
Or oh my gosh, there's so many ideas we can do to improve monetization.
17:48
We have a list of 50 of them.
17:50
And so we did that initial, what's the bang for the buck of all the 50?
17:53
Let's figure out everything that's broken.
17:56
Behind the scenes, I would say, just like the starting when we finally hit the complete product, we actually somewhat knew that the big thing is virtual economy.
18:07
And the big thing is, let's build a perpetual motion machine where creators can earn money and sell stuff and all of that.
18:16
But that would seem like a little too hard, and so we actually didn't consider it.
18:20
We spent three or four months churning on all this stuff.
18:24
But sure enough, four months later, just like it's not getting better.
18:27
We'd done like 15 or 20 of these things.
18:30
And then it's like, okay. You're right.
18:33
We gotta go do this big thing.
18:35
But then that clarity kind of put a skip in our step.
18:38
It's just like, we're giving up on all of the things we broke, we're giving up on all the tactical stuff.
18:44
We're just going to get ha, go hardcore, and build this full virtual economy as fast as we can.
18:48
It had to be a complete product, right?
18:50
Digital currency, developers having the flexibility to sell things for currency, users having the ability to buy currency, developers having the ability to cash out on the currency, and some search and discovery accelerations so that whoa some of the devs who are making money get more visibility.
19:11
So we kind of felt it was like some closed-loop operational amplifier.
19:17
If we had all of these pieces, it might just go viral again.
19:21
And sure enough, just like when we had introduced Roblox Studio for the content, we put all these five components, like everyone's talking about them, we're going to launch, and then in probably four hours we said, 'Yeah, it's gonna work.'
19:35
because every dev just says, 'Oh my gosh, I could make a living.
19:40
I'm going to sell a flashlight in my game,' or 'I'm going to sell a motor scooter or something.'
19:46
They started bubbling to our discovery system, users started buying the virtual currency, it just like– [JEREMY] Wow.
19:52
[DAVID BASZUCKI] So we kind of relived that lesson all over again.
19:55
[JEREMY] So it's one of the toughest moments, clearly, but it's also this moment of tremendous resilience, and it builds this muscle at Roblox to do the hard thing first.
20:04
[DAVID BASZUCKI] That's right.
20:05
[JEREMY] And you guys start generating revenue in a big way.
20:08
But still over the coming decade or so, the, you guys face wave after wave of would-be Roblox killers. So that's Minecraft. That's Fortnite.
20:19
[DAVID BASZUCKI] That's right.
20:20
[JEREMY] So what did you decide to do, and critically what not to do as each competitor emerged?
20:28
[DAVID BASZUCKI] Yeah, I can remember, um, so the good news is when Minecraft came out, for example, we had in the pipeline and behind the scenes arguably five to eight really big technical innovations.
20:43
Like we were thinking out of the box on this.
20:45
We were thinking auto sharding in the cloud, we were thinking multi-device, we were thinking super stable APIs, we were thinking build it, we were thinking Lua language, we were thinking abstraction, we were thinking coming mobile.
20:59
They were all kind of bubbling under the surface.
21:02
But then, yes, sure enough, when Minecraft came out of the woods just, right?
21:07
And we kind of lived through, I would say, a two-to-five-year Minecraft craze, just like that, was there.
21:14
But behind the scenes, you know, their pipeline of innovation was nothing like ours.
21:22
Like we had an experience four weeks ago, that 25 million people at the same time were playing.
21:29
And that was all based on a sharded, you know, cloud super pipeline.
21:34
Really, infrastructure abstraction in a way and augmentation with our infra so we could burst into the cloud as well.
21:43
But they weren't doing any of that sharding kind of stuff.
21:47
We had, they split their platform, they had like a Java edition and a Windows thing.
21:53
We thought it was all developers, all stable APIs, like the DOS prompt kind of thing.
21:58
So we knew we had that coming.
22:00
We knew we were going to try to run the same thing on mobile as PC.
22:03
So sure enough, behind the scenes, all of that innovation came to play.
22:08
And then the same story actually happened with Fortnite probably four or five years ago.
22:14
Fortnite came out of the blue, Epic Software, just to be this giant gaming platform, and the same thing.
22:20
Like whoa, this isn't fair.
