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How Roblox’s creator accelerator helps the gaming giant build new platform opportunities

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As Roblox eyes what could be a historic debut on public markets in the coming months, investors who have valued the company at $29.5 billion are certainly eyeing the gaming company’s dedicated and youthful user base, but it’s the 7 million active creators and developers on the Roblox platform that they are likely most impressed by. 

Since 2015, Roblox has been running an accelerator program focused on enabling the next generation of game developers to be successful on its platform. Over the years, the program has expanded from one annual class to now three, each with now around 40 developers participating. That means over 100 developers per year are working directly with Roblox to gain mentorship, education, and funding opportunities to get their games off the ground.  

As the company’s efforts on this front have grown more formalized, Roblox in 2018 hired a former Accelerator alumni Christian Hunter, a Roblox gamer since age 10 and game developer since 13, to run the program full-time. Having been through the experience himself, Hunter brought to the program an understanding of how the Accelerator could improve, based on a developer’s own perspective. 

However, the COVID-19 pandemic threw the company’s plans to run the program into disarray. Instead of being able to invite developers to spend three months participating in classes hosted at Roblox’s San Mateo office, the company had to revamp the program for remote participation. 

As it turned out, developers who were used to playing and building games taking place in virtual worlds quickly adjusted to the new online experience. 

“Before COVID, everyone was together. It was easier to talk to people. [Developers] could just walk up to someone that was on our product or engineering team if they were running into issues,” explains Roblox Senior Product Manager Rebecca Crose. “But obviously, with COVID-19, we had to switch and think differently.”  

The remote program, though differently structured, offered several benefits. Developers could join the program’s Discord server to talk to both current participants and previous classes, and reach out and ask questions. They could also participate in the Roblox company Slack to ask the team questions, and there were more playtests being scheduled to gain reactions and feedback from Roblox employees.

Meanwhile, to get to know one another when they couldn’t meet in person, developers would have game nights where they’d play each other’s games or others that were popular on Roblox, and bond within the virtual environment instead of in face-to-face meetings and classes. 

The actual Accelerator content, however, remained fairly consistent during the remote experience. Participants had weekly leaders standup, talks on topics like game design and production, and weekly feedback sessions where they asked Roblox engineers questions. 

But by its nature, a remote Accelerator broadend who could attend. Instead of limiting the program to only those who could travel to San Mateo and stay for three months, the program was opened up to a more global and diverse audience. This drove increased demand, too. 

The 2020 program saw Roblox receiving the largest number of applications ever — 5 times the usual number.

As a result, the class included participants from five countries: The Philippines, South Korea, Sweden, Canada, and the U.S. 

The developers at IndieBox Studios saw the program as a chance to double down on their game development side hustles. The young friends spread across the UK and Kentucky spent their time during the accelerator scaling up their photorealistic title called Tank Warfare.

“We’ve actually never once met in real life, like we’ve been friends for going on what nine years now,” Michael Southern tells TechCrunch. “We met on Roblox.”

IndieBox is representative of many of Roblox’s early developer teams, younger gamers that have spent more than a decade learning the ins and outs of the evolving Roblox gaming platform.

“We all joined Roblox way back in 2008,” IndieBox’s Frank Garrison says. “But we only started developing on the platform in 2019. And for us, the decision to choose Roblox was more down to like, well it’s what we know, why not give it a bash?” 

The demographics of the accelerator have been shifting in other ways as the developer base grows more diverse.

“I would say, in the beginning, it was mostly young males. But as we’ve watched the program evolve, we’ve been getting so many new interesting teams,” notes Program Manager Christian Hunter. 

The 2020 program had more women participants than ever, for example, with 12 in a class of 50. And one team was all women. 

The age of participants, who are typically in the 18 to 22 year-old range, also evolved. 

“We’ve seen a lot more older folks,” Hunter says. “With [the COVID-19 pandemic], we actually saw our first 50-year old in the program. We’ve never had anyone older than, I’d say, 24. And in 2020, we had 12 individuals over the age of 30,” he notes. 

Two of the teams were also a combination of a kid and a parent. 

Shannon Clemens learned about the Roblox platform from her son Nathan, learning to code and bringing her husband Jeff in to form a studio called Simple Games. Nathan’s two sisters help the studio part time, as well as his friend Adrian Holgate.

