Roblox CEO: How to Make Better Decisions by Fixing Yourself First

Summary

Podcast Summary: The Knowledge Project

Episode: Roblox CEO — How to Make Better Decisions by Fixing Yourself First

Host: Shane Parrish
Guest: David Baszucki (CEO of Roblox)
Date: August 18, 2026

---

Episode Overview

In this episode, Shane Parrish sits down with Roblox CEO David Baszucki to explore the timeless principles that drive both personal and organizational success. The conversation covers Baszucki's insights on decision-making, mental health, product design, feedback, incentives, virtual economies, safety, and the future of digital play. Personal stories, particularly about his family’s journey with keto and bipolar disorder, provide an intimate look at how foundational change begins with oneself.

---

Key Discussion Points & Insights

1. Personal Transformation and Mental Health

[00:15 – 04:41]

• The Power of Diet for Mental Health:
  • David shares a deeply personal story about his son’s battle with bipolar disorder. After years of medication and hospitalizations, a ketogenic diet brought unexpected improvements, sparking a family foundation to fund research in metabolic health.
  • Quote: “Three weeks in on the keto thing, was him saying, ‘Whoa, I feel a little different.’ Still heavily medicated, but like, the real him starting to poke through.” – David Baszucki [01:32]
• Shift in Understanding Mental Health:
  • David now sees mental illnesses as fundamentally physical, akin to a “broken arm” but in the brain, and stresses the importance of metabolic health in mental wellbeing.
• Routine for Self-Optimization:
  • Baszucki tracks his glucose with a CGM, focusing on low-carb, no sugar, high-protein, high-fat meals.
  • He tries to make big decisions only when in an optimistic and energized metabolic state:
    • Quote: “All big decisions make in the optimistic mode. So I do try to like say is the decision-making machinery in the optimal state.” [05:29]

---

2. Principles of Simplicity in Product and Organizational Design

[05:49 – 07:21]

• Less is More:
  • David champions the importance of simplicity in product design and company process, preferring versatile, high-quality tools over single-purpose, complex items.
  • Quote: "It's very easy to add knobs and stuff. It's very hard to remove all of the knobs and sliders." [05:55]
• Combating Bureaucracy:
  • He asserts that failing to reduce bureaucracy means the organization is moving backward.
    • Quote: "If one is not reducing bureaucracy, there's no neutral ground. If one is not trying to improve things, it is going backwards." [06:48 & 00:00]

---

3. Effective Feedback and Communication

[07:21 – 09:53]

• Frequent, In-the-Moment Feedback:
  • David prefers relaxed, real-time feedback over formal sessions.
• The Importance of Tone:
  • He emphasizes that delivery—especially tone and emotional state—is more important than the content of feedback. Written feedback is risky if emotionally charged.
  • Quote: "If I get riled up, like, don’t touch text or email. Just walk away." [08:40]
  • Memorable Moment: David admits he sometimes writes angry emails, but never sends them, recognizing the benefit of waiting to prioritize outcome over ego (with Shane echoing: “Outcome over ego.” [09:39])

---

4. Principles and Pitfalls in Decision-Making

[09:53 – 14:39]

• Empowering the Right Decision-Maker:
  • Identifying and freeing individuals to make decisions is often more impactful than seeking consensus:
    • Quote: “Let’s identify the person who’s going to make the decision and let them be somewhat free and creative to make the decision…” [10:45]
• Embracing Irreverence & Iteration:
  • David recounts the success of shipping the “ugly” original Roblox avatar against industry feedback, valuing user feedback and fast iteration over premature perfection.
• Balancing Data and Instinct:
  • Sometimes instincts and data diverge; the solution is fast, reversible iteration and being willing to adjust.
  • Baszucki describes a “magic quadrant” philosophy: Long-term vision combined with hyper-iteration is the sweet spot. [13:57]

---

5. Analyzing Mistakes & Maintaining Perspective

[16:08 – 17:04]

• Learning from Mistakes:
  • David admits his mistakes often stem from being “overly logical and less intuitive,” holding onto ideas too long, and losing perspective on the available optionality.
  • Quote: “I think we have a lot more optionality than we imagine.” [16:28]

---

6. Understanding Digital Human Universes and Identity

[18:37 – 20:20]