22:22
Like, how come that thing's so big all of a sudden?
22:25
Like, we're working really hard, but also arguably, once again, a beautiful product.
22:33
In the spirit of doing less more, arguably really hard to manage both a C plus plus engine, a store, a product called Fortnite, like trying to do all of these at the one time whereas we were just 100% all in on this kind of single platform.
22:50
So I think over time that focus for us and a lot of innovation once again brought us to where we are.
22:57
[JEREMY] Yeah, you guys really doubled down on infrastructure and I know concurrency and your ability to serve concurrent users only continues to grow.
23:04
[DAVID BASZUCKI] That's right.
23:05
[JEREMY] You outlasted each of the fads, and I want to just contextualize what a global behemoth Roblox is today.
23:13
Almost 400 million monthly users.
23:16
Billions of hours spent on the platform each quarter.
23:20
Three out of every four American kids between the ages 9 and 12 plays Roblox regularly.
23:27
So at this scale, you're in a different league, you're competing for attention now with Meta, TikTok, YouTube.
23:36
So how do you balance competing for attention with this societal concern around screen time, in particular for young kids?
23:44
[DAVID BASZUCKI] Yeah, so that's really intresting and one way to put it in context from all of our investors out there is the global gaming market's about $190 billion market.
23:54
We're probably running 3% of that through Roblox.
23:58
So it gives a sense of the potential scale here and what the opportunity is as well.
24:07
A couple thoughts on this.
24:09
In the midst of COVID, something really interesting happened.
24:12
You know we had had this vision that we're not really a solo consumption platform, we're not really an image sharing platform.
24:20
We really are arguably the future of the phone system or the future of how you stay in touch with someone else.
24:26
And you know just like there's once the phone system, someday there'll be the Holodeck.
24:32
We saw a little of that in the midst of COVID when people were not able to play outside or go see their friends, a lot of parents discovered Roblox as like the Holodeck to stay connected in COVID.
24:44
That was really a playing out of the thesis I would say, and it's a little bit I think a differentiator between what you might call a communication platform or a solo consumption platform or an image sharing platform.
24:58
There's some pretty cool advantages of the communication platform.
25:01
I think when I was in high school, we had the phone right, and on a rainy day we could call people up.
25:07
So there's a little bit more of a social engagement aspect to that.
25:11
I think there's a little bit of a STEM-art-design- production-business kind of aspect to that.
25:20
But I would say at the same time, I mean, I've gotten clipped in certain news things like by the BBC where I said every parent should decide on their own screen time and like, they were like, "How could you say that, Dave Baszucki?"
25:33
But we really, we really do believe that.
25:35
And I think we think we'll work with parents to be this great communication platform, which is, I think a little different. [JEREMY] Yeah.
25:43
I think it's a very fair point.
25:45
Not all screen time is created equal, and the types of activities kids are doing on Roblox is maybe a bit different. [DAVID BASZUCKI] Yeah.
25:52
[JEREMY] I want to keep going on this child user and, particularly safety-- [DAVID BASZUCKI] Yeah.
25:57
[JEREMY] Challenge that you guys are addressing right now.
25:59
So 11 days ago, the Texas Attorney General filed a lawsuit against Roblox.
26:06
And in that lawsuit, he claims, quote, "Roblox markets itself as a safe digital space of creativity, but in reality, it has become a breeding ground for predators."
26:18
This is one of a few lawsuits the company is facing.
26:22
So when engagement and safety pull in different directions, which way do you go?
26:29
[DAVID BASZUCKI] We always go safety.
26:30
And, and arguably, you know, Ken Paxton in Texas, attorney generals around the country, senators we talk to, you know, whatever, they're really ultimately all trying to go for the same thing, which is child safety.
26:43
And it's a fairly sophisticated situation.
26:46
A lot of parents right now are not super aware that you give an 11-year-old a phone, and there's a lot of apps that are unfiltered.
26:57
Images can be shared on those apps.
26:59
They're not monitoring for critical harms, all of that kind of thing.
27:04
We're actually trying to educate the industry about this.
27:07
And so we are, we actually think it's interesting that device manufacturers don't have ages on their devices. We, small world, right?
