How Did Roblox Grew From 0 to 200 Million Monthly Active Users
Roblox hosts half of all American children. They went public in March 2021 and gain a $42 billion valuation. But how? This is the story of how David Baszucki built one of the most valuable gaming companies.
From teaching to gaming
The idea of Roblox wasn’t an aha moment after playing Minecraft. Shaping the idea of Roblox was like building a Lego set — one block at a time.
The story started a long time ago (think about the Berlin wall and the first GPS satellite!).
David Baszucki founded Knowledge Revolution — a company that made teaching software.
One day, David and his team went into schools and labs.
He saw students instead of doing school-related things, kids were making car crashes and buildings fall down.
“They were creating really funny stuff,” He said.
The first block of Roblox shaped there.
From a founder to an angel
In 1999 Knowledge Revolution acquired for $20 million by MSC Software. David becomes a millionaire. And an angel.
He invests in Friendster. (I don’t know why, but it reminds me of Lovefinderrz in Rick & Morty.)
This startup shaped another block of the Roblox Lego set.
From blocks to blox
It was around 2004 when the metaverse revolution started. David Baszucki and Erik Cassel created the beta version of DynaBlocks.
One year later, they changed the name to Roblox, and in 2006 the official version launched. (3…2…1…Liftoff!)
“How’s that even possible? How a game for children can be worth $42 billion dollars?” might you say. “It‘s probably just another startup, hitting a high valuation, and then will running out of money.”
But…never judge a book by its cover.
Roblox isn’t just a game for children. Baszucki has bigger ambitions for this “game”.
Did you watch Ready Player One by Steven Spielberg?
If you’re not, bookmark this article, open Netflix, and start watching it. And if you watched that, you probably heard about the OASIS.
Roblox could become something like that.
In this article, we’ll talk about how Roblox grew from nothing to an ecosystem with millions of citizens.
So are you ready, player? Let’s dive in.
A self-sustaining ecosystem
Gaming companies don’t care about user-generated content.
There are building Triple-A games, people will play them and after a few years, those games become old school. This is the “industry norm”.
Only the company behind the game can be the creator. You just a temporary player. Not an owner and citizen.
Roblox changed the game.
They built an ecosystem, better than any option on the market.
Nowadays, people talking about the importance of building a community. But Roblox took a step further and created an ecosystem.
Roblox is a YouTube of games. It has more than 50 million experiences from 2 million creators so far.
As Louise Shorthouse (a senior games analyst) said:
“It’s not just a game, it’s a platform to create games.”
Keep ’em coming!
AAA games require a lot of resources and you cannot create your own game easily.
Roblox gives you the freedom to start creating your own world. The company built its own game engine, which is designed solely to output Roblox-style experiences.
Genius, isn’t it?
This way, experiences will be consistent and also people won’t be bored.
“People are members of a community, but people are owners of an ecosystem.”
Build your own economy
Creators earn Robux (the Roblox currency), which can be converted back into cash — it’s how the Roblox economy works.
So far, more than 1000 developers earned at least $10,000 in Robux in 2020. Surprisingly, more than 300 earned $100,000 or more.
Roblox simply saying: If you create a badass game, we’ll pay you handsomely.
Designing the right framework is a crucial part of Roblox’s growth.
This how Roblox acquired millions of users using the right framework:
- Roblox is creator-focused. They created their own engine to be easier for creators to develop games. Also, they’ve their own economy to support their creators.
- Roblox provides fresh games regularly and you’ve unlimited choices. So, you won’t be bored, ever.
- Roblox built a place for people to hang out with their friends. Invite your friend and even in the middle of a global pandemic, you have fun with your besties.
One of the big unmet needs we solve is to give kids a place to have imagination, if you play the experiences on our platform, you’re not playing to win. You go into these worlds with people you know and share an experience.”
— Craig Donato, Roblox CBO
Organic growth fueled by an ecosystem
It took Roblox more than 15 years to become a $42 Billion company. But the growth wasn’t linear, it was exponentially.
Here are some statistics from Roblox growth:
- Roblox experienced 10x growth in about 3 years. From 9 million users in February 2016 to 90 million in April 2019.
- Roblox in 2020 added 50 million monthly active users and 5 million active creators.
- Roblox has 36.2 million daily active users worldwide. An increase from 13.7 million daily active users in 2019.
Maybe it’s shocking for many of today’s startups, but most of Roblox’s growth is organic.
It’s simple. When you have an ecosystem, you don’t need to make money for Facebook, do you? (sorry Zukerberg!)
“A great deal of work and very little paid acquisition are the secret sauces of Roblox organic growth.”
A big dream
Competition is for losers. (Yup, we all hear that.)
We’d create our own playfield. But not many companies dare to do that, am I right?
Many corporations can only think in the small box of their own industry.
But we, as humans, pay attention to contrast and difference in our environment. That’s why companies that create categories become BOLD. (there you go, a contrast.)
Roblox creates a category called, “human co-experience”.
The current valuation of Roblox is backed by their vision — the story their tell about the future.
“valuation that is not backed up by a story is both soulless and untrustworthy and that we remember stories better than spreadsheets.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business
It’s not about who they are in the present, it’s about who they’ll become tomorrow.
They believe, someday, you’ll work, learn and live in the Roblox metaverse.
Now, what do you think about the valuation of Roblox?
If we believe their story, $42 billion is just a glimpse of Roblox's future.
Let’s end this article with a quote from Ready Player One:
“[Halliday] was the videogame designer responsible for creating the OASIS, a massively multiplayer online game that had gradually evolved into the globally networked virtual reality most of humanity now used on a daily basis.”
Lessons from Roblox’s growth
- Build a self-sustaining ecosystem. Provide the right framework. The goal is to turn consumers into creators.
- Have a big vision. Tell a believable story about the future.
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