Walt Disney
Innovation Hour
3/21/2013
This is Rich Harshaw from Monopolize Your Marketplace. We are here for
our MYM Insider Webinar on innovation. I’m going to do a full disclosure before
we start this webinar. The disclosure goes like this: I first went to Disney World
in 2011. Actually, I went when I was a kid. I went in 2011 with my daughter for a
band trip. I was so impressed with the experience that we ended up going back
that summer with my entire family and doing the full Disney World thing again. I
actually did it two times within about three or four months in 2011.
At the time, being the kind of person that I am, interested in things that
work well, I ended up researching and then buying a biography on Walt Disney.
That book was called – I probably should have put this somewhere, but I’ll tell you
what it was. Walt Disney, the Triumph of Imagination by Neal Gabler.
This is, according to my research, one of the best biographies on Walt
Disney. I’m going to encourage you to read that book if you feel like this is a
subject worth your time.
biographies.
Let me tell you something.
It’s one of my favorite types of books.
I’ve read a lot of
Probably my favorite
biography was the one on Steve Jobs. It gives you a lot of insight into that guy’s
brain. This one is right up there. I think it’s like a 1A and 1B in terms of some of
the best books that I’ve read. In fact, I tend to listen to books on audio book, and
then if they are sufficiently good, I may go back and buy them as a hard copy or
Kindle version; which I did on this book.
I’ll give you an example, on the Steve Jobs book.
I first bought the
abridged version. It was about ten hours long, but not nearly enough information.
I went back and bought the full unabridged version; somewhere in the
neighborhood of 30 hours long. I couldn’t get enough. It was one of those kinds
of books where you are disappointed when it’s over because you are just
sponging up the information.
The biography for Walt Disney, similarly, was about ten hours long,
abridged; and 33 hours long unabridged. I haven’t actually gone back to the
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unabridged version. I think I’m going to do it. It’s that good. This is interesting
stuff. If you are a student of business; if you are a student of innovation; if you
are a student of “stick-to-itness;” it’s a story that you really need to put on your
radar. I’m going to put it in your recommended reading list.
Here is the full disclosure part of this. I read the book and was very
fascinated by it. I got the idea that I was going to do an Innovation Hour episode
on Walt Disney about two years ago. I put it on the calendar a couple of times.
Every time that it started drawing close, I felt unprepared, even though I had
spent a lot of time reading and highlighting and notating. I think on two different
occasions, I’ve pushed it off; simply due to not having what I felt like was
adequate preparation.
Those of you who have been on my webinars before, I’ve been doing them
for a long time. One of the things I pride myself on is having a well-prepared
webinar and making sure that when I cover a topic, it’s covered thoroughly, there
is a coherent flow from start to finish. Here is the disclosure: I still feel like I am
woefully unprepared to give this webinar. I’m afraid it’s going to be a little bit
more disjointed than you are used to.
The reason is that it’s just such a massive topic. There is so much detail in
the story of Walt Disney’s life, and so many little, teeny pieces and parts of it are
so interesting and so telling and so descriptive of principles that are just
outstanding to learn and to read. It’s been a nightmare trying to assimilate it into
a short 45 minute presentation. I’ve really struggled with that. I’m telling you
right now that my encouragement for you is to take a little bit out of this webinar.
Hopefully, get you excited about the topic. I’m going to encourage you to go and
pick up one of a few books that are excellent on this topic. You can further the
study yourself. I’m telling you, the details of his life are absolutely incredible. It’s
really a fun read. I’ll think you’ll enjoy it.
Walt Disney
Innovation Hour
3/21/2013
That being said, we are going to jump into this with just a – like I said, I’m
going to do my best to patch together a few things. If you like it, great. If you
don’t, please don’t send me a scathing letter. I promise I will do better next time.
That being said, let’s look at the life Walter Elias Disney.
If you had to take and break it down and say; what is it about this guy
that’s worth talking about? That’s a funny thing. There are too many things to talk
about. Imagination is right at the top of the list and innovation. One of the things
that stuck out for me about this guy was his ability to persist. I’ll get into this a
little bit more later, but I’m just going to tell you. You’ve heard a lot of stories
about a lot of business people. They all have their ups and downs and their
struggles. That is par for the course.
Steve Jobs was fired from his own company. Here is what is interesting
about Walt Disney; this guy was flat, stinking broke for a huge part of his career.
Even after he was world famous, world adored, and one of the most famous
people on the planet; the guy could barely scratch two nickels together.
The reason is not because the company didn’t do well. It was because of
his fanatical obsession with doing things the best imaginable way possible. It
cost the studio and his company so much money that it was really hard to make
ends meet. We’ll get into a story later about the production of the movie Snow
White; their first full-length feature film that was budgeted at $250,000 and ended
up costing over $2 million to actually make.
This is the story of this company, okay? That being said, let’s just go
through a few of the things from an innovation standpoint. Let’s talk about some
of the innovations in animation. I think this is an interesting person because he’s
somebody that you probably know reasonably well because Disney is so
pervasive in our society and our pop culture. Most people don’t know a lot about
the man himself. I’m going to take you through some of the innovations that he
made in animation.