27:17
Today I was on TV three times talking about how we're gonna innovate with age estimation for every user on our platform.
27:24
So I do, I'm very optimistic ultimately about the industry learning about how to keep kids safe.
27:31
And I think we have to design our product assuming an 11-year-old is just handed a phone right now.
27:39
And I think we're innovating in a super good direction there.
27:43
[JEREMY] So I wanna keep going on this 'cause it's one thing to prioritize safety and then it's another to scale a company to multi-thousand employees and have each of them prioritize safety.
27:53
[DAVID BASZUCKI] That's right.
27:54
[JEREMY] So when each of your employees might be incentivized on engagement or revenue or other incentive structures in your company, how do you create a safety first culture throughout?
28:06
[DAVID BASZUCKI] Yeah, I think, so one of the things we've done, and I think it's an interesting way to architect the company is we're actually pretty vertically architected rather than functionally architected.
28:17
And so when, in a company that's functionally architected where there's just, like so many engineers and so many product managers, sometimes I think it can be a little hard to say like how many people are working on one thing.
28:33
We have much more moved to we need to have completely dedicated safety stack.
28:40
We need to know 100% product, 100% engineering, 100% live ops, who are all of those people and where are they?
28:48
And at the executive level, make the decision on the head count.
28:52
Like that is pure safety people.
28:55
I would say there's adjacent groups as well in our company, but the user group and others that touch on it.
29:01
So I think it goes straight to the architecture of the company, the size of that safety group and how we architect it.
29:09
[JEREMY] So it's actually organizing specific teams so that they have (unintelligible) [DAVID BASZUCKI] It's literally like we can measure the size of the company called Roblox Safety within Roblox. [JEREMY] Wow.
29:19
So now as a public company CEO, you deal with challenges like this one on safety and I'm sure many others.
29:25
[DAVID BASZUCKI] I would say the safety one I want to highlight.
29:27
I think it's actually an opportunity, not a challenge, because we've started, you know, six through 60 and we're so focused on this, including, oh, we're doing age estimation and other things.
29:39
Long term, we are gonna have this amazing audience of six through 13 year olds.
29:43
It's very difficult for other companies to kind of get to.
29:48
And a lot of our 15 year olds and 20 year olds have been on Roblox since they were 12.
29:52
So I actually think it's a long-term growth opportunity as well as maybe ethical moral responsibility.
30:01
[JEREMY] Let's stick with it 'cause I like that a lot.
30:03
This notion of responsibility.
30:06
And I know it's one of the core values at the company.
30:09
You guys talk about, we are empowered and responsible for both the intended and unintended consequences of our actions.
30:16
So you talked about parents having a choice.
30:20
[DAVID BASZUCKI] That's right.
30:21
[JEREMY] Where does your responsibility as a platform begin and end?
30:26
[DAVID BASZUCKI] Yeah, I think in this case, our responsibility goes beyond financial or legal.
30:32
It's like for me, obviously financial gain's in making Roblox awesome.
30:38
Legal, we typically on the legal side, we wanna be way ahead of that.
30:43
Like we wanna be building stuff that might get wrapped into law five years later.
30:47
We don't want to be waiting.
30:48
Once again, what we're doing with age estimation, there's no law that says we have to do that.
30:52
We're just doing that right now.
30:55
But I do think there's another element in running the company and just what's a fun type of company to run?
31:02
And Roblox is a pretty fun company to run and it's fun to sleep well at night and have a good time.
31:08
So, running the company on that third component, which is just what feels values aligned is also very important.
31:17
[JEREMY] Well, it's a fun company to run.
31:18
You've been running it for more than 20 years now and you went from three employees in a room in Menlo to now thousands of employees and global impact.
31:27
What's the biggest change you had to make in yourself, personally, to scale from being a founder to a public company CEO?
31:36
[DAVID BASZUCKI] That's a really big question, right? [JEREMY] Yeah.
31:38
[DAVID BASZUCKI] Like my job is like a constant re-architecture of myself, really. Like it's a lot.
31:44
And I feel it hasn't just been a business journey, it is like a personal journey.
31:50
I think learning where to put your strengths, learning what you're not good at, adjusting I've made a lot of adjustments.