• Respect for Digital Identity:
  • Roblox’s scale demands profound respect for users’ digital identities; users are deeply attached to their avatars, making any change sensitive and significant.
  • Quote: "It's surprising how much people can attach to their digital identity. I mean, it has to be very carefully respected." [19:01]

---

7. Capital Allocation, Incentives, and Roblox’s Evolution

[20:20 – 26:58]

• Iterative Ambition & Vision:
  • Roblox’s aspiration has continually evolved—from chasing Club Penguin to targeting 10% of global gaming.
  • Company currently holds 3-4% of the global gaming market by bookings. [22:10]
• Incentivizing Creators:
  • A considered, research-driven approach to incentives and economics led to the launch of a developer rewards system, fueling platform growth.
  • Quote: “That system has just been the engine behind us ever since then.” [24:31]
• Engineering Debates and Shifts:
  • David and co-founder Eric Castle learned through missteps not to hardwire specific game types, but to favor flexible, generalizable APIs—fuelling user-generated content (UGC).
  • Memorable Moment: "In retrospect it's an absolute disaster because the flag is such a user generated complex specific game thing ... Eric was very different… The power was just absolutely enormous." [24:36–26:58]

---

8. Learning from Failed Models and Systems Thinking

[26:58 – 29:53]

• Experimentation and Fast Pivoting:
  • Membership-based revenue models failed; switching to a robust virtual economy (Robux) proved transformative.
  • Key inflection: Launching the full virtual economy system, integrated with virtual currency and creator monetization, worked “within eight hours.” [29:26]

---

9. Virtual Currency and Future Use-Cases

[31:53 – 33:35]

• Stability and Future Potential of Robux:
  • Robux’s value has stayed nearly constant for two decades; David envisions a possible future where virtual currency could be used outside of Roblox, though focus remains on play.
  • Exposure to Robux teaches children financial lessons and digital literacy. [32:28–33:10]

---

10. Focus, Communication, and the Power of Words

[33:35 – 35:14]

• Simple, Human-Centric Focus:
  • Company-wide alignment is critical; focus must be easy to communicate and rally around.
  • Early company phrase "you make the game" is more relevant than ever with AI.
  • Quote: “…those words can have really big meaning.” [34:14]

---

11. AI Integration and Internal Platforms

[35:14 – 36:33]

• AI as an Organizational Tool:
  • Roblox has internal OS-like trackers with MCP/AI capabilities, supporting everything from work tracking to auto-generating 1:1 agendas.

---

12. Policy, Safety, and Regulation

[36:12 – 39:43]

• Proactive Safety:
  • Roblox uses open-sourced voice safety filters and AI-based age verification.
  • David cautions against heavy-handed regulation, advocating for industry-led standards but acknowledging the role (and limitations) of device-level controls.
  • Safeguarding younger users has short-term costs but is foundational for long-term platform growth.

---

13. Future Vision for Roblox and Digital Play

[39:43 – 44:18]

• Next 5 Years:
  • Baszucki foresees a future where photorealistic, multiplayer, creative experiences are accessible to all, almost as easily as talking about them.
  • The line between creators and users will blur; democratization of game creation likened to the evolution of photography and art.
  • Quote: “Rather than digital technology reducing the job market for oil painters, it's probably increased the job market ... I'm actually thinking the same thing will happen for gaming.” [42:11]
• On 'Ready Player One':
  • David is a “huge fan” of the Ready Player One book and prefers plausible VR/AR as opposed to outlandish or kitschy sci-fi. [43:22–44:18]

---

14. Advice for Young Entrepreneurs

[44:23 – 45:39]

• On Building Something that Matters:
  • David’s advice for a 16-year-old with no network is to follow authentic interests, develop skills as a fun side hobby, and grow confidence gradually rather than fixate solely on company-building.

