How A Gaming Pioneer Built A $38bn Platform Used By 75% of US TweenagersMar 16, 2021
David “The Builderman” Baszucki might have been considered delusional in college in the 1980s. Back then the thought of a platform where average people could build and run their own experiments online was unthinkable.
Yet David wasn’t just a student with a big idea. He was a fascinated electrical engineer who had the ability and tenacity to make it happen.
The fact he chose to name his first company Knowledge Revolution says everything about his mindset. This company won many awards for innovation before being sold for $20 million in 1997.
Yet his dream remained unfulfilled, so he founded Roblox in 2004. Again, the name is telling, with a combination of “robots” and “blocks”. The company’s focus was on gaming as the perfect playground to let people run virtual experiments.
Roblox empowers users to create their own games and make money off them as YouTube does for video content. They keep a share of the income the game developers make by selling their creations and have premium subscriptions.
After 17 years, there are now 37 million daily users, with 8 million developers making games on the platform. I was amazed I’d never heard of it until it came to IPO in March 2021, where it immediately rose to $38 billion. Maybe I’m showing my age as 75% of Americans aged nine to twelve use Roblox!
Builderman’s story is one of perseverance in chasing an impossible dream. The crazy thing is he’s only getting started and we may one day consider him in the same breath as Bill Gates and Steve Jobs. If he achieves what he hopes to, he may even outshine them.
There’s a misconception that billionaire entrepreneurs all have the Midas touch and know everything in their 20s. Young tech billionaires are anomalies, and this makes them newsworthy, so we hear about them far more often than is proportional.
David was never too concerned with becoming rich, but he was with using technology to change the way we live. Roblox is pushing the boundaries whereas some startups are marketing engines for existing technology.
It’s no wonder FastCompany calls Roblox one of the ten most innovative companies when you think about the expertise David has built up over time.
Young founders can be terrible CEOs because they are thrown into the deep end with little experience in managing teams. They go from being in charge of a small group of people to hundreds in a few short years.
David is an exemplary CEO at 58. 98% of employees approve of his leadership and he has won awards two years in a row for championing diversity in his company. He didn’t take the fastest route but he learned a lot of lessons along the way.
I joined Clubhouse last week and almost everyone seems to be a founder of some kind. If you follow through to their Instagram accounts, you’ll see they’ve clearly spent a lot of time on their branding, but not so much on their product. I may be guilty of this myself!
Roblox’s logo is a throwback and stands out where everyone else is using the same fonts and styling. It seems like more of their energy goes into their actual product than the public perception of it from the outside.
David didn’t seek press in the early years of Roblox. It’s led to the misconception Roblox copied Minecraft when in reality, it came first! Despite raising millions in the early years, there aren’t many interviews with the founder from that time. Sadly, David’s co-founder Erik Cassel passed away in 2013 from cancer.
Since then David has increased his press presence, but it’s still tiny compared to other more outspoken founders who have far less impact. What shines through in every interview is David promoting his product with enthusiasm rather than seeking adoration as an entrepreneur.
It’s refreshing compared to others who talk about themselves constantly. I have much to learn!
Roblox is a robust business for David, but the effect on the next generation of developers will be the stuff of legend. In the early stages, Roblox was building its own games too but it’s now all in the hands of users.
“We quickly realized what they were building was much more interesting and engaging than anything we could ever make.” — David Baszucki
Take the Horton twins who first created a game together when they were 13, using Roblox. In the seven years since their games have been played over 100 million times. They both earn well over $100k each already.
There are around 300 other developers who make at least six figures a year, as well as 1250 making five figures. There are millions of other children who are learning to code for the first time using the platform. Most new tech entrepreneurs in ten years will have been at least partly inspired by Roblox.
Talk about impact!
It’s a virtuous circle. If Roblox can incentivize people to create their own games then there are always new games to attract more players. More players mean more people are tempted to try their hand at creating their own game. The network effect is powerful and the pandemic helped to double the accounts in the last year.
Some platforms seem to interfere to try to push favorites whereas Roblox seems refreshingly like a true meritocracy. They paid out an incredible $328.7m to developers in 2020.
On hearing David talk, you’d think what he’s achieved so far is like going for a Sunday stroll. It’s only the foundation for the tower block he plans to build.
It centers around the metaverse. A place where people can do everything in an online virtual world including learning, hanging out, and working. People won’t just build games, they’ll build their own cities, all with a functioning economy.
There are two key opportunities for Roblox:
- Virtual Reality and Augmented Reality equipment will become more accessible in the next few years. People will feel like they can walk into a Roblox world and be teleported into another dimension.
- Only a third of Roblox users are over 17 and it has 100 million accounts. The adult population is a massive untapped user base and as current users age, they naturally expand their share. Early investor Brad Gerster expects a billion users in a few short years even after a post-pandemic deceleration.
The market potential of the metaverse is almost unlimited and it’s going to be exciting to see if Roblox can deliver. Of course, they aren’t the only players but they have a headstart and no other platform has something resembling the rewards for developers they offer.
I won’t be betting against them.
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