By Stephen Schochet
Contrary to popular belief, Walt Disney spent more time as a struggler than a success. Described at a various
times as a visionary and a genius there were actually many occasions he
could not foresee the results of his ideas, and they nearly brought him
to financial ruin. Yet the lessons he learned through the years are useful and timeless.
1) Ownership is key: Early in his career, Walt created a character on
behalf of Universal Studios named Oswald the Rabbit. When he tried to
negotiate better payments for himself, Walt was informed that
Universal had the copyright on the character and he was entitled to
no compensation. From then on Walt owned everything he created.
2) Have passion for your product: Walt worked three long years on
Snow White and The Seven Dwarfs (1937) which was originally budgeted
at a $500,000 an extraordinary amount considering the average cartoon
in the 1930s cost $10,000. His competitors, his wife and his brother
all predicted Disney would be ruined. During the filming, Walt was
plagued with both health and financial problems as Snow White ran way
over budget. Needing an additional half million to complete the
picture, he acted out the story in front of a tough-minded banker and
got the loan he needed. The result was a classic that made $8,000,000
at a time when movie tickets cost 25 cents for adults and a dime for
kids.
3) Make timeless products: Pinocchio (1940), Fantasia (1940) and
Bambi (1942) all failed in their first releases. World War II cut off
international distribution. The national mood turned away from public
sentiment. Disney plunged four million into debt and it looked like
Bank Of America would cut off his line of credit. In a dramatic
meeting, the founder of the bank, A.P. Giannini stood up and told the
board members that Disney made great movies and that the war would
not last forever. They voted unanimously to keep Disney afloat after
the old man's speech. He was proven right years later when all three
films became profitable classics.
4) Test market: Walt could not get distribution on his first nature
film Seal Island (1949). After several frustrating months watching it
sit on the shelf, he found one movie theater in Pasadena willing to
show it. Seal Island, achieved full distribution, won the academy
award for best short subject and led to a series of highly popular
nature films.
5) Sometimes you need to pull the plug: Walt was determined to have a
circus at Disneyland despite his staff's advice not to. The idea
failed. A pretty trapeze artist lost her top while performing in
front of the kiddies helpless to prevent it. The camels kept spitting
into the crowd. The llamas got loose and ran down Main Street
scattering customers every which way. More than one performance of
this poorly attended venture ended with Walt burying his face in his
hands. He decided to kill it.
By learning lessons from each of his entrepreneurial attempts, Walt
always moved forward, which is a timeless business model.
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