---

15. Defining Success

[45:34 – 45:47]

• Gratitude and Contentment:
  • For David, waking up daily with a sense of fortune and gratitude is success.
  • Quote: "I feel waking up every day just saying, I'm so fortunate. So I actually feel that way." [45:47]

---

Notable Quotes & Memorable Moments (with Timestamps)

• “If one is not reducing bureaucracy, there's no neutral ground. If one is not trying to improve things, it is going backwards.” — David Baszucki [00:00, 06:48]
• "Three weeks in on the keto thing, was him saying, ‘Whoa, I feel a little different.’” — David Baszucki [01:32]
• "All big decisions make in the optimistic mode." — David Baszucki [05:29]
• "It's very easy to add knobs and stuff. It's very hard to remove all of the knobs and sliders." — David Baszucki [05:55]
• "Outcome over ego." — Shane Parrish [09:39]
• "...let’s identify the person who’s going to make the decision and let them be somewhat free and creative to make the decision…” — David Baszucki [10:45]
• “It’s surprising how much people can attach to their digital identity. I mean, it has to be very carefully respected.” — David Baszucki [19:01]
• “That system [creator incentives] has just been the engine behind us ever since then.” — David Baszucki [24:31]
• “I think we have a lot more optionality than we imagine.” — David Baszucki [16:28]
• “[Roblox avatar changes]...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.” — David Baszucki [19:37]
• “All of those things at the same time... within eight hours we just said, yep, we got it, like, boom.” — David Baszucki [29:26]
• “I feel waking up every day just saying, I'm so fortunate. So I actually feel that way.” — David Baszucki [45:47]

---

Key Segment Timestamps

• Mental health and keto: [00:15 – 04:41]
• Product design and simplicity: [05:49 – 06:48]
• Feedback/communication best practices: [07:21 – 09:53]
• Decision-making frameworks: [10:05 – 14:39]
• Mistake analysis: [16:08 – 17:04]
• Digital identity: [18:37 – 20:20]
• Capital allocation, incentives, and evolutions: [20:20 – 26:58]
• False starts and virtual economy: [26:58 – 29:53]
• Virtual currency principles: [31:53 – 33:35]
• Focus, communication, and AI: [33:35 – 36:33]
• Policy and safety: [36:12 – 39:43]
• The future of Roblox/Digital universes: [39:43 – 44:18]
• Advice for 16-year-olds: [44:23 – 45:39]
• Defining success: [45:39 – 45:47]

---

Final Takeaways

David Baszucki's approach to leadership is rooted in humility, self-awareness, and focusing on foundational principles—both in personal health and organizational culture. His philosophy emphasizes simplicity, continuous improvement, empowering decision-makers, and authentic connection, all while staying flexible and open to massive change on a global scale. The revelations about digital identity, robust virtual economies, and evolving ambitions for Roblox provide a rare glimpse into the operating system of one of the world’s largest user-generated platforms.

Transcript

[David Baszucki]

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

[Shane Parrish]

I want to start in an unexpected place before we get into a whole bunch of other things, but I want to talk about how keto changed your family's life.

[David Baszucki]

So this 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 ten years ago. We tried every medication, we tried every solution to get him off medication. And here we were four or five or six years later. Doctors had told him, you'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. And so you can 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, what a relief. 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.

[Shane Parrish]

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

[David Baszucki]

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.

[Shane Parrish]

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

[David Baszucki]

Luckily not either. Through some combination of, as you can imagine, here's this patient, we gotta 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?

[Shane Parrish]

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

[David Baszucki]

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 because now I think of it, it's the same as a broken arm. It's just part of your body is physically not working, just happens to be your brain. With this keto thing, I think I' 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, 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 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.

[Shane Parrish]

What's your current metabolic routine?

[David Baszucki]

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.

[Shane Parrish]

But you're not tracking your ketones?

[David Baszucki]

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 fair amount of protein, 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.

[Shane Parrish]

How does your metabolic state affect your decision making?

[David Baszucki]

I do think eating a lot of food or even, even a lot of carbs, we can all feel that kind of slow down, kind 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, 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.

[Shane Parrish]

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

[David Baszucki]

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.

[Shane 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 counter force almost to get rid of that.

[David Baszucki]

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.

[Shane Parrish]

How do you give feedback to people?

[David Baszucki]

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.

[Shane Parrish]

How would you think that people receive that feedback?

[David Baszucki]

I think that feedback is hypertone 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. So, 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.

[Shane Parrish]

I like the idea of tonal because so often, 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.

[David Baszucki]

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

[Shane Parrish]

Do you recognize it?

[David Baszucki]

Oh, yeah. Just red alert. Do not send that email to you

[Shane Parrish]

or the one that you're about to send?