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Innovation Hour
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It’s easy to look at his body of work and say, “Well, he was just really good
at creating stories that people liked and Mickey Mouse was the big deal. I’m
going to tell you; my interpretation of this story is not that Mickey Mouse was a
big deal, it was the way that he treated Mickey Mouse. I don’t mean he treated
him kindly and nicely. It was the way that he treated the animation that made a
huge difference. He did things that had never been done before. People were so
amazed by the techniques and the things that he was doing that they had never
seen before. The character happened to be Mickey Mouse, which was a big
deal. It allowed Mickey Mouse to become far more popular than other characters
that were similar at the same time.
Let’s go through this a little bit here. The first major innovation he had was
he put a human in a cartoon world. He had a series. He had at least two major
series that he ran before Mickey Mouse was invented. The first one was called,
The Alice Shorts. Short meaning it was a short film. It had a longer name. I
apologize. I can’t remember it.
Anyway, it was called The Alice Shorts. He took a girl and there were
quite a few cartoons at the time that took – Hang on. I’ve got to get this story
straight. I told you. This was hard to put together. There were quite a few
cartoons that took live action movies and put cartoon elements into them. You
might see an animal walking around in a human world. Walt said, “I’m going to
do something completely different. I’ve got to turn this upside down. I’ve got to
make this something that people have never seen before.”
He took and drew an entire animated world and put a girl – She was four
years old. Her name was Alice. – Into the production. It was very, very unusual.
People had never seen anything like it. It was very successful. We’ll talk about
this a little bit later on. Financially speaking, it almost ruined him to create this.
In fact, the studio did go bankrupt. I’ll talk about that a little bit later, too. He was
the first one to put a human in a cartoon world. It was very, very interesting.
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Innovation Hour
3/21/2013
One of the things you have to consider as we go through this whole
discussion is that we take a lot of things for granted now in 2013 that were a
really, really big deal back then. The next thing he did, he was the first one to
sync sound with motion. This had never been done before in animation. All
cartoons of his day were backed with music soundtracks; symphony, orchestra,
and what not. There was not synchronization of the action to the music or to
people or characters saying things.
He saw the movie-- The first sound movie was The Jazz Singer with Al
Jolson. He saw this movie and said, “This is what we are going to do.” He had
an interesting way of approaching innovation. In those days; they were only
working on short movies; ones that would be shown at the movie theater, before
the full length feature film. The people would come into the theater, and they
would see the cartoons for a few minutes and then watch the movie. He would
take and experiment with things on these short cartoons. It really was not that big
of a risk. If it worked out, great. If it didn’t work out, that was okay too. He
decided he was going to do this.
I am going to find something over here real quick. Okay. Well, I can’t find
that thing I’m looking for here.
Again, sorry this is a little discombobulated
because I’m literally pulling from four different sources here.
Here is what he found out. Nobody knew how to sync motion with sound.
Nobody. It had never been done before, so it wasn’t just like he went and did the
standard industry protocol. He had to invent it himself. He found the equipment.
He found the people that could do it. He patched it together. And-- as would
become his bane throughout his entire career-- he found out that putting this kind
of sound to cartoons was going to be cost prohibitive.
His brother, Roy Disney, was his business partner his entire life. Roy was
kind of the financial backing, the operations guy, the voice of caution. Walt was
the overly optimistic, imagination, do anything you can think of guy. These guys
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Innovation Hour
3/21/2013
always had to balance this out. Roy says, “There is no way. We are not going to
do this. It can’t work. It’s not going to happen.” Roy put his foot down, and Walt
said, “It doesn’t really matter” and went and did it himself anyway. It ended up
costing him a lot of money.
Here is the interesting thing about this. If you look at the picture on the
screen right now. It is a picture of Steamboat Willie. This is the first cartoon to
ever feature sound that was synchronized to the characters. Famously, this
character, Mickey Mouse, Steamboat Willie; was whistling. It was unbelievable
to the audience. He would also hit cow’s teeth with xylophone hammer and it
was synchronized to the sound.
Here is what people don’t realize.
This actually was the third Mickey
Mouse cartoon. The first two were popular, and they were interesting; but it was
not until he added sound synchronization that this thing took off and shot like a
rocket to the moon. Think again about this character, Mickey Mouse, it became
the whole big thing. I’m going to talk about the origins of Mickey Mouse a little bit
later when we get into a discussion about adversity. It wasn’t until he put it to
sound that it really took off.
Now, the next thing he did was he was the first one to use a theme song.
The first theme song ever was “Who’s Afraid of the Big, Bad Wolf,” and The
Three Little Pigs. This thing took off. It sold $3 million copies. We’ll talk about
merchandizing later.
He thought if we are going to synchronize things and
characters are going to sing, then we can actually include songs and music and
sell those. That was one of his first.
Another one? He was the first one to use color. This is something we
take for granted now. It’s the same story as synching the sound with motion.
