Make Better Decisions by Fixing Yourself First

0:00If one is not reducing bureaucracy, there's no neutral ground. If one is not trying to improve things, it is going backwards.

0:15Shane Parrish:I want to start in an unexpected place before we get into a bunch of other things. But I want to talk about how keto changed your family's life. So this is super interesting. I had dabbled with keto maybe 10 or 12 years ago. Then this thing happened with my son where he got super bad bipolar probably eight to ten years ago. We tried every medication, we tried every solution to get him off medication. And here we were four or five or six years later, doctors had told him, we're going to be on five medications for the rest of your life. He wasn't quite himself. Lots of hospitalizations, all kind of stuff.

0:58And then out of the blue, someone I knew in the metabolic health community just said, hey, by the way, keto solved my bipolar. And so you can imagine after trying every resource in the world, right, just all these doctors and all of that, we said, let's give it a shot. So we found a super smart keto doctor, super smart keto dietician. And the fact that he said, I will try it, oh my gosh. What a relief. Huge. And then the next step, kind of three weeks in on the keto thing, was him saying, whoa, I feel a little different. And kind of picking up just a little bit more of him. Still heavily medicated, but like the real him starting to poke through.

1:49Shane Parrish:That must have been so hard on you and your wife as well. So hard on us. What's really freaky is the number of families that it's that hard on. Like, we walk around the world and we see, you know, go to a football game and there's 60 ,000 people. There's probably many people in that stadium going through that same thing. Was there ever a moment where you just felt like you were breaking? Luckily not. Either through some combination of, as you can imagine, here's this patient, we got to be there for him. So it's just like, okay. And luckily I don't have what he has. So how do I, in a way, take care of myself so I can be there for him?

2:38Shane Parrish:And how do you think about the relationship between mental health and our body, I guess, in that sense. If I roll back the clock and think about my mind and how I thought about mental health 10 years ago, I use that as a template for how everyone without someone in their family must think about it. It's just, oh, people go crazy. Oh, they're having a mental health thing. I never thought of it as a super physical thing because now I think of it as the same as a broken arm. It's just part of your body is physically not working. It just happens to be your brain. With this keto thing, I think I've developed a theory that in some cases, mental health things are very physical.

3:22It's is your brain getting enough energy? The theory behind keto is that arguably we were eating some, you know, maybe more primeval foods up till 10 ,000 years ago. We hit the agricultural revolution. that was wonderful in many ways. Our population flourished, but in certain ways, we might not be fully adapted. There may be certain people who just are not fully adapted to that many carbs in their diet. And so for my son, he may be one of those people. And that launched a family foundation, I'd say for the last four or five years, doing research on this. What's your current metabolic routine? I do think I'm doing pretty well on not eating a lot of complex carbs.

4:07that spike my glucose. So I'm wearing a CGM right now. So I have a little app on my phone and I can see my glucose level whenever I want to see it. But you're not tracking your ketones? I'm not tracking my ketones, although I have in the past. And so I kind of know what's going to spike me. But generally, I eat a fair amount of protein, a fair amount of fat, not too many carbs. And I don't eat any sugar. I basically don't eat any starch, like anything that's going to give me a glucose spike.

4:41Shane Parrish:How does your metabolic state affect your decision making? I do think eating a lot of food or even a lot of carbs, we can all feel that kind of slow down, kind of hibernate, sleepy mode. I think in a more fasted state, you can feel that more alert, Like, I want to go do stuff kind of thing. And I do think it's good to make decisions in that, if you can tell the difference in that I want to go do stuff mode, I think those end up being longer term decisions. They can be decisions that in a less optimistic mode seem that that's impossible. Like, that's so hard. I do feel I have learned to tell when I'm in an on mood, when I'm in an off mood, when I'm a little more of an optimistic mode, which I think is general, I do try to observe that from the outside in and say all big decisions make in the optimistic mode.

5:42So I do try to say, is the decision-making machinery in the optimal state? Outside of Roblox, how do you think about great products? I like the notion of less is more. So I like the notion of telling everyone it's very easy to add knobs and stuff. It's very hard to remove all of the knobs and sliders. It's fun when we think about products, like in a kitchen, for example, when we think about great products, I definitely would not like a dedicated appliance to cook hot dogs as opposed to a beautiful knife and a beautiful frying pan. So I think I like simpler things of higher quality rather than complicated things.

6:33Shane Parrish:How do you think of removing when it comes to the company? I mean, there seems to be like sediment builds up inside the company and bureaucracy is the natural sort of like entropy of an organization. And then there has to be a counterforce almost to get rid of that. We do use the term destroy bureaucracy inside the company at times. Like, I would say that if one is not reducing bureaucracy, there's no neutral ground. Like, I think in a lot of situations where one thinks, we're pretty good, like, we're just going to let it be in this steady state, that's actually things are imploding in a way. If one is not trying to improve things, it is going backwards.

7:20How do you give feedback to people? What I have tried to do is move to more frequency, more in-the-moment, relaxed, not a big deal, rather than, let's have a feedback session. So trying to be in the moment, oh, what do you think about that, I think is much better than blocking or waiting or trying to organize it.