32:02
I think in the early time of a company, you know, you can be yelling and screaming and going crazy and upset and all that.
32:10
As you get to bigger scale, I think you gotta be a little more zenned out and kind of more jujitsu in your application of kind of you're making things happen.
32:22
I think one of the biggest things for me is actually trying to be more intuitive on people and what we do as a company and less analytical 'cause my intuition is, if anything, I think my intuition tends to be pretty good, and I've kind of clamped it in the past, so focus on that too.
32:43
[JEREMY] What does it look like to be zen at a company that has thousands of employees?
32:48
[DAVID BASZUCKI] I think it, I can, I think if I'm in a meeting with 15 people, and within four seconds, we're reviewing some product thing and I'm just saying, "That is wrong.
33:00
That is not gonna scale," thoughtfully thinking through, "How am I gonna optimize the delivery of this message?"
33:08
(audience laughs) [JEREMY] So the intuition is there, but you don't let it speak freely at all times.
33:14
[DAVID BASZUCKI] That's correct.
33:15
Like, like actually, I'm gonna look at everyone in this room and around and say, "That sucks."
33:20
(audience laughs) I'm going to, in five words, try to optimize the change, all of that.
33:29
[JEREMY] Well, it wouldn't be 2025 if I didn't transition us to talking about AI. [DAVID BASZUCKI] Yeah. [JEREMY] We gotta do it.
33:36
[DAVID BASZUCKI] Let's do it. [JEREMY] Let's do it.
33:38
Every company is racing to adopt AI, and they're trying to convince investors that their businesses will improve as a result of AI.
33:46
So, as you think about Roblox's unique advantages, you talked about some of them earlier, what makes you guys uniquely positioned to take advantage of AI across your business?
33:58
[DAVID BASZUCKI] It's really exciting.
34:00
I think we're, there's obviously a lot of froth in the true frontier three or four companies that are going for whatever super intelligence, whatever.
34:10
But I think there's a whole other dimension out there which is just radically accelerating your business.
34:18
And for our business, we're running, we have huge AI team.
34:22
We're running over 400 different models that we built.
34:26
Everything, tech safety, voice safety, search and discovery, 3D generation, you name it, super broad.
34:34
What's interesting for us in AI is I would say there's been maybe three or four waves of AI for our company.
34:40
Wave one would be behind the scenes, everything's getting better without the customer really knowing it.
34:46
Safety filtering all of that.
34:48
Wave two is starting to see early signs of generative AI.
34:52
The dream, not just for a creator, but anyone walking around in a world in Roblox talk about the clothing you'd like to magically appear or talking about the game you'd like to magically build, which I think is gonna be transformative.
35:07
We're gonna see new types of games.
35:09
I think the next one, though, beyond that, is gonna start to be virtual avatars, doppelgangers, assistants, all of those kind of things.
35:19
And I do think the architecture of these types of platforms will be, you know, if I so choose, there will be a values-aligned version of me that I could say, go play with your kids for an hour 'cause I can't do it.
35:33
And they'd kind of be pretty close, or there would be someone who I could give some commands to and they would go do stuff.
35:40
So I think the future for us will, will, in addition to 3D generation, be like literally, you know, virtual humans and Roblox creation type thing.
35:51
And I think that area is super hot.
35:54
We have people building robots.
35:56
We have people trying to do world models.
35:58
We have all of that kind of stuff.
36:00
Roblox has one very unique thing, and that's about 11 billion hours of human interaction data every month. It's not just video.
36:09
It's what their faces are doing, where their arms are moving, what they're doing in a 3D environment.
36:15
And that's a huge repository of training data that we would never sell or leak, but use to make the platform better.
36:23
So I think there's a big opportunity for us there. [JEREMY] Yeah.
36:26
It's an incredible amount of engagement and creates this flywheel for you guys.
36:30
[DAVID BASZUCKI] That's right.
36:31
[JEREMY] on that second wave, you mentioned developers, and I'm curious if, do you have any concerns about what AI will mean for developers who are really the lifeblood of Roblox's thriving economy?
36:43
They build the games that people play.
36:45
[DAVID BASZUCKI] I'm a little more on the optimistic side, AKA industrial revolution.