When he found out about a color process, we’ve all heard the word “Technicolor”
because we’ve all seen it when we were young. This was the process for making
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Innovation Hour
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things into color on film back in those days; whether it was a motion picture or a
cartoon, it was the same process.
There had been a process called two colors Technicolor that created
colors that were not good. It was not very aesthetically pleasing. Technicolor
created this three-color Technicolor process.
It had never been used in
animation. It had been used in motion pictures. It was very expensive. Walt
went and said, “This is it. This is the next big thing.” He signed a two year,
exclusive agreement with Technicolor without telling his brother, Roy. It was too
expensive.
They didn’t have the money.
He signed a two year exclusive
agreement, knowing this would be a big deal.
They actually took one of their shorts, it was called Flowers and Trees in
1932. They had almost completed the feature in black and white. He went and
said “Scrap the entire thing. We are going to start over and do it in color.” Roy
was already incensed because they had made this commitment that they couldn’t
afford to Technicolor, exclusivity. Now he wanted them to scrap this short. By
the way, in 1932, financially speaking, the studio was extremely financially
precarious.
Long story, short, they made the movie in color. You can go watch it.
YouTube “Flowers and Trees, Disney.” You can watch this movie. It looks very
primitive in today’s age, but it was so spectacular; it was so unheard of; it was so
unexpected by audiences; it actually won the Academy Award for animation that
year. It was the first of what became 48 Academy Awards that Disney won
during his lifetime. Flowers and Trees. That was the first thing.
The next thing was he was the first one to add depth. All of the cartoons
up until this point had been drawn in basically two-dimensional looking drawings.
This was now getting to about 1937. He created his— This is something that he
did not invent Technicolor. He licensed Technicolor, and was able to use it. He
actually invented a camera. It was called the multi-plane camera, where they
Walt Disney
Innovation Hour
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would take, if you understand how animation is done. They draw the picture and
then they shoot it on the film, so that it runs like an actual movie with multiple
frames per second.
It’s not just drawing; it’s actually taking a drawing and
converting it into film.
What they would do is create these drawings. Then they would create a
background drawing on top of and behind a transparency of the foreground
drawing. They would create multiple planes. It had four different levels where
they could move in and out different perspectives of the background so that it
would appear to move further in the distance or closer into the foreground. This
was a big deal.
Here is the problem with it. Number one, it didn’t exist, so they had to
invent it. They had to build it. It required four men to operate it, instead the
standard one man to operate it like a normal camera. Again, put the studio on
the brink of insolvency to do this. They had also did the same thing, where they
took an existing movie that was being produced the tradition way. They scraped
it. They shot it with the multi-plane camera. This was also the move was called,
The Old Mill, 1937. You can YouTube this one. It also won an Oscar because it
was so breakthrough, such an interesting thing.
The next big thing-– They were the first studio to create a feature length
film. Before that, cartoons were something that was exclusively shown before
movies. Walt Disney said, “Look, we are going to keep looking forward, not
looking back. We are going to do the next big thing and do something that has
never been seen before.” I’m going to read you a little something about this from
a book.
I’ve got to find this.
Hang on.
Sorry for not having this right at my
fingertips here, but this is really good stuff. Oh gosh. Look at this; I’m not going
to be able to find it. Well, I’ll just paraphrase it. Here is what happened:
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Innovation Hour
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He got this idea for this movie. It was Snow White and the Seven Dwarfs.”
He was afraid to tell anybody about it because he knew that he knew that it would
be met with rejection from everybody, inside the studio, outside the studio
because it had never been done. The doubts were: Would people sit through a
whole cartoon? Is this just geared for children? Would adults want to watch it?
How much is it going to cost? Is this something we can afford? Is this rational?
So he finally went to his wife and Roy and he said, “Look, I want to create
this movie, Snow White and the Seven Dwarfs.” Of course, they said, “This is
ridiculous. It can’t be done.” Hang on. I’ve got this. Just a second here. Okay.
Well, I’m disappointed. I can’t find this quote. Well, I can’t find this quote. I’m
sorry about about that. It’s hard to pull this all together. There are too many
sources.
Anyway, his wife said, “Why are you going to risk our entire financial
solvency on such a big risk?” He said “Because it’s the only thing that we can do
is move forward. We can’t move backwards.” This was his theme throughout his
entire career. We’ve got to move forward. We’ve got to find the next big thing.
We’ve got to stay ahead of the curve. We’ve got to do something that nobody
has ever done. I want to make this distinction here. This is not a case of just
simply producing quality. It’s one thing to produce quality; it’s another thing to be
first.
Let’s just take a pause and let’s just step aside for a minute and take a
quick look at this. In a modern day situation. I want to talk briefly about the
competition between Apple and Samsung as it relates to tablets and
smartphones. This is an interesting scenario. You’ve got the innovator, which is
Apple, who invented the smartphone as we know it, with touch screens and so
forth. Then you’ve got Samsung that comes along and they create the Galaxy
and all of this stuff. Now, more recently, you’ve got Blackberry come out. Earlier
this week, the CEO of Blackberry was taking a shot at Apple saying, “Hey, their
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Innovation Hour
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stuff was great five years ago, but it hasn’t really changed. We’ve got all these
new things. We are better. We are different.”
