When Disney was a startup

“Donald! It’s Donald!”

My daughter’s head is about to explode. Donald Duck is standing at the front of a line of 200 people waiting to take a picture with him. Of course, we get in line.

Visit one of the Disney theme parks and you’ll find it hard to see Disney as a startup.

150,000,000 people visit Disney parks every year. The company is valued at $160,000,000,000. In addition to Walt Disney Studios and theme parks, they own incredible assets such as ABC, Marvel Studios and Lucasfilm.

On a recent day we visited, Magic Kingdom had 80,000 visitors come through the gates. It was a sea of humanity.

Everywhere we turned, we saw iconic brands.

Peter Pan, Goofy, Snow White, Dumbo, Pinocchio.

Disney characters have been with most of us for our entire lives and now they are growing up with our children.

At the entrance to Magic Kingdom is a statue of Walt Disney with Mickey Mouse. It stands as a reminder that long before this corporation took over the world, it was just one relentless young man facing impossible odds.

Walt worked from the time he was 9 years old, starting with a paper route he started daily at 4:30AM. His dad kept most of his profits so he ran side hustles like delivering groceries, selling concessions at train stops and drawing caricatures in exchange for services like haircuts.

From his own profits, he paid for art classes at night.

He dropped out of school at 16 and headed to France to drive an ambulance at the end of World War I. In France, he continued to draw his cartoons and routinely submitted them to humor magazines. All were rejected.

Returning to Kansas City, he founded a company with a colleague shortly after, focusing on his artwork. It failed to produce any revenue.

He found a job as an animator producing short advertisements for local movie theaters and fell in love with the occupation. He soaked up books from the library to learn the trade and made enough improvements at his company to convince his boss to let him borrow a camera.

At night, he made short films in his father’s garage. This was a tedious process 100 years ago. Hundreds of hours went into one short film at a time where a large market didn’t exist for the content.

Walt created his second company, Laugh-O-Gram. He sold his short films to local movie theaters but couldn’t produce them at a cost lower than what they were willing to pay. Saddled with debt to start the company, he couldn’t cover his payments and filed for bankruptcy in 1921.

Imagine the pressure from his family and friends to “grow up”. In 1921, when many in Kansas City had stable industrial jobs, Walt was drawing cartoons and going broke in the process.

He didn’t quit. He took $40 and a suitcase to Hollywood. He applied for director roles and was laughed at, given his age and lack of experience.

Unable to find work in the industry, he convinced his brother Roy to invest with him in a new venture, Disney Brothers Studios. He invented the character of Mortimer Mouse and created two films.

Walt couldn't find a distributor for either film, losing money on both ventures.

Rather than quitting, he made another film named Steamboat Willie with his star mouse (now named Mickey). With practice, his content was getting better, and he landed his first distributor for the film.

Steamboat Willie and two subsequent cartoon series with Mickey Mouse earned Walt an Academy Award.

Not satisfied, he immediately started work on an ambitious full length feature movie project at a time where no one was doing this.

His peers in the film industry ridiculed him. The movie would be “Snow White and the Seven Dwarfs”, an adaptation of a Brothers Grimm fairy tale. Many in Hollywood nicknamed this project “Disney’s Folly”, convinced that the project would destroy his company.

Not content with an average film, Disney experimented with special effects and realistic animation techniques that were cutting edge at the time. Production took three years. Disney ran out of money several times and his family encouraged him to abandon the project.

Instead, he took out more debt to finish. If Snow White was not commercially successful, his company would go under.

Disney went all in on this dream, again.

Snow White was more than successful. It was the highest grossing movie in 1938, earning the equivalent of $133,000,000 in today’s money. From there, Disney Studios was on the map and the rest is history.

Most startups fail because the founder is not willing to risk failure. Many founders dip a toe in and hope for immediate success. They see other successful founders and underestimate how much they went through early in the process.

What if Walt was dismayed by the humor magazines telling him his work wasn’t fit for their pages? What if he didn’t want to taste rejection again and quit right there? How many writers submit work to a publication, receive a rejection letter and never try again?

What if Walt hadn’t spent his own money to invest in art classes? He was a poor kid when he invested that money to learn to draw. How many founders try to learn everything for free and won’t invest in training, mentors and networks that can help them level up?

What if Walt listened to critics? He certainly wouldn’t have opened multiple companies. He wouldn’t have pursued a “childish occupation” like animation in the 1920’s. How many founders today are more worried about the opinions of their friends and family? How many create great content but never share because of the toxic opinions of those who create nothing?

What if Walt quit every time he failed? Rejection sucks. We get personally attached to the content we create. We love our work and it is painful when others don’t love it as we do. Creating a short Mickey Mouse film with scant resources was an enormous undertaking. It must have been painful to market those early films and hear they weren’t good enough.

Starting a company is a mental grind. If it was just about hard work, everyone would try it. Anyone can work hard and millions do.

The challenge of a startup is psychological. Your biggest obstacle is often your own insecurities, self doubt and fear of failure. Great businesses are built by founders who battle those demons and persist.

Walt overcame his failures and became one of the world’s most successful founders. My kids have a picture with Donald Duck to prove it.