7:49Shane Parrish:How would you think that people receive that feedback? I think the feedback is hyper-tone related. I actually think if delivered in a neutral positive tone, where people can sense my blood pressure's not going up, where I'm just like, I got your back no matter what, it's all cool. Even if the feedback's pretty harsh, it's like, whoa, that was okay. So whereas I do feel if feedback is delivered aggressively or it's just like, oh, it's traumatic, I think that can actually influence it more than the feedback. I like the idea of tonal because so often we give, you know, in a distributed workforce or people working from home, a lot of feedback is written or text or slack or, and then you don't have that tone or softness that goes with it.

8:41I support that. Also, if I get riled up, don't touch text or email. Just walk away. Do you recognize it? Oh, yeah. Just red alert. Do not send that email. To you or the one that you're about to send? No, just imagine writing an email where you're thinking, I'm so pissed off. It's going to feel so good to send this email. Don't send that. Because then, the next morning, you're like, oh my gosh, thank goodness I didn't send that. I can call this person. I can have a lot more impact in delivering that same message without being all worked up about it. Plus, also, what is one trying to optimize? When someone's trying to send that email, I'm optimizing for myself.

9:28Whereas when the next morning comes around, you can say, well, actually, I should optimize for the learning and excitement of this employee.

9:39Shane Parrish:I like that a lot. I think of it in terms of outcome over ego. Absolutely. We're just constantly trying to make it a better experience for the employee. Who cares about me being pissed off? When you see people make mistakes, what are the patterns of mistakes that people make when it comes to seeing reality, ego, decision-making in that vein? Oh, no, I don't think there's a lot of mistakes. I think the typical pattern is Hey, can we make this simpler? Hey, can we look a couple years out and think about what's gonna happen with that? That looks a little short-term. Hey, that looks a little complicated.

10:23You have two things doing the same thing. Hey, can we take that from an appliance that heats up hot dogs into two separate appliances, a pan and a knife, that are both the best in the world?

10:38Shane Parrish:Can you spend a few beats and explain the principles of good decision-making and good thinking as you see them? There is something, I think, inside of an organization where for many decisions, it's actually more important just to let's identify the person who's going to make the decision and let them be somewhat free and creative to make the decision than in many cases a group decision or a confused decision or we're trying to do all of that. So I think you'll see more and more us at Roblox, it's just like, can we identify the decision maker? And having them have a little freedom to make their own decision, I think, is super powerful.

11:19Shane Parrish:Aside from systems thinking, what are some of the mental models that you use to think through problems? I think one mental model that we've had in thinking through problems is kind of an irreverence in a way to the problem. You know, one of the decisions I think back to the early founding of Roblox, and I would call this a set of an irreverence, is the very earliest version of Roblox had what we would call a classic Roblox character. We were saying, okay, we're building a user-generated gaming platform. We're gonna have an avatar. The very first Roblox avatar was a very fast programmer art avatar to get something working.

12:06Its proportions are ridiculously simple. You know, the legs are one by one by two. The body's two by two by one. The face of the early Roblox avatar was just programmer art that we put together. Universally, all of the gaming industry people, we would talk to, whoa, whoa, whoa, do not ship that. You need a full avatar. You need a meshed avatar. It's got to be high res. Your objects need to look better. So we got that universally. I would say even within our team, we got that. But we decided it's better to ship that early and start getting feedback on it. I thought that was a great decision. And we found out actually that a lot of of the input we'd been getting.

12:55Thank God we didn't listen to that, basically.

12:58Shane Parrish:How do you deal with a situation where your instinct and the data disagree? We get that quite often. It's interesting to think of the whole Roblox community and how smart and creative they are and how passionate they are. There's a really gentle line that needs to be worked on as we both drive the product forward as well as listen to that community. And that creates many conditions where our instincts are different than the community's vibe. There have been situations where our instincts have been different, the community's been right. But there's many other cases where our instincts have been right And the community then follows along and says, that's an absolutely great idea.

13:49Shane Parrish:But how do you resolve that? Like so much of getting to good decisions and good outcomes is seeing reality and adapting to reality. I think a lot of decisions that can be made incrementally that aren't one way, those are a lot easier. We try to make faster decisions in the right direction. We can adjust. I think realizing when we need to adjust is super powerful. It's interesting because two of our values are take the long view and get stuff done. We kind of like to say there's a magic decision-making quadrant where the magic quadrant is, it's both a long view decision with hyper iteration to get there.

14:30And that's kind of a magic safe quadrant. All of the other quadrants have a little weirdness to them.

14:37Shane Parrish:When things aren't working the way you want them to, what's your inner monologue in those moments? Interestingly, I think when we're running companies, we have all the evolutionary biology of being out there in the wilderness trying to survive and having battles and all of that. So I think CEOs can get that feeling like, oh my gosh, do I have enough firewood for the next three winters? And it's like, oh, it's not feeling too right. that has been for me an intuitive early thinking thing what's great is it leads to typically a refinement in strategy or a little bit where you're like then all of a sudden the light goes on it's just like oh we got the plan we know exactly what to do we're gonna send four people out they're all gonna have axes we're gonna put in three months three years of firewood we think we can do it in three weeks.