36:51
It's not like all of the people who are building horse buggies lost their jobs, but there's like some new types of industry for them to do and accelerate, and do better.
37:01
So I think what we will initially see with our creators is higher quality, more amazing type creations.
37:10
Maybe a shifting in the landscape, but I'm, I'm overall optimistic that we're not gonna have an unemployment crisis.
37:15
I think we're gonna see new types of creative work.
37:20
[JEREMY] Well, that optimism is exciting.
37:22
It means that you're probably gonna continue to run the company for a long time.
37:27
I have one more question for you before I turn it to some audience Q&A.
37:31
Stepping back, as you reflect on the journey thus far, any regrets? [DAVID BASZUCKI] No. [JEREMY] None?
37:41
[DAVID BASZUCKI] I would say mistakes left and right.
37:44
A regret would be, like, if I had to replay my life, I would have changed it, I wouldn't.
37:50
Lots of mistakes, lots of learning.
37:53
[JEREMY] Tell us about one.
37:55
[DAVID BASZUCKI] Just, I would say along the way, all of the places where we've taken shortcuts, not trusted our intuition, could have done things better.
38:06
I would say, if anything, there were times when we could have leaned into our vision even harder, even been more aggressive kind of things.
38:17
I think there have been-- but I think our values are representative of that learning, like take the long view, do the hard stuff first, build systems, try to educate people.
38:32
Short-term hacks aren't gonna work. That kind of stuff.
38:36
And I think now I think we're in a great opportunity really to take the long view on the AI stuff as well.
38:45
[JEREMY] Well, we'll now turn it over to the audience where three students have prepared questions for you. I'll turn it over now. [MINSUK] Hello. I'm Minsuk.
38:55
I'm from the class of 2027. I'm an MBA1.
38:59
Thank you so much for sharing your stories.
39:01
I think it's incredibly inspiring.
39:03
I do have a question for you regarding as you scale your service, as we implement AI, as more users come on board, and as simulation fidelity, and as we increase to use more compute, what are your thoughts on scaling infrastructure, and how do you see yourself reconciling with their demand for compute, and more service and the quality of service as we go forward? Thank you. [DAVID BASZUCKI] Yeah.
39:27
We have this term we use inside the company called infrastructure adjacency.
39:31
And it's really interesting to think about in that we have a lot of data centers.
39:38
We have like 40 data centers.
39:40
At the same time, on a Saturday, at some times what we typically would cover will go up by a factor of three or four.
39:47
So, we have our own bare metal data center.
39:51
But we have cloud partners like AWS and Azure and GCP, where we can turn on massive extra capacity.
39:59
And when we run the math, it's actually pretty optimal.
40:04
Like, we want the reliability of all of our own stuff most of the time, but we'd like to be two or three times bigger for two or three hours.
40:14
This is going to continue.
40:16
So I would say we feel very lucky that we are not dependent on the cloud providers.
40:22
They're typically three times more expensive than our own stuff, both on CPUs, on GPUs, all of that.
40:28
We're continuing to build this out.
40:30
But we'll always have this adjacent cloudbursting capability.
40:34
And I think I could see us if we imagine 10% of the gaming space, 3X bigger, I think we can handle that.
40:42
But I think the other thing is a little secret of Roblox is we are kind of an infrastructure company.
40:49
[LEXI] Thank you for being here.
40:50
My name is Lexi, MBA class of 2026, MBA2, also from gaming industry.
40:55
My question is, previously in the interview, you mentioned gaming is still in the pre-history era, and so just curious about for Roblox, like what's the plan for next five years?
41:06
What should we expect, given on the statements?
41:10
[DAVID BASZUCKI] I like that question, because I do feel there's probably at least three generations of gaming technology and most of the market is arguably could be in the first generation.
41:21
And there is, most games today that are beautiful and high fidelity on a PC don't run on a phone, which is kind of weird.
41:30
Most games don't stream in 3D in a low-latency way.
41:36
They either stream video, which hasn't worked so well, or they're downloaded, some as big as 200 gigabytes.
41:43
So this, the magic combination of exact same experience, low-end two-gigabyte RAM Android phone, and gaming PC instantly joining around the world with low latency, is where I think the next gen is.
41:58
So that in our developer conference, that's kind of a huge architectural thing we've been talking about.
