Roblox Founder and CEO Says ‘Trust Your Gut’

Full Transcript

Note: This transcript was generated by an automated system and has been lightly edited for clarity. It may contain errors or omissions.

Jeremy Tepper: Welcome to View From The Top: The Podcast. I’m Jeremy Tepper, an MBA student of the Class of 2026.

Michael McDowell: And I’m Michael McDowell, a producer at Stanford Graduate School of Business. Jeremy, who’s on View From The Top today?

Jeremy Tepper: Today, we have Dave Baszucki, founder and CEO of Roblox. Dave founded Roblox in the early 2000s. It was an early metaverse. He really had a forward-thinking vision for the world connected online. And today, Roblox is more than a gaming platform. It’s a platform used by most American kids to connect and build games, and it’s really a digital economy.

Michael McDowell: Right on. So why did this conversation with David Baszucki feel particularly relevant now?

Jeremy Tepper: Well, I think first off, Roblox is a platform that is so ubiquitous in Gen Alpha. Kids between ages 8 and 15 in America are mostly on Roblox. And they’re using it not just for gaming, but also to connect with one another, to build, to learn how to code for educational purposes. So it’s a really critical platform in the next generation. But I think the second reason is Dave had a really remarkable forward vision: to have imagined this digital economy in 2004 is just remarkable, and he did it with very little capital. So I think for the next generation of entrepreneurs that are hoping to build something without having to raise a ton of capital and looking 10, 15, 20 years ahead, Dave is this incredible example.

Michael McDowell: Really interesting. I want you to tell me a little bit about the beginning of the conversation. You showed an image. I’d love it if you could describe it for our listeners who might not be able to see it.

Jeremy Tepper: Dave graduated from Stanford in 1985. Stanford undergrad. He was an engineering major. And it’s a picture of Dave wearing old Ray-Ban Wayfarers with swooped-up hair. It looks like he’s in Grease, the movie, or something.

Michael McDowell: Yeah.

Jeremy Tepper: It’s a great picture and it captures Dave’s personality. He’s the kind of person who really loves play and he talked, at one point in our interview, about how he wanted to run a company that’s fun to run because that makes him a better entrepreneur. So I thought that picture was a great place to start for that reason.

Michael McDowell: Well, I think it was a great way to queue up a fantastic conversation. Are you ready to press play?

Jeremy Tepper: Let’s do it. Press that button.

Jeremy Tepper: Dave, welcome back to the farm.

David Baszucki: Jeremy, thank you for having me.

Jeremy Tepper: Thanks for being here.

David Baszucki: Really appreciate it, and all of your prep and all of this.

Jeremy Tepper: Thank you. Oh, it’s an honor to have you here.

David Baszucki: Yeah.

Jeremy Tepper: We’re really excited for it. I wanted to take you back to where it all started. It’s 1985, and this is the James Dean look.

David Baszucki: I think that’s the Stanford yearbook in 1985.

Jeremy Tepper: Yeah. You’re majoring in electrical engineering.

David Baszucki: That’s correct.

Jeremy Tepper: Yeah. Future, to be determined.

David Baszucki: I had no idea.

Jeremy Tepper: No idea.

David Baszucki: That’s correct. With a lot of mechanical engineering and design stuff, too.

Jeremy Tepper: Wow.

David Baszucki: That was the foundation of the iLab back then-

Jeremy Tepper: Cool.

David Baszucki: And David Kelley, all that. So I took a lot of that, too.

Jeremy Tepper: I just want to put the audience in this moment for a second. It’s 1985, right? First ever internet domain name was registered. Microsoft launched Windows 1.0. Tetris was invented.

David Baszucki: That’s right.

Jeremy Tepper: And Back to the Future was the movie of the year, Marty McFly. So the look makes sense.

David Baszucki: Thank you. Yeah, the Mac had just come out. I had a Mac Plus. You would switch floppies, dot matrix printing, just right on the edge of a lot of interesting consumer software stuff.

Jeremy Tepper: Yeah. It was an exciting time, obviously, to be building a company.

David Baszucki: That’s right.

Jeremy Tepper: Did you know at that moment that you were born to be an entrepreneur? Is that where it all started?

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 this summer, I had no idea what I was going to do that summer. Some other student in my freshman dorm, it’s almost like in The Graduate where they say “plastics,” they said window cleaning. So someone said window cleaning to me. I went home for that summer. My brother and I spun up this window cleaning business. We just made buck. We went knocking on doors in the evening. We just say, “Hey, we can come wash all your windows and just work all summer.” So there was a little bit of that, but I would say following the graduation, 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.” And I think when I went to find a job, I was a little lost. It just didn’t land in my lap in a way.

Jeremy Tepper: Yeah, that is really difficult. A lot of students here are kind of grappling with what they’re going to do after their two years here. So we’ll get into that a bit.

David Baszucki: Yeah.