The reality is this, if you look at this scenario, this is why Apple is on top
and this is why other people are taking potshots and not making it happen. It’s
because it’s the one that gets there first is going to have the distinct advantage.
Here is the best upside that Blackberry has right now. The best upside they have
is that they are going to create a very high-quality product in an existing product
category. That is their very highest upside. Any innovations, they will quickly find
out that they put in place within that sphere called the smartphone with a touch
screen is going to be quickly copied and replicated by other competitors. Now,
there is this incrementalism going on of who can do it better. There are definitely
competitors that are trying hard and trying to make things better and different, but
it’s all very minor innovation, incremental innovation because the major
breakthrough innovation has already been made.
This is where Walt Disney lived, in the world of what’s the next big thing.
What is the next category that we can tackle? We are going to tackle putting
sound with motion; everybody else started doing it. We are going to put theme
songs, everybody else started doing it. We are going to put color, everybody else
started doing it. We are going to make a full length film. The catch up time for
his competitors was typically one to three years. By that time, they had set such
a standard, such a precedent, that it was extraordinarily difficult for the
competitors to catch up.
Here is what it says on the screen: Always looking for the next big thing.
You might be looking at this and say, “That doesn’t necessarily apply to us
because we are not Apple, we are not in the electronics industry.” I think this is
false thinking. I really do. Why would animation be any different? It’s so easy for
Walt Disney to sit there in 1932 and say, “Well, cartoons are what they are.
That’s what we do. Let’s focus on story. Let’s focus on characters. Let’s focus
Walt Disney
Innovation Hour
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on technique.” All of those things he did focus on, so that when he hit the major
innovation. It was not just a major innovation, it was a breakthrough. He was a
pioneer in adding weight to cartoons, to putting background images that moved,
to making things more life-like, to integrating shadows and movement and weight
into cartoons. Those weren’t the things that he was remembered for. Those
aren’t how he changed the world.
Let’s go to the next thing which is merchandising. This will be a little bit
shorter. Here is the interesting discussion on merchandising; one of the things
that you see with Walt Disney is that they were always getting into other lines of
business. Frequently, they were getting into other lines of business to finance
their main line of business. The main line of business was so innovative and so
new and the audience was not there or the investment required to bring the new
innovation out was so great, that they had to find ways to pay their bills while it
was being developed. That’s exactly what happened with merchandising. This is
not a new category. There had been merchandising before, but they really took it
to the next level.
During The Depression, particularly in the early to mid-1930's, this saved
their bacon. Three million watches were sold by 1935. There is a story about the
Lionel Train Company. They were in bankruptcy during The Depression. They
couldn’t sell enough to pay their bills. They licensed the Mickey Mouse train.
They sold something like 350,000 of them in a year. They ended up turning it into
$2 million in sales. It was a major boom for this company. It put them back on
the map, so to speak.
They had done $40 million in merchandising revenues by 1940.
Of
course, as you get through 1940, you get through The Depression; but then you
are staring right at World War II. They were the first to start merchandising theme
songs. I talked about that earlier. Let me give you a couple of numbers on that.
That might be interesting. The first one is “Who’s is Afraid of the Big, Bad Wolf”
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Innovation Hour
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was sold over a million times, including sheet music, having other artists that
covered it. If you can believe that, but they had it.
Later on in the 50's, Davy Crockett series was on television. We’ll talk
about television here in just a minute. They decided to put together a theme
song. They did it almost as a throw away. The producers thought that that it
wasn’t really a big deal, but it became a huge hit. It sold 10 million copies, spent
a month at number one on the billboard charts, and three other versions of the
theme song also made it to the top ten. Also, the Davy Crockett TV show led to
millions of coonskin caps being sold.
Mickey Mouse merchandise is everywhere. My wife and two daughters
went to Disneyland last week.
They came back with approximately $9,000
Mickey Mouse merchandise. Not quite that much, but pretty darn close. Here is
what Walt Disney did; he hired a guy named Kay Kaymen, who ended up being
their merchandising manager. This guy took it as his own business entity. He
really went to work and made it happen. Here is the interesting thing about this.
Is there something that you can do that won’t necessarily take away the focus of
your business, but that can fund your main innovation, your main business or just
add ancillary profits.
Let’s talk about television. The interesting thing about television, he saw
the potential early and held on to his rights.
I’m trying to toggle a digital
document here. I’m having a little trouble. Here it is. It says in 1936. You know
when TV came out commercially? It really wasn’t until after World War II. It was
in the late 40’s. It was about 1948. If you look at the history of television in terms
of adoption into American homes, it was very, very quickly adopted from about
1947 or 1948 to about 1952. During that five year period, it went from almost no
TV to almost full saturation in America.
This is 1936. This is a good dozen years before TV was even relevant at
all. There was an agreement with United Artists, who’s their distributor. At the
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time, the attorneys insisted in putting a clause in the contract asking Walt Disney
to sign over rights to exhibit his films on an experimental new technology. He
refused to sign it.
