At first glance Roblox may seem like it's kid's stuff. But CEO and Founder David Baszucki sees the potential behind the online maker culture and is using analytics and game mechanics to make this company a household name.
In business school, I developed a service for middle schoolers to create their own online curriculum and study materials. Back then, I had aspirations of competing against Prodigy and Compuserve.
I am always on the lookout for similarly conceived products (yes, I am still kicking myself for not taking on Scholastic Online or Lego.com). It wasn’t until 2011 that I found one in Roblox, a company that enables kids to design and build their own online activities.
Today, Roblox is a user-generated virtual playground and workshop designed for children ages seven and over. Players can create virtual worlds with blocks of various shapes, sizes and materials. It can be thought of as online Lego. Roblox has roughly three million devoted players from all over the world who visit the site and spend 40 million hours building, playing and sharing their creations.
Mission Impossible: “Allow Users To Build and Share Online”
According to Roblox CEO and Founder David Baszucki, the site’s mission is to allow users to have the same experience online that their parents had (offline) as children, playing with construction toys, model racecars or erector sets (from Lego to K’nex). David believes,
"People at Roblox will ultimately be able to create something that (is) not even possible in real life, such as visiting each others’ creations and ultimately making games out of these creations that are playable by thousands if not millions of users.”
How does his service go beyond what we or our parents got with our Lego sets? If, for example, you want to build a bulldozer, you would not only search and find a fully simulated bulldozer on the site, but also hundreds of models that could be taken apart.
As David says, “You would see engines and treads and you (would) be able and share and buy these different digital assets. We want everyone to share and use 3D digital assets!”
Does this executive sound like he’s having fun or what?
The Maker Culture
David wants Roblox to be part of the ever-growing maker culture, which represents a technology-based extension of the Do-It-Yourselfers, who are known for more traditional activities such as metalworking, woodworking and arts and crafts.
Typical interests of technology-based makers include engineering, electronics, robotics, 3-D printing as well as creating new and unique applications of technologies. They also encourage inventing and prototyping. For more information, read Chris Anderson’s new book, "Makers: The New Industrial Revolution."
David, however, hopes to move beyond the online maker subculture and eventually make Roblox into a household name. He envisions his brand being synonymous with online building, creating, inventing and playing:
We want to be known as a kind of cool digital erector set that attracts everything from younger users up through the Maker Faire Crowds," as well as “all those people (who) have a passion for creating cool stuff (like) Erector Sets, sharing (their creations) and experiencing it with others.”
His reference reminded me of Gilbert Toys’ Print Ads from “Boys Today. Men Tomorrow.” There’s a whole group of individuals who are finally getting to relive their childhood and be part of the DIY (Do-It-Yourself) / Maker culture.
[Note: 1949, an Erector Set was used to build the precursor to the modern artificial heart by Dr. William Sewell and Dr. William Glenn of the Yale School of Medicine. The external pump successfully bypassed the heart of a dog for more than an hour.]
It’s difficult to “genetically evolve a great game”
One reason for Roblox’s success is David’s keen attention to metrics. David believes analytics enable a company to “choose, tweak, and squeeze out that extra 5 to 10 percent of what you are trying to optimize.” His approach of focusing on continuous yet incremental improvements differs from most game companies in Silicon Valley, who have a tendency to use analytic methods, such as AB testing “to kind of genetically evolve a great game.”
This means they hope that a single, key insight will lead to dramatic improvement in their game. In layman terms: they focus on looking for a silver bullet. As David correctly points out, most great products don’t get created that way. Many slow, incremental improvements, rather than a single breakthrough, are the essentials of successful creation.
Roblox takes the same, calculated approach with its customer data by looking at the lifetime value of the different user classes in its user base, such as:
- Leaders of groups and clans on the site
- Battlers who compete to accumulate the most wins online
- Entrepreneurs, who are good at trading their Roblox bucks currency
- Artists, who want to be known as the great developer or designers of clothing in their virtual store.
Each of these clans gets parsed even further as Roblox collects data on every event that takes place on its service. The company then shares this information with its entire organization. This sort of democratic thinking fosters creativity and innovation and enables employees to react and respond more quickly to user behavior.
Game Mechanics and Improving Kids’ Lives
“Game Mechanics” is a term that unfortunately often gets defined by managers as "give me a leaderboard and some badges and we will have gamified."