Jeremy Tepper: So you start with the window cleaning company and then you actually naturally progress to Knowledge Revolution, the physics software simulation platform. So that’s a natural progression.

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. So two years of massive disappointment, arguably myself not figuring out how to go to companies I loved and kind of moseying all around. I can remember calling my dad and just not believing how terrible my predicament was. So after a couple of these jobs, I took some time off and I would say flipped to a different mode, which was intuitive mode. At that time, it was the Apple II and then the Macintosh and educational software. And I made a much more intuitive mood, just like, “I’m going to get into educational software.”

Jeremy Tepper: Wow. So it’s obviously an exciting time to be doing that. You co-founded the company with your brother, Greg. And later, Erik Cassel joined and he would go on to co-found Roblox with you.

David Baszucki: That’s right.

Jeremy Tepper: 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?

David Baszucki: I would say, a lot of luck actually. I think that the ecosystem today is so much more sophisticated about finding adjacent people and amazing co-founders. On the Knowledge Revolution side, I wrote the first vision of this thing called Interactive Physics. It was like an old physics laboratory simulator type thing, and it got some traction. The way we found Erik is he saw a review in MacUser magazine, literally. He was a physics major at Cornell University, absolutely brilliant. He called me up, he flew out from Cornell and he joined us. So literally, serendipity.

Jeremy Tepper: Wow. A little bit of luck, but also some openness to what the world may bring you.

David Baszucki: Yeah, absolutely. And then he joined us in that company. The vision of that company was educational software. We built this really amazing physics simulation stuff. And for a while, it was used with every textbook and all of that. And then we, I would say, typically made a terrible decision because a lot of people like to play with it and we’re talking to all kinds of gaming companies. It was really fun, but we made more of like a, “Oh, the technology’s really good. Let’s get into mechanical engineering,” 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 Tepper: Yeah. Suffice it to say, Knowledge Revolution was a big success without raising any capital. You sold the business for $20 million and this is in 1998.

David Baszucki: That’s right.

Jeremy Tepper: What did you learn from that first company-building experience that you took forward with you?

David Baszucki: Well, I learned to… I think one really big picture thing that… We learned we could really intuit the customers for the educational software business. We were in touch with them, we could understand who they were, we could match the software exactly to these customers, and we arguably could have intuited a continuation of those customers into what Roblox became. But instead of using that intuition, we moved into this more, once again, mechanical engineering thing. So I think we went back to that learning after we sold it, and that kind of led to the genesis of Roblox. So I think maybe a Stanford biz school thing would be like, if you have deep empathy, connection with a certain customer, that’s extremely valuable.

Jeremy Tepper: Yeah. That ends up being a huge part of the Roblox story and the connectivity you have with your community.

David Baszucki: That’s right.

Jeremy Tepper: Between the two companies, you, your wife, Jan, and your three kids… Jan’s here.

David Baszucki: Yay.

Jeremy Tepper: Your three kids, I think aged five, two, and maybe three months at the time. You picked up and you did a road trip across the country in a mobile home.

David Baszucki: That’s right.

Jeremy Tepper: Why?

David Baszucki: I feel like this is one area where we were ahead of our time, right?

Jeremy Tepper: Yeah.

David Baszucki: Now, in my neighborhood, depending on where you live, I think there are nine Sprinter vans in my neighborhood, little RVs. It’s getting more and more hip. But we had a lot of relatives in Canada up through Minnesota, all of that. It was just kind of maybe a palate cleanser after all of that, just what’s the most radical thing to do. So, got this big 40-foot RV, towed to a car, went all over the place. I’ve always been into that kind of thing. For a while, I did a stint as a talk radio show host in Santa Cruz. A couple of those things you get out of your system kind of thing. It was an amazing time.

Jeremy Tepper: Before you build the multi-billion dollar companies?

David Baszucki: Yeah.

Jeremy Tepper: Yeah, that makes sense. So, a lot of the students here today, we’re 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. So what did you learn from that break and how would you advise folks here on how they think about that —

David Baszucki: I think I’ve learned it twice actually because I can remember in this terrible time right out of college, trying to figure out what I was going to do. 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 like, “Well, if this is it, it’s really good for this, but it’s not so good for this.” It was a really weird way to try to figure out your career. And then, I would say, after the selling of Knowledge Revolution, 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. I just sold this Knowledge Revolution, but it’s interesting. Not everyone’s calling me to be this CEO of this company. What’s going on?”

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. I was just really interested in 3D simulation, consumer software, all of that kind of stuff, and here I was poking all the way on the periphery of it. I literally remember I had what I felt like was some vision where what I was doing was just never going to work. And I had to go back to what I was really fascinated with, which was I would say an extension of Knowledge Revolution, bigger, better, multiplayer, consumer, fun, all of that. That was a much riskier direction, but it seemed like the direction I had to go.