42:03
But there's potential another even architecture beyond that, which is what comes to bear with essentially massive AI acceleration, and upsampling and all of that.
42:13
So it still is kind of in the, I would say, Stone Age generally [MARSHALL] Hi. My name is Marshall.
42:19
I'm an MBA1 here, class of '27.
42:22
I was first introduced to Roblox back in 2007.
42:25
I was in about the fourth grade at the time.
42:27
So I'm curious, what was your original vision for what kids would kind of take away from the platform and how has that evolved over time?
42:36
[DAVID BASZUCKI] So a couple things that are really fun about this product is number one, we were not heavily gamers.
42:42
We were I would think more, thinking if we built this physically simulated cloud stuff that people could build on there'd be a lot of infinite possibility and we'd see a lot of creativity.
42:54
And that I think actually has come to be true.
42:57
We're not being, constrained as like we're game developers but we're more building this 3D cloud platform I think has been one of the most satisfying aspects of the whole thing.
43:12
[JEREMY] Thank you to the students for those questions.
43:15
Dave, before we let you go we have to dive into a view from the top tradition.
43:20
It's our rapid-fire segment. [DAVID BASZUCKI] Yes.
43:22
[JEREMY] All right, let's do it.
43:24
Never seen somebody so fired up for rapid fire.
43:25
[DAVID BASZUCKI] It's like a Rorshach test, right? [JEREMY] Yeah, exactly. Okay, you ready? [DAVID BASZUCKI] Yeah.
43:30
[JEREMY] Favorite childhood game? [DAVID BASZUCKI] Wow. I'm gonna say chess. Me and my brother. [JEREMY] On chess. com now at GSB?
43:38
[DAVID BASZUCKI] No, Just like we used to, a physical chess board. [JEREMY] Okay. Fair enough. [DAVID BASZUCKI] Yeah.
43:42
And then I would say, interesting, inside chess, outside pretending we were in the army kind of thing. [JEREMY] Oh yeah.
43:50
(Dave laughing) Kind of similar. [DAVID BASZUCKI] Yeah.
43:53
[JEREMY] If you weren't running Roblox, what would you be doing?
43:58
[DAVID BASZUCKI] Trying to build a Roblox competitor.
44:00
(students laughing) Is that a real answer?
44:04
[JEREMY] I think that's real, yeah.
44:07
Favorite destination on that iconic family road trip? [DAVID BASZUCKI] Whoa. We went everywhere.
44:17
I would say Mount Rushmore. [JEREMY] Mount Rushmore.
44:19
[DAVID BASZUCKI] Mount Rushmore just because it was a beautiful night and the magnitude of it, and they had a cheesy movie but the whole thing just came together for me.
44:31
It was a beautiful night.
44:32
[JEREMY] And favorite memory as a Stanford undergrad?
44:37
[DAVID BASZUCKI] We were just talking about what the football game, I'm riffing back that we were talking about what it was like to go to a Stanford football game in 1980s.
44:46
You could bring a keg into the stadium.
44:48
(students laughing) [JEREMY] You said the band was pretty raunchy back then?
44:52
[DAVID BASZUCKI] The band was arguably at that time even considered politically incorrect. So you know. [JEREMY] Sounds fun.
45:00
[DAVID BASZUCKI] Yeah, it was.
45:02
[JEREMY] Well, final reflective question before we let you go properly.
45:07
It's not a rapid-fire question. [DAVID BASZUCKI] Okay.
45:09
I got to think about this one. [JEREMY] Yeah.
45:12
What is the best piece of leadership advice you have received? [DAVID BASZUCKI] Oof.
45:19
That makes me think there's many pieces of leadership advice that were bad advice.
45:25
And so I actually two-part answer.
45:29
A lo-- a lot of my development has been trying to over time ignore advice I've been given, and then I would say I-- I-- uh, the best advice, probably 80 people, you know, give it to you when you're just like having a rough time, and they just say, "Trust your gut."
45:49
And many people have given me that.
45:52
[JEREMY] Dave, thank you for being here.
45:54
Ladies and gentlemen, Dave Baszucki. Thank you.
45:55
(audience applause) Appreciate it. (audience applause)