The Roblox EC-1
Following in the wake of our deep profiles of Patreon and Niantic, we have our next EC-1 package, this time on children’s gaming platform Roblox. Extra Crunch writer Sherwood Morrison has covered gaming and startups for years, and he got an in-depth, behind-the-scenes look at the incredibly popular startup with interviews with many of the company’s principals. This is your weekend read.
How Roblox avoided the gaming graveyard and grew into a $2.5B company
In part one of this EC-1, Morrison looks at the origin story of Roblox, which has to be one of the most interesting I have read in some time. Founders Dave Baszucki and Erik Cassel first worked together on a physics simulation engine called Knowledge Revolution before founding Roblox in 2004 (then known as Dynablox).
Since those humble origins 15 years ago, Baszucki and his team have grown the company dramatically through a sequence of smart strategic moves that Morrison illuminates, eventually culminating in the company’s massive $150 million Series F venture capital round last year from Greylock and Tiger Global, valuing the company at a reported $2.5 billion. Roblox now has 90 million active users, tripling in just a few short years.
Digging into the Roblox growth strategy
Meanwhile, in part two of this EC-1, Morrison illuminates the challenges and opportunities facing Roblox in the years ahead as it looks to conquer a greater swath of the gaming market, or what Baszucki calls “human co-experience.”
First and foremost, Roblox has to expand internationally and capture a greater share of children’s entertainment. Then, the company wants to start to expand beyond its children’s gaming roots to reach other, older demographics. It has to do all this while also maintaining safety for its users and increasing the quality of its game engine against competitors like Unity and Unreal.
As Morrison writes:
If Roblox can continue to grow, it will serve as a guiding example for a whole new generation of companies. And if it continues to evolve, it may yet prove that human co-experience is more than a fever dream. A whole generation of companies failed to create immersive social environments — but in the space between games and chat, Roblox may yet prove that there’s a whole new social category waiting to be discovered.
Be sure to check out both parts, and if you haven’t already, be sure to read the Patreon EC-1 and the Niantic EC-1 as well for similar deep profiles of leading Silicon Valley startups.
Minimum investment for EB-5 investor green card expected to more than double
Immigrants make up a huge portion of Silicon Valley’s workers and investors. That’s why news that the Trump Administration is changing the eligibility for investor green cards is a huge story, particularly for immigrants from India.
Leading startup immigration attorney Sophie Alcorn (who is also one of our Verified Experts), has a guest post on what the changes to the law mean for the region and for startups as well as on overview of the investor visa immigration process.
Imminent regulatory changes to the EB-5 program are expected to make obtaining an EB-5 green card a whole lot more expensive. The minimum investment is anticipated to more than double to $1.35 million from the current $500,000. And with individuals from India expected to face a backlog for EB-5 green cards shortly, the opportunity to obtain an EB-5 green card at a relatively low cost and in a timely manner is closing.
Unraveling immigration politics and Silicon Valley ethics with Jaclyn Friedman
On a different front related to immigration, our resident tech ethics expert Greg Epstein has a conversation with Jaclyn Friedman, an author and expert on sexual ethics. The two talk about the intersection of sex, ethics, and tech, as well as Friedman’s recent protests of Immigration and Customs Enforcement (ICE) and its raids on undocumented immigrants in the United States. With tech companies like Wayfair and Palantir getting more and more mixed up in immigration politics, taking stock of how to handle these challenging situations is ever more important.
Friedman: I don’t know if this is too radical for TechCrunch, but of course there are connections there, because the connection is capitalism. Unfettered, unregulated capitalism is underneath all of this.
A lot of those camps are for-profit, run by for-profit companies making a fortune on torturing people and kidnapping children. And any company that wants to keep wages low hires undocumented workers or immigrants, even if they have documents, who are hungrier for jobs or have fewer options. [We need] to talk about the profit motive for all this human suffering.
Epstein: I don’t consider that too radical for TechCrunch.
Friedman: Okay, good. I don’t want to shut people’s minds closed so that they don’t hear the rest of the interview, but this is in part a story about choosing profit over humans.