Here is the famous quote. “I don’t even know what television is, so I’m not
going to sign away my rights to something I know nothing about.” They ended up
not signing away those television rights.
It became one of the very brilliant
moves of his young career because it went on to be one of the major booms to
the company in the 1950’s. Understand what happened here in the history of the
company. During the 1930’s, they started to produce full-length feature films.
The movie, Snow White and the Seven Dwarfs, came out in 1937. It went into
production in 1934, in the height of The Depression.
This is a company that was trying to get on its feet during The Depression.
The movie was a massive success.
It cost $2 million to develop.
It did
something like $8.5 million in sales, which was a phenomenal, unheard of
amount of money at the time. It was Earth shattering. The subsequent movies
which was Dumbo, Pinocchio, and Fantasia, all did not do that well. They started
getting into World War II. I tell you, the company struggled through the war. It
was a very difficult period of time.
Here is what happened, as the 50’s rolled around, they had had a major
stagnation due to the war. When the war rolled around, they had to stop making
full length movies. They had to start rolling a bunch of short movies into longer
ones. In other words, they would put four shorts and call it a movie. Television is
what really got them back on the map when the 1950’s hit. They used it as a way
to raise money for Disneyland.
Walt Disney thought this was fantastic because it was a great way to get
paid to make commercials. That’s really what it ended up being. Let me see if I
can find this. We’re going to talk about TV and Disneyland all in the same one.
Let me just read this passage to you. I think it’s fairly interesting.
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It says:
One of the great paradoxes of Walt Disney’s life is that he never
cared very much about money, yet he was continually forced to think
about money because his dreams were so expensive to realize. “If you
want to know the real secret of Walt Disney’s success,” said Ward Kimble,
“is that he never tried to make money. Walt was a simple, honest basic
person with Midwestern values. An ethical man. Nothing he did was about
money; it was always about the project.”
Walt explained his views on making money this way “I’ve always
been bored when just making money. I’ve wanted to do things. I wanted
to build things, get something going. People look at me in different ways.
Some of them say that guy has no regard for money. It’s not true. I have
a lot of regard for money, but not like some people worship it as something
you’ve got to have piled up somewhere. I always thought of it in one way,
which is something to do with it.”
That was his mindset in the early 1950’s. He was looking for a way
to finance Disneyland. During that time, he averaged four or five hours of
sleep a night. His waking hours were focused on either planning the park
or brainstorming new financing schemes. One unlikely scheme -I’m going to get to that in a minute. He ended up selling stock to his
employees. Oh great. Here I go again. I can’t find the part that I want. Here is
what he did. He realized that he could get the television networks to pay him
money for programming. They had plenty of programming available of things that
they had done in the past that can now go on television. He went to this TV
station and said, “Here’s the deal, I will sell you the content. I need this content
because I’m trying to promote Disneyland.” They said, “We don’t want to have
anything to do with Disneyland.” He said, “The reality is that I need money for
Disneyland.”
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He ended up going into a partnership with ABC and they took part
ownership of Disneyland in exchange for this. Here was the great thing about
TV; it was just a big, fat commercial.
“Every time I thought about television, I thought about this park. I
knew that if I did anything like the park, it would have to have a medium
like television to let people know about it.” Here are the two biggest
networks, NBC and CBS, both were eager to air Disney programming.
The moment he mentioned his park, however, they changed the subject.
They didn’t want any part of Disneyland. He went to the smaller network,
ABC, and made a pitch to executive, Don Tatum.
“He didn’t have any visual material to refer to,” Tatum recalls.
“Even so, he drew such a dramatic, vivid description that left with a great
deal of enthusiasm. Our people didn’t understand what he was talking
about,” so ABC turned him down.
What did he do? Here’s what he did, he went to one of the top artists that
he trusted the most, and he said, “We’re going to go in and we are going to pitch
Disneyland to the network, to ABC.” Here is what we’ve got to do; we’ve got to
be able to show it to them visually so the board would be able to understand it.”
On Saturday morning, the meeting was on Monday afternoon. He said, “What
we’ve got to do is who them a rendering of the park.” The artist looked at him and
said, “That’s a great idea. Let me see the rendering.” He said, “No, you don’t
understand. That’s why I’m here to talk to you. You need to create the rendering
right now.” The guy says, “It’s impossible. It can’t be done.” He said, “Well, here
is what has to happen. If we don’t create this rendering so that we can create the
We need to show the network what this is all about, then we’re not going to get
on television and this park is never going to happen.”
So they sat down. Walt explained to him, in vivid detail, what he wanted to
include in this park. In two days -- all day, all night, for two straight days -- this
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guy drew out the entire rendering of Disneyland, which he then took to the
meeting and sold it to the board and made them a partner in the Disneyland Park.
They used television to promote everything Disney. It was a brilliant, brilliant
solution.