“Seeing [my son’s] experience on Roblox getting involved with the platform, I thought it would be neat to learn how to make our own games,” Shannon Clemens told TechCrunch.

Their title Gods of Glory has received more than 13.5 million visits from Roblox players since launching in September.

“Our whole family is kind of creatively bent towards having fun with games and coming up with things like that,” Jeff Clemens tells us. “Why would we not try this? So, that’s when we applied to the program and said, ‘well, we’ll try and see if we get accepted,’ and we did and it’s been awesome.”

In addition to the changes facilitated by a remote environment, Roblox notes there were other perks enabled by remote learning. For one thing, the developers didn’t have to wake up so early to benefit from the experience.  

“With it being remote, the developers were working their hours,” says Crose. “As a developer, we tend to work later and stay up at night. Having them come in at 9 AM sharp was very difficult. It was hard for them because they’re just like…a zombie. So we definitely saw that by letting them work their own hours, [there is] less burnout and they increase their productivity,” she says. 

Though the COVID-19 crisis may eventually end as the world gets vaccinated, the learnings from the Accelerator and the remote advantages it offers will continue. Developers from the program hope that the growth seen on gaming platforms like Roblox continues as well.

“The pandemic has been great for most game studios,” developer Gustav Linde tells TechCrunch. “Obviously, it’s a very weird time, but the timing was good for us.”

The Gang Stockholm, a Swedish game development studio co-founded by Linde, has been building branded experiences for clients exclusively on the Roblox platform. The team of 12 has used the accelerator to slow down development deadlines and dig into some unique areas of the platform.  

“If you look at Steam and the App Store and Google Play, those markets are extremely crowded, and Roblox is a very exciting platform for developers right now.” said Linde. “Roblox is also getting a lot of attention and a lot of big brands are interested in entering the platform.”

Roblox says that going forward, future Accelerator programs will feature a remote element inspired by the COVID experience. The company plans to continue to make its program globally available, with the limitation for now, of English-speaking participants. But it’s looking to expand to reach non-English speakers with future programs.

The fall 2020 Accelerator class graduated in December 2020, and the next Spring class will start in February 2021. The applications are being reviewed now with a decision to be finalized soon. The next class will have some 40 participants, as is now usual, and Roblox will again aim to diversify the group of participants.

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Snowflake latest enterprise company to feel Wall Street’s wrath after good quarter

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Snowflake reported earnings this week, and the results look strong with revenue more than doubling year-over-year.

However, while the company’s fourth quarter revenue rose 117% to $190.5 million, it apparently wasn’t good enough for investors, who have sent the company’s stock tumbling since it reported Wednesday after the bell.

It was similar to the reaction that Salesforce received from Wall Street last week after it announced a positive earnings report. Snowflake’s stock closed down around 4% today, a recovery compared to its midday lows when it was off nearly 12%.

Why the declines? Wall Street’s reaction to earnings can lean more on what a company will do next more than its most recent results. But Snowflake’s guidance for its current quarter appeared strong as well, with a predicted $195 million to $200 million in revenue, numbers in line with analysts’ expectations.

Sounds good, right? Apparently being in line with analyst expectations isn’t good enough for investors for certain companies. You see, it didn’t exceed the stated expectations, so the results must be bad. I am not sure how meeting expectations is as good as a miss, but there you are.

It’s worth noting of course that tech stocks have taken a beating so far in 2021. And as my colleague Alex Wilhelm reported this morning, that trend only got worse this week. Consider that the tech-heavy Nasdaq is down 11.4% from its 52-week high, so perhaps investors are flogging everyone and Snowflake is merely caught up in the punishment.

Snowflake CEO Frank Slootman pointed out in the earnings call this week that Snowflake is well positioned, something proven by the fact that his company has removed the data limitations of on-prem infrastructure. The beauty of the cloud is limitless resources, and that forces the company to help customers manage consumption instead of usage, an evolution that works in Snowflake’s favor.

“The big change in paradigm is that historically in on-premise data centers, people have to manage capacity. And now they don’t manage capacity anymore, but they need to manage consumption. And that’s a new thing for — not for everybody but for most people — and people that are in the public cloud. I have gotten used to the notion of consumption obviously because it applies equally to the infrastructure clouds,” Slootman said in the earnings call.