Jeremy Tepper: Yeah. 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. So after the sabbatical, you guys launched what was initially a puzzle game called DynaBlocks.

David Baszucki: That’s right.

Jeremy Tepper: And then you took it down and relaunched it nine months later in what eventually became Roblox. So for the folks here that are launching their first version of their product, what advice do you have on when to kill it and rebuild?

David Baszucki: So a couple of good things happened. We had had the Knowledge Revolution experience and we realized even with this very simple 2D physics simulator, it was right there in front of us. It’s like, “We got to be cloud, we got to be multiplayer, we got to be 3D, we got to be simulated.” We think that’s going to be interesting. 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. We were also thinking if we can build this thing out completely horizontally, get all the aspects of it, it’s going to be pretty interesting. It was a time when we were not alone in these ideas. Second Life was popping out, and There.com. There were a lot of these companies trying to figure out what this thing was going to be.

And what we did initially is we had this whole version and said, “Let’s do a really subset of it. Let’s just do a 3D puzzle thing along that thing,” because 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. So we do the puzzle thing and we invited maybe a hundred people. And two weeks later, no one’s using it. It’s like, “What do we do? This is very depressing.” Maybe someone says, “Oh, I used it for 15 minutes, that was great,” kind of thing. So then, it was a big decision, but I think intuitively we knew that was not the complete product. The complete product had to be multiplayer and people making stuff, and people playing in it and all of that. So that was a bit of a time like, “Yeah, honestly, we knew it.” We’ve got another nine months here or a year to build this thing. So we just shut it down, keep going, and relaunch a year later.

Jeremy Tepper: So if you’re not getting the usage, you restart, you rebuild.

David Baszucki: I think in this case, it’s a subtle nuance. If the big vision is right and you can just see it, we had enough fortitude to say, “This big vision is absolutely spot on. We’re going to suck it up for another 9 to 12 months.”

Jeremy Tepper: 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. What made it fundamentally different from gaming platforms and social media of that time?

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 going to be some natural technology evolutions that are just inexorable. This is going to just happen. We’ve seen that before with the telegraph system, we’ve seen it before with the telephone system. At that time, we’re starting to get into text. Video was still a world’s fair in everyone’s imagination. Gaming was starting to get a little bit multiplayer. So we knew, I think fundamentally, that 3D simulation could be a communication platform. This could be a way that people ultimately go to school or work together, or those kinds of things.

And the gaming market was showing some of that technology, but it really wasn’t fully user generated. It wasn’t just you build whatever you want. It was very pre-canned. And user generated is really… it means self-service or whatever you build can go live. So we were kind of seeing the combination of that, self-service, whatever you build can go live. I think that was a big… Arguably, Second Life was doing that, There, we were doing it, I think, in a much more scalable, kind of sustainable way.

Jeremy Tepper: 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.”

David Baszucki: That’s right.

Jeremy Tepper: And I got to imagine people are like, “Dave, this is crazy. What are you doing here?” So how did you continue to forge on despite the doubters?

David Baszucki: This was very different than the puzzle game. 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 going to use S3 that just came online. We’re going to have a development environment. We’re going to have all these clients. We’re going to have all of that stuff.” And we had a little bit of the philosophy, “Everything’s going to be very rough, but we’re going to get the complete product to feel it out.” So you are right.

Everyone we would talk to or show it to, “This looks like crap,” or, “This is like… No, this has got to be prettier,” or all of that. But something really magical happened and that is the day we launched the ability for people to create stuff. At that time, we maybe had one or 200 users. We just knew we had hit virality. So after all of those other experiences, we knew probably within four hours, just like, “Okay.”

Jeremy Tepper: In four hours, you could just see it.

David Baszucki: That’s right. 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. That was going pretty good. But then, when we launched user-created content and self-publishing, we saw within four hours, just creation, creation, creation. There were four of us in an office and we kind of that night knew like, “Okay.”

Jeremy Tepper: Wow.

David Baszucki: Yeah, it’s pretty good.

Jeremy Tepper: So it’s four of you in an office in Menlo Park.

David Baszucki: That’s right.

Jeremy Tepper: Maybe, actually, let’s fast forward a few years. It’s now maybe 2007 and Roblox usage is up. You’ve seen that virality, but the economy is starting to show some signs of weakness. And you guys are starting to think about monetization in a more thoughtful way.

David Baszucki: That’s right.

Jeremy Tepper: I think I’ve heard you say that’s a near-death moment for the company.

David Baszucki: That was one of several, right? That would be a moment-

Jeremy Tepper: Do you want to go through all of them?

David Baszucki: Well, no. 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. This is so hard.” But at the same time, I can remember us… We had a problem where users was growing like that, but dollars per user was going like that, so dollars was flat. So users is going up, dollars is flat. That means you’re spending more on infrastructure, all of that. So that’s a bad situation. I think we did what the traditional response would be. The traditional response is, “What did we break?” or, “Oh, my gosh. There’s so many ideas we can do to improve monetization.” We have a list of 50 of them, and so we did that initial, “What’s the bang for the buck of all the 50? Let’s figure out everything that’s broken.”