Here is the question I have for you: Can you do this? The answer is you
probably can, more so than you think. Let me tell you why, and let me tell you
how. I’m actually going to be doing a webinar, I think it’s next month. I can’t
remember when it is. Look at the schedule. It’s coming up. I’m actually doing a
webinar on the topic of blogging, which seems pretty unrelated to what we are
talking about now. I’m going to talk about blogging next month.
When it talks about blogging, one of the main things I want to talk to you
about is your ability, because you are an expert in your field, to become a
provider of information on that topic, through a blog and/or through companies
that would like to have that information that can expose you to a larger audience.
Let me give you a very specific example from my own file. I partnered with a
company called Qualified Remodeler Magazine. I had a discussion recently with
the editor of the magazine that went like this:
“If you could wave a magic wand and get as much quantity of articles,
information from me as you could possibly stand, what would that look like?” He
sheepishly hemmed and hawed. He said, “Maybe a couple times a month, every
month, every two months.” I said, “What if you could get something from me
every single week.” He said, “What do you mean every week?” I said, “I don’t
know, every week. What if I could deliver content to you every week?” He didn’t
even understand the question because it’s something that’s never been done.
He said, “I’m lucky to get content from my contributors every other month. I have
to badger them and hound them.” I said, “What if I could produce content for you
every single week.” He said, “It would be an editor’s dream. I can’t even ask for
that because I just couldn’t do it. It’s so unheard of. It’s so unprecedented.” I
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Innovation Hour
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said, “Well, what if I was able to produce it.” He said, “We would set up your own
blog on our website that you could post to as much as you wanted and gain
exposure to our entire audience.” I said, “Okay.”
What’s the cost of that from my perspective? The cost of that from my
perspective is the cost of putting together a 300 to 600 word article as often as I
want. Is that hard to do? Well, do you have information on your subject on your
topic, on your general thing that you do that you could put out there? Are there
people that are interested in that?
Let me talk specifically to you home improvement guys. I’ll cover this in
more detail later. You home improvement guys understand, every town has a
local newspaper. Every local newspaper has a need for content. If you can fill
that content with good, unbiased, objective, interesting information; you can pull
of what Walt Disney has done. There is always going to be editors that need
content. If you can become a content supplier. You say, “Well, that’s outside of
my normal business.”
Walt Disney was a creator of content. That’s what Walt Disney does. Why
can’t you create content?
You say, “I’m just a roofer.”
Well, expand your
horizons a little bit because here is what’s going to happen. If you do that, not
only are you going to fill some content, not only are you going to get some
eyeballs, but you are also going to get some really good links coming into your
website from the local newspaper that is going to in an extremely beneficial way,
help your SEO. It’s going to push you right up through the roof.
This was innovation and television.
He also was an innovator and
television. He pushed for color. In fact, in 1952 they were on ABC still, he
pushed to have as many of the segments as possible in color, even though,
almost every television set in the country was in black and white. He still wanted
to broadcast in color. In 1955, they ended up switching to NBC. The entire
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broadcast was in color. In fact, he changed the name from “The Wonderful World
of Disney” to “The Wonderful World of Color.”
You think the television set manufacturers were thrilled about this? Of
course they were. It pushed everybody into getting color televisions a lot sooner
than they otherwise would have so that they can see this color stuff. If you are
sitting there watching the wonderful world of color on your black and white
television, you feel gipped.
Always pushing the envelope. Always pushing for quality. Theme parks,
you are probably familiar with. Before Disney World and Disneyland, amusement
parks were unclean, nasty, and there was nothing really for adults to do. He
traveled the whole country looking at theme parks, amusement parks, fairs,
everything, trying to find out what was best, trying to get ideas. He wanted what
he called “the complete emersion experience” where you could walk through that
gate and leave the entire world behind while you were there.
If you’ve been to Disneyland or Disney World, I think he’s pretty well
accomplished that. After he created Disneyland, he felt like it was too small. It
was not in a good area of town. He wanted something grander, so he started the
Florida project. He ended up buying 27,000 acres in Florida. If you know the
story behind that, he did it almost completely in secret, buying up this land
because he didn’t want other people to know what he was doing and it would
start driving the land prices up.
I went to Disney World twice, two years ago. Just to give you a little bit of
an idea of some of the things that are going on in Disney World, I actually went to
Disneyland in 1999. It was a good experience because it was interesting and
fun.
I had two little children with me.
It was also a frustrating experience
because the lines were so long that it became really, not that fun.
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So this was on my mind, of course, trying to find the best time of the year
to go so that you are not hitting all the peak times. When I got there in 2011, they
had this thing called, the fast pass. This is genius. The fast pass is a little kiosk
at some of the most popular rides. This is not at every single ride at the park, but
it’s at the biggest, best, funnest attractions. You stick your pass, the ticket that
you get at the beginning of the park. It’s all electronically monitored. It gives you
a fast pass out of the bottom slot, almost like an ATM.
You can see there on the right-hand side, that’s a picture of a fast pass on
July 12, 2011. That’s when I was there. It says, “Come back between 8:10, 7:10,
and 8:00 p.m.” So it’s a 50 minute window. Not always 50 minutes, but in this
case it was a 50 minute window. When you go back to that ride, there are two
lines.
