Free Porn Galabetbonuslari.com Galabetadresi.com Galabetcasino.com Vipparkbahissitesi.com Vipparkcanlicasino.com Vipparkcanlislotsitesi.com

How Two Twenty-Somethings Bootstrapped the World’s First Adtech in Roblox and Sold It For $17.5 Million

Few knew much about Roblox before it IPO’d in March 2021. Even now, you might mistake the game for a less-popular clone of Minecraft. However, Roblox preceded the hit sandbox game by seven years and is considered one of the frontrunners of the online virtual world industry, among the greats like Second Life and World of Warcraft.

But despite an IPO and hundreds of millions of active players (even outranking Fortnite during the pandemic), Roblox has struggled to find the growth to satisfy eager investors. Since the company controls a large percentage of in-game transactions, it hasn’t been profitable for outsiders to venture into the game and begin building – until now.

College friends Ben Khakshoor and Sam Drozdov got together during COVID to find a way to make money in the metaverse – a new term for virtual worlds with smaller worlds and communities within them. On a hiking trip, they built a minimum viable product for Bloxbiz, the first product for displaying advertisements (aka adtech) based in Roblox.

To create their revolutionary in-game billboard ads, Sam and Ben had to teach themselves how to pitch advertising on Roblox as well as how to build in Roblox’s coding language. To learn, they reached out to an astounding number of contacts including every single marketer in their LinkedIn connections.

Their efforts resulted in a product that now reaches 75 million active Roblox players every month and a $17.5 million acquisition offer from Super League gaming. The acquisition catapulted the two founders to riches and executive-level seats at a business that works with the likes of Netflix, Logitech, and Top Golf.

Here’s how these two recent college graduates may have made Roblox profitable for creators and changed their career trajectory forever.

An Extremely Productive Walk in the Woods

When COVID hit the US, many found themselves either out of a job or looking for the door. During this time, Sam and Ben both left their prestigious tech jobs and took the plunge that would change their lives forever.

Ben and Sam’s friendship had always centered around entrepreneurship. It began when Ben brought an education technology startup he’d created to the University of Maryland College Park’s incubator – a university program to help startups in their infancy with seed funding, mentorship, and facilities – called Startup Shell. 

At the time, Sam was the director of Startup Shell. After successfully pitching his product, Ben joined the incubator and later took Sam’s position as director after he graduated. The two became fast friends and kept in touch when Ben took a job as product security engineer in New York City and Sam moved to San Francisco to become a product designer for Facebook. 

Over those three post-college years, the two friends brainstormed projects based in virtual worlds. “The metaverse reminded us of the early days in the web,” says Sam. “People first built all these websites and then took a step back to figure out how to monetize. We were trying to figure out how to monetize in these spaces. I’ve been a gamer my whole life so I’d been playing around a lot in Fortnite creative and I even built a server in Minecraft back in the day. I felt comfortable in the metaverse.”

Games like Fortnite and Minecraft attracted huge mainstream followings, but Sam and Ben were increasingly drawn to the game Roblox. Designed for tweens, it’s a game that allows players to create mini-games within the game. As of 2021, it had 202 million active monthly users.

Roblox is a virtual world where developers can create unique games and entire worlds for other players.

But despite a huge player base, Roblox had a big problem with monetization. While there were a reported 1.7 million Roblox game creators in 2017, they only made an estimated $30 million between them that same year (about $17 per creator). While that revenue had increased slightly by 2021, it wasn’t enough to attract sufficient outside interest. Roblox creators craved other sources of income. With millions of players on the platform, it was an ecosystem ripe for ads.

You can build Minecraft in Roblox, but you can’t build Roblox in Minecraft.

“Roblox was unique in that it was the fastest-growing platform at the time,” says Sam. “There were already in-game ad companies for other games but no one was working in Roblox. We thought it most represented the metaverse concept as there were so many worlds within one game. I always say you can build Minecraft in Roblox, but you can’t build Roblox in Minecraft.”

To create their advertising product for the game, Sam and Ben began networking with developers in the space to find out their pain points. They did most of their outreach through Twitter. “We sent something like a hundred DMs a day,” says Sam. “Fortunately, many Roblox devs are extremely active on Twitter and make it public that they are Roblox developers so they were easy to find.” 

Over the following months, the two cofounders slowly built up a working knowledge of the platform and its coding language, Lua, by talking to developers. In 2020, Sam moved from San Francisco to New York City.  When COVID struck in 2021, both quit their jobs in New York and spent the year working more seriously on their project. During this period, the two went on a multi-day hiking trip that resulted in Bloxbiz. “It was a six or seven-day trip,” says Ben. “We decided to take a rest in the middle and hack. Bloxbiz was the idea we built during that break.”

Learning Sales From LinkedIn Contacts

Sam and Ben now had their MVP. However, they still had a tough road ahead. Neither had spent much time in the game or had any experience selling ad space to large businesses.

Sam and Ben’s networking helped them move fast when validating their initial product with the Roblox community. “When we were just starting, we met a prominent Roblox developer through an article he’d written on Medium with perfect SEO,” says Sam. “We reached out on Twitter, set up a call, and he taught us how Roblox compares to other platforms. Later, when we made our proof of concept, we built a landing page and sent it to him for feedback. He also shared our idea with his network for feedback which was super helpful.”

Bloxbiz’s first core product was a 3D advertising billboard that creators could place in their Roblox games. To factor in views from players (an important metric for advertisers), Sam and Ben created a proprietary system tracking how much screen space a billboard occupied and for how long.

Once they’d completed their first iteration of Bloxbiz, Sam and Ben had little trouble getting Roblox developers to use their software. They already knew they were solving a major problem for them and had zero competition at the time.