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. And the big thing is, “Let’s build a perpetual motion machine where creators can earn money and sell stuff and all of that.” But that would seem like a little too hard, and so we actually didn’t consider it. We spent three or four months churning on all this stuff. But sure enough, four months later, just like, “It’s not getting better. We’ve done 15 or 20 of these things.” And then it’s like, “Okay, you’re right. We got to go do this big thing.” But then that clarity, it kind of put a skip in our step. It’s just like, “We’re giving up on all of the things we broke, we’re giving up on all the tactical stuff, we’re just going to go hardcore and build this full virtual economy as fast as we can.”

It had to be a complete product, right? 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 acceleration, so that, woah some of the devs who are making money get more visibility. We kind of felt it was like some closed loop operational amplifier. If we had all of these pieces, it might just go viral again. 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 going to work.” Because every dev just says, “Oh, my gosh. I could make a living. I’m going to sell a flashlight in my game,” or, “I’m going to sell a motor scooter or something.” They started bubbling to our discovery system. Users started buying the virtual currency. It just like-

Jeremy Tepper: Wow.

David Baszucki: So we kind of relived that lesson all over again.

Jeremy Tepper: 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.

David Baszucki: That’s right.

Jeremy Tepper: You guys start generating revenue in a big way, but still over the coming decade or so, you guys face wave after wave of would-be Roblox killers. So that’s Minecraft, that’s Fortnite.

David Baszucki: That’s right.

Jeremy Tepper: So what did you decide to do and critically what not to do as each competitor emerged?

David Baszucki: Yeah, I can remember… So the good news is when Minecraft came up, for example, we had in the pipeline and behind the scenes, arguably, five to eight really big technical innovations. We were thinking out of the box on this. We were thinking auto-sharding in the cloud, we were thinking multi-device, we were thinking super stable APIs, we were thinking to build it, we were thinking Lua language, we were thinking abstraction, we were thinking coming mobile. They were all kind of bubbling under the surface. But then yes, sure enough, when Minecraft came out of the woods, just… We kind of lived through, I would say, a two to five-year Minecraft craze, just like that was there. But behind the scenes, their pipeline of innovation was nothing like ours. We had an experience four weeks ago that 25 million people at the same time were playing. And that was all based on a sharded cloud super pipeline, really infrastructure abstraction in a way, and augmentation with our infra, so we could burst into the cloud as well, but they weren’t doing any of that sharding kind of stuff.

They split their platform. They had like a Java edition and a Windows thing. We thought it was all developers, all stable APIs, like the DOS prompt kind of thing. So we knew we had that coming. We knew we were going to try to run the same thing on mobile as PC. So sure enough, behind the scenes, all of that innovation came to play. And then the same story actually happened with Fortnite probably four or five years ago. Fortnite came out of the blue, Epic Software just to be this giant gaming platform, and the same thing like, “Whoa, this isn’t fair. How come that thing’s so big all of a sudden? We’re working really hard.” But also arguably, once again, a beautiful product in the spirit of doing less more. Arguably, really hard to manage both a C++ engine, a store, a product called Fortnite, trying to do all of these at the one time, whereas we were just 100% all in on this kind of single platform. So I think over time, that focus for us and a lot of innovation once again brought us to where we are.

Jeremy Tepper: Yeah. You guys really doubled down on infrastructure, and I know concurrency and your ability to serve concurrent users only continues to grow.

David Baszucki: That’s right.

Jeremy Tepper: You outlasted each of the fads, and I want to just contextualize what a global behemoth Roblox is today. Almost 400 million monthly users, billions of hours spent on the platform each quarter. Three out of every four American kids between the ages 9 and 12 plays Roblox regularly. So at this scale, you’re in a different league. You’re competing for attention now with Meta, TikTok, YouTube. So how do you balance competing for attention with this societal concern around screen time, in particular for young kids?

David Baszucki: Yeah, that’s really interesting. One way to put it in context for all of our investors out there is the global gaming market’s about $190 billion market. We’re probably running 3% of that through Roblox. So it gives a sense of the potential scale here and what the opportunity is as well. A couple of thoughts on this. In the midst of COVID, something really interesting happened. We had had this vision that we’re not really a solo consumption platform, we’re not really an image sharing platform. We really are, arguably, the future of the phone system or the future of how you stay in touch with someone else. Just like there’s once the phone system, someday there’ll be the Holodeck. 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 the Holodeck to stay connected in COVID.