[David Baszucki]

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. Because 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, 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.

[Shane Parrish]

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

[David Baszucki]

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

[Shane 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?

[David Baszucki]

Oh, no, 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 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.

[Shane Parrish]

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

[David Baszucki]

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 is 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.

[Shane Parrish]

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

[David Baszucki]

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 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 a very fast programmer art avatar. To get something working, its proportions are ridiculously simple. 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 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. And we found out actually that a lot of the input we had been getting, thank God we didn't listen to that. Basically.

[Shane Parrish]

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

[David Baszucki]

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

[Shane Parrish]

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

[David Baszucki]

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 magic safe quadrant. All of the other quadrants have a little weirdness to them when things aren't

[Shane Parrish]

working the way you want them to. What's your inner monologue in Those moments,

[David Baszucki]

interestingly, I think when we're running companies, we have all the evolutionary biology of being out there in the wilderness, trying to survive and 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, 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, 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.

[Shane Parrish]

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

[David Baszucki]

We, we are running right now. A, 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?

[Shane Parrish]

Do you analyze your mistakes?

[David Baszucki]

Yeah.

[Shane Parrish]

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

[David Baszucki]

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

[Shane Parrish]

Say more about that.

[David Baszucki]

One can fall into the trap of just saying 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 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 every

[Shane Parrish]

few years, a new platform earns its place at the top of every smart advertiser's media plan. The people who find it early build advantages that are very hard to close. Apple Oven just had the most remarkable run in ad tech history and now they've opened that engine to businesses like yours. Over a billion people play mobile games every day, focused, not scrolling, with no feed competing for their attention. Applovin puts your brand in front of the right customers and optimizes purely for your growth. Brands like Wayfair, Kitsch Ridge and Nectar are already scaling on it, while most of their competitors don't even know it exists. Ready to find your next million customers? Go to applovin.com shane and launch your first campaign today. Let me tell you about the best new product that I've used in the past five years. It's the Matic Vacuum. This thing vacuums, it mops. Matic does everything. Other robots bump into things, but the Matic sees things. It actually avoids the problems. And the Matic automatically adjusts between my carpeted surfaces and my hardwood floors. It's also super easy to schedule. I have it run every night while I'm in bed, and every morning I wake up to clean floors. Messes happen. And when they do, Matic rolls into action. Go to maticrobots.com today and put Matic to work for you. Is it fair to say that Roblox is the biggest generated human universe in the world?

[David Baszucki]

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.

[Shane Parrish]

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

[David Baszucki]

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.

[Shane Parrish]

Say more about attaching to your virtual identity.

[David Baszucki]

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.

[Shane Parrish]

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

[David Baszucki]

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 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.

[Shane Parrish]

Go deeper on that.

[David Baszucki]

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. 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. And I think you'll continue to hear us kind of expand our ambition.

[Shane Parrish]

What percent are you now?

[David Baszucki]

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%.

[Shane Parrish]

That's amazing. That's incredible.

[David Baszucki]

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%.

[Shane Parrish]

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

[David Baszucki]

I think we got really lucky in being really fascinated with incentives. And I think very early on when we started building roadblocks, 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. That did prove to be really true. Along the way we had a lot of questions around economic incentives. And 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 love their Roblox creation. They're struggling like well, I got to make a living. I just want to build on Roblox. So we had a lot of board level discussion. Should we turn this into something where someone could make a living? We actually, in retrospect it's crazy. Wim went back and forth a lot like we, well, I'm not so sure we should do that. But we did come up with the 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 247 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.

[Shane Parrish]

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

[David Baszucki]

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. Along the way we tried to ship early a subset of that and just blew it 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. In retrospect it's an absolute disaster because the flag is such a user generated complex specific game thing for Me to have put that deep into our core stuff was just terrible engineering. Eric was very different. It's like, whoa, whoa, whoa, don't do that. Like we need 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. You know, rather than my hard coded 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.

[Shane 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 along

[David Baszucki]

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 roadblocks. 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, 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. 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 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. This was like this could be a hundred times bigger than what we're doing. And so then all of a sudden, like maybe in a disparaging moment, like just, 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 a eagle instead of a sparrow, 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 were like, oh, I gotta add this, I gotta do this. There's the top grossing game on Roblox. People are actually interested in that.