There is a general admission line, and there’s a fast pass line.
The
general admission line is going to take anywhere from 40 minutes to an hour plus
to go through, but the fast pass line, because they only dole out a limited number
of passes, allows you to get in and ride the rides very quickly.
Now, interestingly enough, earlier that same year in 2011 during Spring
Break, I had taken my kids to SeaWorld. SeaWorld is in San Antonio, the one I
went to. They had their own version of this fast pass. Thiers worked a lot
differently. Theirs was a deal where, for an additional fee – you pay $70 to get
into the park – for an additional $35 dollars, you can buy a fast pass that worked
for any of the rides any time of the day. They would give you a wristband.
Nevertheless, they had their fast pass, but it was a lot different experience
because only the people that were willing to pay the extra $35 were able to use
these fast passes. Me, being impatient, decided to buy that for my family. We
did have the fast pass at SeaWorld. It was a really awkward experience. Here is
what would happen. Everybody in the park knew that there was a fast pass line.
Let’s say that maybe only 5% of the guests had actually bought the additional fast
passes. I remember going on one particular ride, which was some sort of a raft
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ride, and the line was well over an hour long. That sucker was long. We went to
the fast pass line, walked straight up to the front and in so doing; we ended up
walking passed the other line where all the other people were waiting. They were
looking at us like we were privileged jerks.
We got up to the front.
We ended up waiting about one and a half
minutes. We could feel the wrath, envy, and anger of everyone else. Now, we
had paid our money, so we went on it anyway.
I’m telling you, it was
uncomfortable. We felt uncomfortable. I guarantee you that the people that were
standing in line watching us entitled jerks going on this line, were hating it.
Disney said, “No, that’s not how it’s going to work. You buy your ticket to
the amusement park. We are going to allow everybody to use our fast pass
system.” Interestingly enough, one of the things that they did is they spaced out;
they put their best ride in the four corners of the park, so that you had to walk a
distance to get to them. This kind of spread out the traffic a little bit. The fast
pass, based on my experience, and also my wife’s experience having gone just
this past weekend to Disneyland; she said, “You know what, this is great. Yeah,
you wait in line for some of the ride, but the best rides you don’t have to wait in
line for.” It worked out great.
This is the kind of innovation that is working over there at Disney. Of
course, they are famous for having their parks be spotless and clean. People that
can give you directions; all of these different things that are executed well at
Disney. I’ll tell you what, when I took my family there in 2011, I had five of my
kids, my oldest kid was not with us. He was working and wasn’t that interested.
There were seven of us. For seven of us to go for four days, the tickets alone
were $1,700. I’m telling you, the park was crowded. It’s not like we were the only
ones there. It’s expensive. It’s expensive to execute this kind of quality, but if
you can pull it off, people will pay for it.
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We are running out of time. I’m surprised. We’ll talk about quality very
quickly here.
The goal is never to make money.
I’ve talked about that.
Innovations always cost a lot more than doing things the old way. Reputation is
built and sustains the company. The picture here is Shirley Temple presenting
Walt Disney the Oscar for Snow White and the Seven Dwarfs. You can see here
that they made up this unique Oscar that had one big Oscar and seven little
miniature statues to represent the seven dwarfs.
The story of Snow White and the Seven Dwarfs coming through
production is, by itself, a fascinating story. It took three and a half years. They
budgeted it originally at $250,000. The reason they budgeted $250,000 is that it
was going to be about twelve times longer than a regular feature. Their budget
for regular features was about $21,000. They said if it’s twelve times longer, it’s
twelve times the budget. They just multiplied the budget. They found out very
quickly that was not the case. Walt Disney insisted that every single step of the
way that everything be done exactly right. They went months just trying to name
the dwarfs. They went through story after story after story, to get it exactly right.
When they started to animated it, he wanted to make sure that there was
continuity in the production. There were two major philosophies that they could
have followed. One of the philosophies was that you have a single animator who
draws the same character through the entire movie, but that leads to a
discontinuity within a scene. Or you could have a single animator that works on
an entire scene, but that then potentially leads to a discontinuity throughout the
movie. What they did is they did it both ways. They had a manager that worked
with a guy that would draw a specific character and a guy that was in charge of
specific scenes. It ended up raising the cost so high, but $2 million later –
There’s a famous story in the middle of that about the budget hit $1 million
and they hadn’t even started animating the film yet. It hit $1.5 million and they
are borrowing money like crazy. They still hadn’t started animating it. They’ve
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only got something like four months until it was supposed to premier and they’ve
been spending all of this time on all of these technical details.
They had
animated it, but hadn’t started shooting it to film.
Then, there was a famous bank meeting where they had to go back to
Bank of America one more time. They took and patched together a final version
of the movie, but it had a bunch of sections that were just pencil drawings, black
and white, the ending didn’t even exist. Long story short, they show it to the
executive at Bank of America. He sits, watching it expressionless. Says nothing.
No tip of the hat to what he is thinking at all. Meanwhile, Walt and Roy are
sweating bullets. They were thinking, “We are not going to get the money.” If
they didn’t get the money, it was over.