That was really a playing out of the thesis, I would say. 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. There’s some pretty cool advantages of the communication platform. I think, when I was in high school, we had the phone. And on a rainy day, we could call people up. So there’s a little bit more of a social engagement aspect to that. I think there’s a little bit of a STEM, art design/production, business kind of aspect to that. But I would say, at the same time, 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, “How could you say that, Dave Baszucki?” But we really do believe that. We think we’ll work with parents to be this great communication platform, which is I think a little different.

Jeremy Tepper: Yeah, I think it’s a very fair point. Not all screen time is created equal, and the types of activities kids are doing on Roblox is maybe a bit different. I want to keep going on this child user and particularly safety challenge that you guys are addressing right now. So eleven days ago, the Texas Attorney General filed a lawsuit against Roblox. 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.” This is one of a few lawsuits the company is facing. So when engagement and safety pull in different directions, which way do you go?

David Baszucki: We always go safety, and arguably, Ken Paxton in Texas, attorney generals around the country, senators we talk to, whatever, they’re really ultimately all trying to go for the same thing, which is child safety. And it’s a fairly sophisticated situation. A lot of parents right now are not super aware that if you give an 11-year-old a phone, there’s a lot of apps that are unfiltered, images can be shared on those apps, they’re not monitoring for critical harms, all of that kind of thing. We’re actually trying to educate the industry about this. We actually think it’s interesting that device manufacturers don’t have ages on their devices. Small world, right? Today, I was on TV three times, talking about how we’re going to innovate with age estimation for every user on our platform. So I’m very optimistic, ultimately, about the industry learning about how to keep kids safe. I think we have to design our product assuming an 11-year-old is just handed a phone right now, and I think we’re innovating in a super good direction there.

Jeremy Tepper: So I want to keep going on this because 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.

David Baszucki: That’s right.

Jeremy Tepper: 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?

David Baszucki: Yeah, 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. In a company that’s functionally architected where there’s just 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?” We have much more moved to… We need to have completely dedicated safety stack. We need to know 100% product, 100% engineering, 100% live ops, who are all of those people and where are they. And at the executive level, make the decision on the headcount, like that is pure safety people. I would say, there’s adjacent groups as well in our company, both the user group and others that touch on it. So I think it goes straight to the architecture of the company, the size of that safety group and how we architect it.

Jeremy Tepper: So it’s actually organizing specific teams, so that they have these priorities-

David Baszucki: It’s literally like we can measure the size of the company, called Roblox Safety, within Roblox.

Jeremy Tepper: Wow. Now as a public company CEO, you deal with challenges like this one on safety and I’m sure many others-

David Baszucki: I would say, the safety one, I want to highlight it. I think it’s actually an opportunity, not a challenge. Because we’ve started 6 through 60 and we’re so focused on this, including all we’re doing, age estimation and other things. Long term, we are going to have this amazing audience of six through 13-year-olds. It’s very difficult for other companies to kind of get to… and a lot of our 15-year-olds and 20-year-olds have been on Roblox since they were 12. So I actually think it’s a long-term growth opportunity, as well as maybe a ethical moral responsibility.

Jeremy Tepper: Let’s stick with it because I like that a lot, this notion of responsibility. I know it’s one of the core values at the company. You guys talk about, “We are empowered and responsible for both the intended and unintended consequences of our actions.” So you talked about parents having a choice.

David Baszucki: That’s right.

Jeremy Tepper: Where does your responsibility as a platform begin and end?

David Baszucki: Yeah. I think in this case, our responsibility goes beyond financial or legal. For me, obviously, financial gains in making Roblox awesome. Typically, on the legal side, we want to be way ahead of that. We want to be building stuff that might get wrapped into law five years later. We don’t want to be waiting. Once again, what we’re doing with age estimation, there’s no law that says we have to do that. We’re just doing that right now. But I do think there’s another element in running the company and just, “What’s a fun type of company to run?” Roblox is a pretty fun company to run, and it’s fun to sleep well at night and have a good time. So running the company on that third component, which is just what feels values aligned, is also very important.

Jeremy Tepper: Well, it’s a fun company to run. 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. What’s the biggest change you had to make in yourself, personally, to scale from being a founder to a public company CEO?

David Baszucki: That’s a really big question, right?

Jeremy Tepper: Yeah.

David Baszucki: My job is a constant re-architecture of myself, really. It’s a lot. And I feel it hasn’t just been a business journey, it is like a personal journey. I think learning where to put your strengths, learning what you’re not good at, adjusting. I’ve made a lot of adjustments. I think in the early time of a company, you can be yelling and screaming and going crazy and upset, and all that. As you get to bigger scale, I think you got to be a little more zenned out and kind of more jiu-jitsu in your application of your making things happen. I think one of the biggest things for me is actually trying to be more intuitive on people and what we do as the company and less analytical, because 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.

Jeremy Tepper: What does it look like to be zen at a company that has thousands of employees?

David Baszucki: 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. That is not going to scale,” thoughtfully thinking through, “How am I going to optimize the delivery of this message?”