Snowflake has to manage expectations, something that translated into a dozen customers paying $5 million or more per month to Snowflake. That’s a nice chunk of change by any measure. It’s also clear that while there is a clear tilt toward the cloud, the amount of data that has been moved there is still a small percentage of overall enterprise workloads, meaning there is lots of growth opportunity for Snowflake.

What’s more, Snowflake executives pointed out that there is a significant ramp up time for customers as they shift data into the Snowflake data lake, but before they push the consumption button. That means that as long as customers continue to move data onto Snowflake’s platform, they will pay more over time, even if it will take time for new clients to get started.

So why is Snowflake’s quarterly percentage growth not expanding? Well, as a company gets to the size of Snowflake, it gets harder to maintain those gaudy percentage growth numbers as the law of large numbers begins to kick in.

I’m not here to tell Wall Street investors how to do their job, anymore than I would expect them to tell me how to do mine. But when you look at the company’s overall financial picture, the amount of untapped cloud potential and the nature of Snowflake’s approach to billing, it’s hard not to be positive about this company’s outlook, regardless of the reaction of investors in the short term.

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A first look at Coursera’s S-1 filing

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After TechCrunch broke the news yesterday that Coursera was planning to file its S-1 today, the edtech company officially dropped the document Friday evening.

Coursera was last valued at $2.4 billion by the private markets, when it most recently raised a Series F round in October 2020 that was worth $130 million.

Coursera’s S-1 filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year. It paints a picture of growth, albeit one that came at steep expense.

Revenue

In 2020, Coursera saw $293.5 million in revenue. That’s a roughly 59% increase from the year prior when the company recorded $184.4 million in top line. During that same period, Coursera posted a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

Notably the company had roughly the same noncash, share-based compensation expenses in both years. Even if we allow the company to judge its profitability on an adjusted EBITDA basis, Coursera’s losses still rose from 2019 to 2020, expanding from $26.9 million to $39.8 million.

To understand the difference between net losses and adjusted losses it’s worth unpacking the EBITDA acronym. Standing for “earnings before interest, taxes, depreciation and amortization,” EBITDA strips out some nonoperating costs to give investors a possible better picture of the continuing health of a business, without getting caught up in accounting nuance. Adjusted EBITDA takes the concept one step further, also removing the noncash cost of share-based compensation, and in an even more cheeky move, in this case also deducts “payroll tax expense related to stock-based activities” as well.

For our purposes, even when we grade Coursera’s profitability on a very polite curve it still winds up generating stiff losses. Indeed, the company’s adjusted EBITDA as a percentage of revenue — a way of determining profitability in contrast to revenue — barely improved from a 2019 result of -15% to -14% in 2020.

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The owner of Anki’s assets plans to relaunch Cozmo and Vector this year

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Good robots don’t die — they just have their assets sold off to the highest bidder. Digital Dream Labs was there to sweep up IP in the wake of Anki’s premature implosion, back in 2019. The Pittsburgh-based edtech company had initially planned to relaunch Vector and Cozmo at some point in 2020, launching a Kickstarter campaign in March of last year.

The company eventually raised $1.8 million on the crowdfunding site, and today announced plans to deliver on the overdue relaunch, courtesy of a new distributor.

“There is a tremendous demand for these robots,” CEO Jacob Hanchar said in a release. “This partnership will complement the work our teams are already doing to relaunch these products and will ensure that Cozmo and Vector are on shelves for the holidays.”

I don’t doubt that a lot of folks are looking to get their hands on the robots. Cozmo, in particular, was well-received, and sold reasonably well — but ultimately (and in spite of a lot of funding), the company couldn’t avoid the fate that’s befallen many a robotics startup.

It will be fascinating to see how these machines look when they’re reintroduced. Anki invested tremendous resources into bringing them to life, including the hiring of ex-Pixar and DreamWorks staff to make the robots more lifelike. A lot of thought went into giving the robots a distinct personality, whereas, for instance, Vector’s new owners are making the robot open-source. Cozmo, meanwhile, will have programmable functionality through the company’s app.

It could certainly be an interesting play for the STEM market that companies like Sphero are approaching. It has become a fairly crowded space, but at least Anki’s new owners are building on top of a solid foundation, with the fascinating and emotionally complex toy robots their predecessors created.

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