[Shane Parrish]

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

[David Baszucki]

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.

[Shane Parrish]

That's awesome. Yeah. I built an AI version of myself with heygen. Today. I'll have it dig up an old prediction I made and we'll each grade it. Let's give it a shot. Hey, Shane, you once predicted that long form would beat short form for anything that actually mattered. Grade that prediction today. Hey, I was directionally right. But I underestimated just how much short form would become the front door to long form content. I agree. You were right. But for the wrong reason. You thought attention spans would recover. They didn't. People just got better at choosing when to go deep. Right? Call lucky logic. Well, I got the right answer with the wrong math, but I'll take it. That's Heygen. Record yourself for 15 seconds and get an AI avatar that delivers professional video on demand. Your first three videos are free at Heygen.com TKP that's H E-Y-G-E-N.com TKP ever hit 3pm and feel like your brain just quit? For a lot of people, that's not caffeine or sleep. It's electrolytes. And water alone won't fix it. That's why I drink Element every day after lunch. Zero sugar, no dodgy ingredients, just a real dose of sodium, potassium and magnesium. I know you're all thinking electrolytes are for athletes, but you don't have to be an athlete to benefit from it. And it tastes great. Stay sharp in the afternoon and grab a free 8 count sample pack with any purchase at drink element.com TKP that's drinklmnt.com TKP 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?

[David Baszucki]

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 Roebucks, we would see it's generally somewhat like a penny per Roebuck. It's generally been that way for about 20 years. So I would say that's 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.

[Shane 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?

[David Baszucki]

I do see that world. No future plans. We haven't announced anything. It's interesting to think that many, many 8 through 12 year olds, their first exposure to money is Robux. So I do think for many young people 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 711 or something, what would

[Shane Parrish]

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

[David Baszucki]

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.

[Shane Parrish]

What does focus mean to you?

[David Baszucki]

I think one way to think about focus is, is there one statement in your head that everyone in the company can just understand and 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 that's a little bit. How easy is it to present it or share it?

[Shane 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.

[David Baszucki]

I'll use an example, very early on in the formation of the company, when we were very small, we used the tagline you make the game. That was 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 meaning. So I think, 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.

[Shane Parrish]

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

[David Baszucki]

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

[Shane Parrish]

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?

[David Baszucki]

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, 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, 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.

[Shane 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 that.

[David Baszucki]

This what 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 who 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.

[Shane Parrish]

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

[David Baszucki]

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.

[Shane 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.

[David Baszucki]

Yeah, I would say this is once again where our aspirations are. Like we think digital play is just amazing. We shared we're in the 3 to 4% of the world right now, imagining what the future is going to be for the types of 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.

[Shane Parrish]

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

[David Baszucki]

I'll share a couple 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. 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's not like Bourne Identity, you know, and. Whereas if we ran Bourne identity on a 2K screen, 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. 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. This episode is brought to you by Accenture.

[Shane Parrish]

When your advertising operations fall out of

[David Baszucki]

sync, everything else follows.

[Shane Parrish]

Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics and smarter workflows to simplify campaign delivery and access better data across the business.

[David Baszucki]

The result?

[Shane Parrish]

Less time spent on operations, more time

[David Baszucki]

connecting brands with the moments and fandoms that matter most.

[Shane Parrish]

Learn [e-mail] Spotify I think that that's incredible. What do you think will be the second and third order consequences of that?

[David Baszucki]

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, and we're all kind of feeling like we're part of it. And in a way, rather than 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 both the hardcore creator market and all of us will be more involved in the creation of immersive experiences.

[Shane Parrish]

What was your reaction to watching Ready Player One?

[David Baszucki]

Ready Player One, the book I loved. The movie V1 I love, but I do like 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 it like takes over your 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, like the more real and the less comedy or Klitschy 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.

[Shane Parrish]

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

[David Baszucki]

Hi, 16 year old.

[Shane 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?

[David Baszucki]

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, hanging out with people I liked. I was into what naturally I was good at and interested in whether it was building model rockets or go karts. So I think if one is 16 and actually that's like what you're into, 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?

[Shane Parrish]

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

[David Baszucki]

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

[Shane Parrish]

What goes into that feeling?

[David Baszucki]

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