Jeremy Tepper: So the intuition is there, but you don’t let it speak freely at all times.

David Baszucki: That’s correct. Actually, I’m going to look at everyone in this room. And rather than say, “That sucks,” I’m going to, in five words, try to optimize the change, all of that.

Jeremy Tepper: We’ll be back with more of Dave Baszucki after this.

Jeremy Tepper: Well, it wouldn’t be 2025 if I didn’t transition us to talking about AI.

David Baszucki: Yeah.

Jeremy Tepper: We got to do it.

David Baszucki: Let’s do it.

Jeremy Tepper: Let’s do it. Every company is racing to adopt AI, and they’re trying to convince investors that their businesses will improve as a result of AI. 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?

David Baszucki: It’s really exciting. I think there’s obviously a lot of froth in the true frontier, three or four companies that are going for super intelligence, whatever. But I think there’s a whole other dimension out there which is just radically accelerating your business. And for our business, we have a huge AI team. We’re running over 400 different models that we’ve built. Everything, tech safety, voice safety, search and discovery, 3D generation, you name it, super broad. What’s interesting for us in AI is, I would say, there’s been maybe three or four waves of AI for our company. Wave one would be behind the scenes. Everything’s getting better without the customer really knowing it, safety, filtering, all of that. Wave two is starting to see early signs of generative AI. 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 going to be transformative. We’re going to see new types of games.

I think that the next one though, beyond that, is going to start to be virtual avatars, doppelgangers, assistants, all of those kind of things. I do think the architecture of these types of platforms will be… 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 because I can’t do it,” and it’d kind of be pretty close. Or there would be someone who I could give some commands to and they would go do stuff. So I think the future for us will, in addition to 3D generation, be literally virtual humans in Roblox creation type of thing. I think that area is super hot. We have people building robots. We have people trying to do world models. We have all of that kind of stuff.

Roblox has one very unique thing, and that’s about 11 billion hours of human interaction data every month. It’s not just video, it’s what their faces are doing, where their arms are moving, what they’re doing in a 3D environment. And that’s a huge repository of training data that we would never sell or leak, but use to make the platform better. So I think there’s a big opportunity for us there.

Jeremy Tepper: Yeah. It’s an incredible amount of engagement and creates this flywheel for you guys.

David Baszucki: That’s right.

Jeremy Tepper: 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? They build the games that people play.

David Baszucki: I’m a little more on the optimistic side, aka Industrial Revolution. It’s not like all of the people who are building horse buggies lost their jobs, but there’s some new types of industry for them to do and accelerate and do better. So I think what we will initially see with our creators is higher quality, more amazing type creations. Maybe a shifting in the landscape, but I’m overall optimistic that we’re not going to have an unemployment crisis. I think we’re going to see new types of creative work.

Jeremy Tepper: Well, that optimism is exciting. It means that you’re probably going to continue to run the company for a long time. I have one more question for you before I turn it to some audience Q&A. Stepping back as you reflect on the journey thus far, any regrets?

David Baszucki: No.

Jeremy Tepper: None?

David Baszucki: I would say mistakes, left and right.

Jeremy Tepper: Mistakes, no regrets.

David Baszucki: A regret would be like if I had to replay my life, I would have changed it, I wouldn’t. Lots of mistakes, lots of learning.

Jeremy Tepper: Tell us about one.

David Baszucki: Oh, 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. I would say if anything, there were times when we could have leaned into our vision even harder, even have been more aggressive kind of things. 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, short-term hacks aren’t going to work, that kind of stuff. Now, I think we’re in a great opportunity really to take the long view on the AI stuff as well.

Jeremy Tepper: Well, we’ll now turn it over to the audience where three students have prepared questions for you. I’ll turn it over now.

Student: Hello. I’m [name]. I’m from the Class of 2027. I’m an MBA1. Thank you so much for sharing your stories. I think it’s incredibly inspiring. I do have a question for you regarding, as we scale, 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 the demand for compute and more service and the quality of services as we go forward? Thank you.

David Baszucki: Yeah. We have this term we use inside the company called infrastructure adjacency. And it’s really interesting to think about in that we build… We have a lot of data centers. We have 40 data centers. 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. So we have our own bare-metal data center, but we have cloud partners like AWS and Azure and GCP where we can turn on massive extra capacity. And when we run the math, it’s actually pretty optimal. 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.

This is going to continue. So I would say, we feel very lucky that we are not dependent on the cloud providers. They’re typically three times more expensive than our own stuff, both on CPUs, on GPUs, all of that. We’re continuing to build this out, but we’ll always have this adjacent cloud bursting capability. I think I could see us… If we imagine 10% of the gaming space, 3X bigger, I think we can handle that. But I think the other thing is… a little secret of Roblox is we are kind of an infrastructure company.