David understands that the value of game mechanics is a great deal more than that. He describes the essence of game mechanics as determining the overall characteristics of the game itself, such as an obstacle course, which comes with its own rules, complexity, user interaction and environment. There’s tremendous value in experiencing problem solving in an online environment.
Unfortunately, most people dismiss online games (and even crowdsourcing products like Roblox) as escapist entertainment. But Jane McDonald, the author of "Reality is Broken" and a researcher at the Institute of the Future, asserts that games can provide four key ingredients that lead to a meaningful life:
- satisfying work (or task) because of clearly defined and achievable goals
- real hope or optimism for future success (in a game)
- strong social connections
- the chance to be part of something bigger than ourselves.
While these benefits are available in the real world, they are often difficult for children and adolescents to find because of their own fear of trying something new or reaching out to strangers. But when they can function in a safe online environment like Roblox, they are more likely to take the risk of trying and finding it.
Word of Mouth in the School Yard
With the majority of its players under 16 years, David encourages “word of mouth” run wild in the schoolyard. He aims to attract multiple users to play from the same middle or high school. He believes that it’s difficult to attract kids to a site if you try and reach them through their parents.
Most early online services focused on appealing first to parents instead of letting kids really make a purchase decision. If you are a teenager, you don’t necessarily want to buy something a parent recommends and you certainly don’t want to use the same service.
[Note: Based on my dozen of interviews with high school and college kids, Facebook is experiencing some of this parent-child conflict right now, as more and more kids don’t want to be on the same online service as their parents.]
This is not to say, however, that parents don’t play any role in their child’s online behavior. For most online games, though, parents seem only get involved when it comes to purchasing a virtual currency or getting a monthly subscription that is directly related to the quality of the service.
[Note: Virtual goods are purchased with virtual currency, a digital medium of exchange similar to dollars and cents. Virtual currency is in a very nascent stage, but projected to be a rapidly growing area of the web.]
Master the App Store
To be a successful mobile marketer, David advises people to focus on how product placement works in the Apple, Android, and other App stores: “There’s a lot of experimenting going on with companies switching price from US$ .99 to US$ 6.99 (and) back and forth (again)” as a way to “seesaw their way into the top standing.” This level of competition will require companies to shift from a traditional desktop website acquisition strategy to a mobile app store one.
[Note: Neither Apple nor Google releases information about their algorithms for determining placement in an App Store, but some of the key attributes seem to include the following: keywords, product name, product and user ratings. Also, there are some slight differences between iTunes and Searches on the iPhone itself. I will cover this in a future post, but in the meantime, you should know there is lots of opportunity to master this area. Just look at all the SEO experts out there.]
“Self-Organization of a Company”
David describes his approach to managing Roblox as the following: “We put a premium on each employee’s value, and believe that when they are left to their own devices, they can typically work in the right order of priorities.”
Roblox keeps its teams limited to three to four people while management ensures the company’s objectives intersect with a bigger company goal. The company’s direction is determined by “a mixture of big picture coupled with the prioritization of our users’ requests.” David believes his company’s success is based on the ability of his people to work in small, autonomous teams.
David believes that as a company brings more and more people into an organization whose values align with others already working there (as in his "self-organization approach"), its employees see a continuous flow of great results: “You start to see things happen from the ground up rather than from the top down.” This is an energizing force.
Follow Your Passion to the Next Big Thing
At the end of the conversation, David, whom I see as one of my virtual mentors (something he doesn’t yet know), provided three pieces of advice for the career of today’s entrepreneur:
- Find something you are extremely passionate about regardless of money.
- Figure out how it is linked to a very large market opportunity.
- Couple this with finding with very good people to work with. He believes these ”can take you a long way” towards creating “a fairly resilient structure for you to work through things as you work on building the next big thing!”
In the meantime, before you identify the type of product you want to build it is probably worthwhile to visit Roblox. The site isn’t the sexiest one in the world, but it does enable you to build Lego-Like objects online.
OK, here’s a thought. Imagine when Roblox can be integrated with 3D Printing and users can design, build (online) and create (offline) Lego-Like objects.
Editor's Note: To read more of Scott's interviews with industry leaders, why not check out Wildervoices: John Kennedy on the Changing Role and Challenges of Today's CMO