15:34Shane Parrish:Everything's great. Do you manufacture threats as a way to motivate or focus yourself? I think of Michael Jordan playing for the Bulls. He used to manufacture things that other players said about it. We are running right now. I'm not going to say what the company looks like. It's not an existing company. In my own mind, I'm imagining the company across the street. that is like our, you know, could call it a threat. Like, what's it look like? Who are the people? How many people? What are they building? Do you analyze your mistakes? Yeah. How do you do that? What's your process? I would just say my process, I would say typically my mistakes have come, I think, from being maybe overly logical and less intuitive.

16:26Say more about that. One can fall into the trap of just saying, I have to go down this path in a way, and not popping out of the box, and kind of thinking of the more outside of the box solution. So trying to think of mistakes I have made, have been typically where I've hung on to a concept too long. When I actually was very free to change my course. I think we have a lot more optionality than we imagine when I look backwards in time.

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18:30Shane Parrish:Is it fair to say that Roblox is the biggest generated human universe in the world? It's worth thinking about that, because it would be worth thinking, what's the definition of a human-generated universe. Like there's universes in books and in movies. As far as an interactive multiplayer universe where people can go together and do things together, I mean, it might be. So through this virtual world, what have you learned about human desire and psychology? What I think I have learned is that we need to have enormous respect for all the people in this virtual world. I think it's surprising how much people can attach to their digital identity.

19:18I mean, it has to be very carefully respected. Like, this is real stuff, right? There are real emotions happening, real interactions happening. And I think I've also learned that I feel it's still very, very early in this.

19:33Shane Parrish:Say more about attaching to your virtual identity. Once again, this is an area that I love the Roblox community on, and I think they're very sensitive to this, in that we're migrating all of our avatars to a position where, rather than just being a monolithic block, for those users who choose, the head may smile, if they want it to smile, or something like that. But in the migration of this process, the Roblox community has just been absolute sticklers for perfection. in the migration. And it's because people have been familiar with their avatar for such a long time. It's like, you can't take my head and adjust a few people.

20:17What are you doing? And I think they're right.

20:20Shane Parrish:How do you think about things like capital allocation? You guys just announced your first buyback recently. Super thoughtful. Knock on wood, we've made a lot of cash in our history, like a lot of positive free cash flow. A lot of the decisions we make have come from not necessarily capital allocation, but what are we trying to do? You know, what is the big picture of the opportunity and what we're trying to grow from? I would say we've refined that many times throughout our history. Go deeper on that. You know, it's almost like we're in Roblox version 5.0 right now, in that when we started the company, the vision we had, I think, was spot on.

21:02We were imagining a new category, human co-experience category, the metaverse category, the holodeck category, the snow crash category. We really could see that coming, but we were very moderate and modest in the very first thing we were going for. When we started, for those of us who could remember, there was like Club Penguin was a really popular kids game. And we just thought that was, oh, that's huge. Like, Club Penguin. Like they've got, you know, X many people. We like what they're doing. We started with arguably a much bigger, deeper technical foundation. I would say though, along the way, we've refined our aspiration and what we're trying to do.

21:48When we went public, we were talking about, you know, connecting the world. Two years ago, we talked about getting 10 % of global gaming on our platform. that continues to refine as we have a bigger percentage of global gaming on our platform. I think you'll continue to hear us kind of expand our ambition.

22:08Shane Parrish:What percent are you now? Well, you can look at where we're tracking on our bookings. And I think if you divide our bookings by 200 billion, we're in the three to four percent. That's amazing. That's incredible. It's incredible. And at the same time, it actually seems like it's exciting to me because there's a lot of room beyond three or four percent. What about incentives for people? What have you gotten right and gotten wrong over the years? I think we got really lucky in being really fascinated with incentives. And I think very early on when we started building Roblox, some of the early founders, John and Eric and Matt and myself, we were just really into economics and incentives and what makes people do things in a nice, appropriate way and drives it.

22:57At the very start of Roblox, we thought just the incentive of user-generated content, like, whoa, everyone can make their own game and they can come and play it and show it to their friends. We thought that would be an amazing incentive and we thought that would give us amazing amounts of content. That did prove to be really true. You know, along the way, we had a lot of questions around economic incentives. And Roblox got pretty big without a developer, a way for developers to earn money on the platform. It was a hobby for everyone. We had people who were working 24 hours a day, just they loved their Roblox creation.

23:43They were struggling, like, wow, I got to make a living. I just want to build on Roblox. So we had a lot of board level discussion. Should we turn this into something where someone could make a living? We actually, in retrospect, it's crazy. Wim went back and forth a lot like, well, I'm not so sure we should do that. But we did come up with the notion, okay, we're going to build a really elegant system. Creators can make whatever, you know, wide range of experiences. They can have users participate economically. It's going to be free for most people. Some of these creators who are working 24-7 might be able to make a living on that.

24:23I think we thought about that very systemically, because that system has just been the engine behind us ever since then.