Student: Hi, thank you for being here. My name is [name], MBA Class of 2026, MBA2, also from the gaming industry. My question is, on your previous interview, you mentioned gaming is still in the pre-history era. So just curious about for Roblox, what’s the plan for the next five years? What should we expect given on the statements?

David Baszucki: I like that question, right? 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. Most games today that are beautiful and high fidelity on a PC don’t run on a phone, which is kind of weird. Most games don’t stream in 3D in a low latency way. They either stream video, which hasn’t worked so well, or they’re downloaded, some as big as 200 gigabytes. So the magic combination of exact same experience, low-end, 2-gigabyte RAM, Android phone and gaming PC, instantly joining around the world with low latency is where I think the next gen is, so that in our developer conference, that’s kind of a huge architectural thing we’ve been talking about. But there’s potentially another even architecture beyond that, which is what comes to bear with essentially massive AI acceleration and upsampling and all of that. So it still is in the, I would say, stone age generally.

Student: Hi, my name is Marshall. I’m an MBA1 here, Class of ‘27. I was first introduced to Roblox back in 2007. I was in about the fourth grade at the time. So I’m curious, what was your original vision for what kids would take away from the platform and how has that evolved over time?

David Baszucki: So a couple of things that are really fun about this product is, number one, we were not heavily gamers. 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. That, I think, actually has come to be true. And not being constrained as 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.

Jeremy Tepper: Thank you to the students for those questions. Dave, before we let you go, we have to dive into a View From The Top tradition. It’s our rapid fire segment.

David Baszucki: Yes.

Jeremy Tepper: All right, let’s do it. Never seen somebody so fired up for the last-

David Baszucki: It’s like a Rorschach test, right?

Jeremy Tepper: Yeah, exactly. Okay, you ready?

David Baszucki: Yeah.

Jeremy Tepper: Favorite childhood game.

David Baszucki: Wow. I’m going to say chess. Me and my brother.

Jeremy Tepper: On chess.com now, a GSB company?

David Baszucki: No. We used a physical chess board.

Jeremy Tepper: Okay, fair enough.

David Baszucki: Yeah. And then I would say interesting, inside chess, outside like pretending we were in the army kind of thing.

Jeremy Tepper: Oh, yeah. Kind of similar, yeah. If you weren’t running Roblox, what would you be doing?

David Baszucki: Trying to build a Roblox competitor. Is that a real answer?

Jeremy Tepper: I think that’s real, yeah. Favorite destination on that iconic family road trip.

David Baszucki: Whoa. We went everywhere… I would say Mount Rushmore.

Jeremy Tepper: Mount Rushmore.

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. It was a beautiful night.

Jeremy Tepper: And favorite memory as a Stanford undergrad?

David Baszucki: We were just talking about what the football game… I’m riffing back to we were talking about what it was like to go to a Stanford football game in 1980s. You could bring a keg into the stadium.

Jeremy Tepper: You said the band was pretty raunchy back then?

David Baszucki: The band was arguably, at that time, even considered politically incorrect.

Jeremy Tepper: Sounds fun.

David Baszucki: Yeah.

Jeremy Tepper: Well, final reflective question before we let you go properly. It’s not a rapid fire question.

David Baszucki: Okay. I got to think about this one.

Jeremy Tepper: Yeah. What is the best piece of leadership advice you have received?

David Baszucki: That makes me think there’s many pieces of leadership advice that were bad advice. So actually, a two-part answer. A lot of my development has been trying to, over time, ignore advice I’ve been given. And then I would say the best advice, probably 80 people give it to you when you’re just having a rough time and they just say, “Trust your gut.” And many people have given me that.

Jeremy Tepper: Dave, thank you for being here. Ladies and gentlemen, Dave Baszucki.

Michael McDowell: 11 billion hours of human interaction data every month. That’s pretty incredible.

Jeremy Tepper: Yeah, it’s nuts to think about. It gives them a huge potential advantage going forward. One of the questions I asked Dave was, what gives Roblox a unique right in the age of AI to continue to innovate? And if you think about that data they’re sitting on, global data user intent, they can continue to innovate and build really interesting things on top of that if they invest correctly.

Michael McDowell: David had a lot to say about AI. What would you pick out in particular? What stuck out?

Jeremy Tepper: I think what stuck out to me was just how many places he envisions AI impacting their business. So certainly on the infrastructure side, and concurrency in scaling these games up to 25, 35, 40 million users and gamers at a time, but also in the way those developers build games. I thought it was interesting and important as he spoke to his community of developers that he was referring to AI as a tool that will augment their creative process rather than replace them.

Michael McDowell: Yeah. I was happy to hear him say, “I’m overall optimistic that we’re not going to have an employment crisis.”

Jeremy Tepper: Yeah. Me too. Yeah. I sure hope so.

Michael McDowell: I’m not saying visionary is a strong word, but it’s not the wrong word. It is clear he’s really forward focused even as he was tracing the past evolution of Roblox.