When Someone Great is Gone: How to address grief in the workplace with empathy
Mental health is an important issue for founders and all of us to address in an industry that otherwise hides these challenges. But one of the toughest acts for any leader is how to handle the grief of an employee or peer who has lost someone important in their lives. While startups are maybe not bastions of empathy today, MentalHappy CEO Tamar Lucien sees a way forward to building more trusting, and ultimately more human workplaces:
Even in the largest and most notable companies, where a variety of employee amenities and benefits are offered, the concept and practice of empathy is often neglected. Perhaps you haven’t come across such extreme examples of indifference in your workplace, but you may have participated in signing a generic condolences card or chipping in for some flowers.
We often don’t know what to say or do when a person experiences a loss, so we either stay silent or we resort to what we have seen everyone else do before us. We go along to get along because the topic of death and grief is uncomfortable. Uncomfortable, but inevitable.
Cannabis processing startups hope to unlock new chemicals and treatments
Talking about health, there is much innovation in the cannabis world these days aimed at improving the lives of patients. TechCrunch editor Jon Shieber analyzes some of the top startups working on new angles to bring cannabis into the health market, including CB Thereapuetics, Ginkgo Bioworks, and Hyasynth Bio. One startup, Demetrix, is even finding new ways to create cannabinoids in the first place:
The goal was to refine a process that would enable yeasts to make a range of cannabinoids that are found in the marijuana plant which could be used to develop new pharmaceuticals, additives and supplements for use in clinical and consumer applications. The technology works much the same way as brewing beer. Except instead of fermenting to produce alcohol, the fermentation process produces cannabinoids from genetically modified yeast cells.
With $34B Red Hat deal closed, IBM needs to execute now
Meanwhile, our enterprise reporter Ron Miller talks about what the closing of IBM’s massive acquisition of open-source behemoth Red Hat means for the future of the computing services giant.
IBM believes it can parlay the Red Hat deal into a much broader market presence, allowing it to not only sell its own cloud, which obviously hasn’t gone all that well to this point, but to other clouds as well. [IBM CEO Gina] Rometty told CNBC’s Jim Cramer that she sees this is as a strong market differentiator. “We have the leading platform for the hybrid cloud. That means it runs not only on the IBM Cloud, not only on-premise and private clouds, it runs on every other public cloud out there, so whether that’s Amazon, Microsoft, Google, whoever it is, it now runs on those as well. So, that extends our reach into those clouds,” she told Cramer.
She’s not wrong about the opportunity, and Patrick Moorhead, principal analyst at Moor Insights and Strategy sees a combined IBM and Red Hat as a company that could be at the forefront of the hybrid market. “IBM clients can come to the new combined company as a “one-stop-shop” for hybrid cloud. To work best, IBM needs to integrate enough to matter, but distance itself enough to quickly innovate,” Moorhead told TechCrunch.
Verified Expert Brand Designer: Studio Rodrigo
Finally this week, Yvonne Leow has our next Verified Expert, with brand designer Studio Rodrigo. The studio, founded by Ritik Dholakia, has worked with companies like Rare Bits and Context Travel on practice areas like brand identity and UX design.
Ritik Dholakia: One of the biggest challenges we find is that early-stage entrepreneurs have limited runway to make really smart design decisions for their company. We try to think about brand design in three critical stages. The first stage is establishing your brand in the context of both who you are, where do you want to stand for in the market, and how you want to differentiate yourself. As a founder, you need people who can really help you achieve that clarity quickly.
ICYMI: Earlier this week:
- The future of car ownership: Cars-as-a-service
- What CISOs need to learn from WannaCry
- Tackling the issue of mental health in Silicon Valley, with professional coach and former investor Jerry Colonna
- The startups creating the future of RegTech and financial services
- Grasshopper’s Judith Erwin leaps into innovation banking
- Meituan, Alibaba, and the new landscape of ride-hailing in China
- What everyone at a startup needs to know about immigration
- Verified Expert Lawyer: Sophie Alcorn
Thanks
To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.
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