Bank of America was already invested. They knew if they didn’t loan more
money, they were going to lose their initial investment because the studio was
going to go broke. They finally walked outside and walked the guy to his car. He
said, “That film is going to make you guys a hat full of money.” They leant the
money and gave the additional loans. Sure enough, it grossed $8.5 million.
One of the things they found out is that they could re-release their movies
every seven years. Snow White and the Seven Dwarfs, in its entire history of the
movie, it’s been re-released by Disney something like eight times. Of course,
DVD, blue rays and all of those things, it’s been released. It’s grossed something
like $450 million, but if you adjusted it for inflation, it’s one of the top ten grossing
movies of all time. It’s just stands the test of time that well.
Quality first. How could you do that? That’s a whole different discussion.
Let’s talk quickly about adversity and I’ll let you go.
His quote:
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“All the adversity I’ve had in my life, all my troubles, and obstacles
have strengthened me. I may not have realized it when it happened, but a
kick in the teeth maybe the best thing in the world for me.”
I’m telling you. He had 81 feature films, 48 Academy Awards, his name is
synonymous with quality, wholesome, family, excellence, but adversity was his
constant companion from the very first day. When he was a kid, his dad was
tyrannical, beat him up. It was just an unpleasant childhood. That’s where the
idea for Disney World came, a place to get a way and escape and to have a
family place.
When he was 22 years old, he had a company called Laugh-O-Gram.
They had gone and raised $15,000, a tremendous sum of money at the time.
This was 1922 or 1923. This is when they were shooting the Alice movies, where
Alice was live action in a cartoon world.
The company failed.
They filed
bankruptcy and instead of being depressed, he just got on a train and went to
California and started another company. It did not get him down at all.
Then he went and sold the Alice cartoon. He had one film version of the
Alice cartoon that he had produced. He never sold it. When he started the new
company, sold that cartoon and started getting some money. The stories of Walt
Disney getting screwed over by business partners in those early days are
legendary. Mistreated and done wrong, over and over again.
Finally, he created a character called Oswald, the Lucky Rabbit.
became very, very popular.
It
The distributor ended up, through a contractual
technicality, ended up taking it away from him, taking ownership of it. Actually
lured away his top animating staff. Felt like the asset was the rabbit and the asset
was the animators. It felt like he could break Walt Disney. Walt Disney said,
“You know what? It just doesn’t matter.” He was coming back from New York,
where he had just gone through this meeting, where he had just learned that he
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Innovation Hour
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lost his character and most of his staff to this guy- there were several guys that
screwed him over, but this particular one.
It was on this train ride after losing Oswald, the Lucky Rabbit, and the idea
for Mickey Mouse came up. He came up with the idea of Mickey Mouse. There
is a famous story about how the original name was “Mortimer Mouse.” His wife
thought it sounded too old fashioned, so they updated it to “Mickey.” The rest is
history, so to speak.
In the early 1930’s, he was so stressed out about money he had a nervous
breakdown. Multiple times over his career, he had to leave the studio for months
at a time, just to get away. He reconciled with his dad. When his dad got a little
bit older, he moved him out to California. They had a little bit of success with
Snow White. When he had made some money, he bought a house for his
parents.
Don’t take that story to mean that he became rich because he ended up
going into huge debt right after that because of Dumbo, Fantasia, and Pinocchio.
They bought a house for his parents. The house ended up having a problem with
the heating system. It had a carbon monoxide leak. It ended up killing his
mother. It injured his father. It was just terrible experiences, but he bounced
through it all. I mean, what else are you going to do?
There was a strike right before World War II that took out literally half of his
staff. A big, nasty, the story surrounds that is – it’s the story of betrayal. He was
betrayed by some of his most loyal employees. They tried to take down the
studio. The war hit in 1941. The day after the war hit because of the location of
the studio, the United States Army rolled in 500 troops, took over his studio,
literally, the physical facilities. They ended up doing work for the United States
Government. They created a film encouraging people to pay their taxes because
the Government needed more money. They did training films for the military.
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Walt Disney took a huge financial beating on that because of his naivety on the
contracts. Not good.
At the end of World War II, the company was in debt $4 million. He still
had the wherewithal to look forward to television, building Disneyland, and the
rest is history.
I think that’s where we are going to end up here. Again, I apologize that
it’s a little bit disjointed. It is a little bit of scattershot approach to this topic. I
would encourage you to read the book if you are interested. I’m telling you, it’s
fascinating. It would make a great movie. The problem is that the movie would
have to be 25 hours long for it to do any justice to it. Just read the book and
enjoy that.
Hopefully this has been an interesting little hour for you. I apologize for
some of the fits and starts with trying to find some of the information, but I’m
literally toggling two computer screens, about five different printouts, and some
different kinds of information. There’s just a lot there.
That’s it. We are going to be back with you in a little bit less than a half an
hour with our Insiders Open Forum. I’ll talk to you then, and we’ll go from there.
Thanks. Talk to you later. Bye.