Jeremy Tepper: I think visionary is the right word. If you even just double-click or back and forth on monetization, they thought of a monetization model where developers make money for building games that was really hard to envision. I think the preeminent monetization model for social platforms in 2007 when they launched the in-game currency, subscriptions was coming online, but really ads. So for them to say, “Hey, we will actually develop an in-game currency,” and all of the tooling required around that to get dollars on the platform and help developers cash out, they built basically a bank behind a development infrastructure. So I think visionary is the right word, and that’s a pretty good example of just how forward-thinking it was.

Michael McDowell: Let’s shift over a little bit. I thought you really did a good job delicately pushing on a contemporary issue the company is facing. Roblox is in the news pretty regularly these days, maybe not for the right reasons. How did you approach this subject?

Jeremy Tepper: Well, for me, it’s a unique opportunity to hear from someone who’s in the middle of, I would say, dealing with a crisis of confidence in the company about how they’re approaching child safety on their platform. So for the students in the crowd and for anybody listening to the podcast, I was really impressed by how open Dave was about his approach on child safety. It was really important to me to talk about it for that learning purpose and because of the societal impact.

We cannot talk to platforms like Roblox, Netflix, Meta, TikTok, and not ask a tough question about what does your platform mean for society. And for Roblox, the preeminent issue right now is adults interacting with children on the platform, most of the time in non-nefarious ways, but at times in nefarious ways.

Michael McDowell: Yeah, and I think there’s a tension there. One of the things he said was the industry is learning how to keep kids safe, assuming an 11-year-old is handed a phone. But there is another perspective there.

Jeremy Tepper: Yeah. I think Dave alluded to this. There’s things they can’t control, like when a child gets a phone, how a parent monitors that child’s usage of technology and the internet. And in fact, I got my first phone when I was 13 and my first computer right around the same age, and my parents didn’t know what I was doing online. It’s incredibly difficult to monitor. So there’s parts of this where, I think, Dave said Roblox is actually leading the charge and is one of the safer places where your child can be online. I think that’s up for the public to decide. This is not unique to Roblox and it is not an easy problem to solve, but I don’t think the public cares. Ultimately, if children are in danger, the public doesn’t care how hard it is to solve, they just want the kids out of danger, which is very understandable.

Michael McDowell: Mm-hmm.

Jeremy Tepper: We talked about rolling with the punches and I asked him a question about, “Didn’t people think you were crazy when you were doing this?” and he didn’t even flinch. I think that is a really good indicator of a guy who was building something and didn’t care what people thought about it. I think the message is, to founders today, if you have a really remarkable vision of what the future could be, there’s going to be a lot of people that don’t have an incentive to tell you, “Oh, yeah, I could see it playing out that way.” I think people are risk-averse. And Dave is this incredible example of what it looks like to look down the barrel of a lot of people saying no and continue to believe.

Michael McDowell: I want to point right to that. In terms of the audience, people listening, for both investors and entrepreneurs, what does that say about confidence?

Jeremy Tepper: I think it’s actually self-belief. I don’t know if you’d call it confidence. Because I think Dave had doubts throughout, but he had belief that he’d figure it out. There was a moment where he talked about starting a window cleaning business with his brother, and he said, “We just made buck.” I loved that because it gets at what Dave really is. There’s this venture capital fund called Altos Ventures. They were one of the first investors in Roblox, and they talk about hedgehogs and they like to invest in hedgehogs. These are people that get extremely focused on their mission and make it work, and they dedicate everything they have, and they get very tunnel-visioned. And whether it was window cleaning or a 3D physics simulation engine, or ultimately Roblox, Dave is a hedgehog. That self-belief and that focus really came through for me.

Michael McDowell: Okay so are you a hedgehog?

Jeremy Tepper: I’d like to think so, but I think time will tell. I think hedgehogs are defined over the 20, 30-year period, not the three or four-year period.

Michael McDowell: We got a few decades to wait.

Jeremy Tepper: Yeah. We’ll see.

Michael McDowell: Fair enough.

Jeremy Tepper: Come back to me.

Michael McDowell: Awesome. Jeremy, thank you so much.

Jeremy Tepper: Thanks, Michael.

Jeremy Tepper: You’ve been listening to View From The Top: The Podcast, a production of Stanford Graduate School of Business. This interview was conducted by me, Jeremy Tepper, of the MBA Class of 2026. Michael McDowell is our managing producer, and Michael Reilly edited and mixed this episode. Special thanks to Liz Walker. View From The Top is the dean’s premier speaker series. It was started in 1978 and is supported in part by the F. Kirk Brennan Speaker Series Fund. During interviews led by students, leaders from around the world share insights on effective leadership, core values, and lessons learned along the way.

You can find more episodes of View From The Top on our website, gsb.stanford.edu/business-podcasts. Don’t forget to rate and subscribe, and follow us on social media @stanfordgsb. See you next time on View From The Top.