“We built the very first ad platform for Roblox,” says Sam. “Most developers were interested because if we were successful they made more money. The community was also interested because it was the first time people from outside of Roblox had come in to build tools for them. We were the start of a new wave.”

It was easy to convince Roblox developers to monetize their games, but convincing companies to advertise on Roblox was much harder. So difficult that it led to the eventual sale of Bloxbiz.

“Usually with an ad platform you can do a programmatic integration with another ad platform like Google to put ads in automatically,” says Sam. “But because of how Roblox works, those integrations don’t exist. We needed to do sales from scratch.”

A screenshot of Bloxbiz billboards in Roblox

To attract more Roblox advertising clients, Sam and Ben embarked on another cold outreach campaign to learn everything they could about marketing.

“We started reaching out to every connection on LinkedIn in marketing,” says Sam. “We made a spreadsheet of 200 people, reached out to each person, and asked them about the space and if they’d buy ads on Roblox. We also asked them who else they’d recommend we talk to. We learned so much about the industry and how to talk the talk and walk the walk.”

As the product developer, Sam was also the de-facto sales team. But even with all the marketing knowledge gleaned from LinkedIn, he was floundering in unfamiliar territory. 

“We had months where nothing happened,” he says. “You don’t just meet a business and then get ads from them. You have one meeting to meet everyone and then you have one meeting where you share your proposal. After that, you may have another meeting if they accept your proposal. Starting from scratch can take a whole business quarter. We were bad at it so the cycle was slower.”

Sam and Ben spent the next six months getting rejections from potential advertisers before realizing things weren’t working. “There were no maybes, just no’s,” says Sam. “People were interested, but they’d still say no. We didn’t know how to speak their language and couldn’t guarantee an ROI because it hadn’t been done before. We expanded our knowledge of sales, but learned we shouldn’t be the guys doing them. I remember submitting to Disney and I had to look up what a ‘request for proposal’ (a formal process for bidding on contract work for clients) was.”

Sam and Ben decided to outsource sales to third parties – a method they learned from marketers during their LinkedIn outreach. “There are commission-based companies out there that will act as a reseller,” says Sam. “One company we worked with was Super League that later bought us. Another was a company called Venatus that sold on our behalf in the UK and made us an international company.” 

After contracting with Super League and Venatus, sales began to take off. “We grew to 20-plus salespeople in three months,” says Sam.

With two strong sales channels, Bloxbiz finally started making revenue. Just how much Sam and Ben aren’t at liberty to tell us, but it was enough to get them acquired.

How to Know When to Sell

Although Sam and Ben struggled to find market-fit for their product, they knew they were on the right track because they had received acquisition offers at the start.

“Aa company offered to buy us very early on,” says Sam. “They made an offer and we got scared we were getting ripped off. We countered by reaching out to competitors like Super League and then decided not to sell.”

However, with Roblox’s IPO and increased interest in the metaverse in 2021, Sam and Ben realized they needed to grow fast or get left behind. “We were thinking about fundraising or selling,” he says. “The challenge of fundraising was that VCs weren’t interested in adtech at the time.”

Super League gaming hosts esports tournaments and special events in virtual world games, building their reputation creating events in Minecraft.

While VCs didn’t understand the product, their sales partner, Matt Edelman at Super League did. He convinced the team at Super League to make an offer to acquire Bloxbiz at $17.5 million. “They work in gaming so we were very aligned in our visions,” says Sam. “They already do stuff with Minecraft.”

Now Sam and Ben work as executives at Superleague. Sam is the Vice President of Metaverse Products and Ben the Vice President of Engineering for Metaverse Products – their primary product is the newly-acquired Bloxbiz.

“We like Super League because they’ve let us run with our roadmap,” says Sam. “We’ve also been given a lot of responsibility beyond Bloxbiz, and they’ve provided us with a lot of resources like engineers.”

“It’s nice that we can now focus completely on product while they focus on sales,” says Ben.

In hindsight, Sam’s advice for founders is to focus ruthlessly on the important things and to make sure you don’t neglect networking. He believes he and his cofounder’s outreach when validating and marketing Bloxbiz was essential to its success.

We’d only spend money to automate parts of our product when we couldn’t handle operations ourselves.

Ben encourages founders to make sure they’re making decisions based on data and not assumptions. “We always built an MVP and showed it to developers first before deploying it. We’d only spend money to automate parts of our product when we couldn’t handle operations ourselves,” he says. “In the beginning, I’d manually enter all ads into our software instead of using a program even though it took more time. I wanted to be sure we had demand before spending money.”

Ben and Sam validated their product long before launch – and likely dodged total product failure by taking advice from experienced mentors. When you’re building your product, consider building in public. It might be the difference between a failed product and getting acquired.

References

https://www.forbes.com/sites/dbloom/2021/10/07/super-league-gaming-buys-roblox-ad-platform-bloxbiz/?sh=5913db496784

https://web.archive.org/web/20210106144257/https://www.superdataresearch.com/blog/2020-year-in-review

Roblox User and Growth Stats 2022 (backlinko.com)

Andrew Gazdecki
Andrew Gazdeckihttps://acquire.com
Andrew is an award-winning serial entrepreneur with three exits. He’s the founder and CEO of MicroAcquire, the world’s most founder-friendly startup marketplace, and its rebellious child, Bootstrappers, which gives voice to the entrepreneurial underdog. When not building businesses, he writes for Forbes, Entrepreneur, and now, Bootstrappers.

Stay in the Loop

Get our weekly newsletter wrap-up with all the latest news in the Bootstrappers community.

Latest stories

You might also like...