Founders - #347 How Walt Disney Built His Greatest Creation: Disneyland

Starting point is 00:00:00 There's two things that Charlie Munger said one time that I think almost all of history's greatest entrepreneurs understood intuitively. And that's learning from history as a form of leverage. And the second thing he said was that there's ideas worth billions in a $30 history book. If you've been listening to these episodes I've been making about the filmmakers recently, like Steven Spielberg, Quentin Tarantino, this idea comes up over and over again. Both Tarantino and Spielberg actually studied Walt Disney and learned from him as well. But they would watch and rewatch old movies that they loved. And then decades later, entire scenes from those movies would actually appear in Steven Spielberg's movies. They'd appear in Quentin Tarantino's movies.

Starting point is 00:00:35 It's the exact same idea behind young Steve Jobs studying Edwin Land. And then you see Edwin Land's ideas show up in Steve Jobs' companies and products. Jeff Bezos was famous for passing out Sam Walton's autobiography to the early employees and the top executives at Amazon. You see that Sam Walton's ideas would show up in Jeff Bezos' companies and products. And that is a main theme that reappears over and over again for anybody that gets to the top of the profession, whether it's in business and art and sports and music, you see it over and over again. Anybody who becomes great at what they do, they are seeped in the history of their industry. They talk about it over and over again. They don't just read a book one time. They don't just watch a movie one time. They don't just have one conversation. They do it over and over and

Starting point is 00:01:17 over again. That is why if you have not done so already, I'm going to highly recommend that you subscribe to Founders Notes. For six years, I've been cataloging all of my notes and all of my highlights for every single book that I've done for the podcast. And now by signing up for a subscription to Founders Notes, you get access to all my notes and all my highlights. You also get access to every single one of my transcripts for all my episodes. You can search. This is the magical part of it. You can search by keyword, by person, by subject. It is this giant searchable database on the collective knowledge of history's greatest entrepreneurs. You can also read all of my highlights and notes by book. You can have all my notes and highlights presented to you

Starting point is 00:01:54 in a random order on the highlights feed. I've been searching by keyword. I've been rereading my highlights by book, and I've been rereading my highlights in random order on the highlights feed for years. I literally could not make the podcast without this tool. And now I've added a new feature that I cannot stop talking about and I cannot stop using. It's actually called Sage. It is the Founders Notes AI Assistant. And the name of that new feature

Starting point is 00:02:17 actually came from a Founders Notes subscriber because he had early access to this feature. And I was talking about all these names or trying to figure out what to call this feature. And he's like, well, all the names that you have picked out, they don't actually describe what the feature does. Why don't you call it Sage? And then he sent me the definition of Sage. And Sage is a profoundly wise person that is looked to for guidance and advice. And that is what Sage does. It's like search on steroids. You can ask it a question and it'll

Starting point is 00:02:42 search every single note, every single highlight, and every single transcript, meaning every single word I've uttered on the podcast. And it'll start making connections and giving you ideas. I talked about this a few weeks ago that I republished the Steven Spielberg episode. I hadn't listened to that episode in over two years. And yet just by asking Sage, what are the most important ideas to learn from Steven Spielberg? It gives me this summary, this outline of the top nine ideas, the top, the nine best ideas that Steven Spielberg had. And one of the most important ideas that I came across, this also came from Charlie Munger, is that learning is not just memorizing information, learning is changing your behavior.

Starting point is 00:03:15 And it's amazing how hard it is to memorize information. I read the biography of Spielberg. I reread the notes and highlights four or five times for every episode, for every book that I do before I make an episode. I then record the episode. I edit the episode. I publish the episode. And yet, because I hadn't revisited it in a few years, you'd just amaze how much I forgot. And this is where a subscription to Founders Notes solves that problem.

Starting point is 00:03:35 I do believe that the subscription to Founders Notes is the perfect companion. If you're going to invest tens of hours, dozens of hours, hundreds of hours of listening to Founders Podcasts. Founders Notes becomes this tool that helps you condense and clarify the collective knowledge of history-scarce entrepreneurs and pull it up on demand when you need it. It is a tool that I use every day so I can easily recommend. I highly recommend you get a subscription by going to foundersnotes.com. That is founders with an S, just like the podcast, foundersnotes.com. I appreciate the support and I hope you enjoy this episode on Walt Disney's greatest creation, Disneyland. One day in the early 1950s, Walt Disney stood looking out over 240 acres of farmland

Starting point is 00:04:15 in Anaheim, California, and imagined building a park where people could live among Mickey Mouse and Snow White in a world still powered by steam and fire for a day or a week, or if the visitor was slightly mad, forever. Despite his fame and success, exactly no one wanted Disney to build such a park. Not his brother Roy, who ran the company's finances, not the bankers, and not his wife. Amusement parks at the time were a generally despised business. Disney was told that he would only be heading towards financial ruin. But he persevered, initially financing the park against his own life insurance policy. He assembled a talented team of engineers, architects, artists,

Starting point is 00:04:57 animators, landscapers, and even a retired admiral to transform his ideas into a wonderland. The catch was that they only had a year and a day in which to build it. On July 17, 1955, Disneyland opened its gates, and the first day was a disaster. But the curious masses kept coming. 800 million visitors have flocked to the iconic park since then. In this book, popular historian Richard Snow brilliantly presents the entire spectacular story, a wild ride from vision to realization that reflects the uniqueness of the man determined to build the happiest place on earth, with a watchmaker's precision, an artist's conviction, and the desperate, high-hearted recklessness of a riverboat gambler. That was from the back cover of the book that I reread and the one I'm going to talk to you about today, which is Disney's Land, Walt Disney and the Invention of the Amusement

Starting point is 00:05:55 Park that Changed the World, and it was written by Richard Snow. So originally, in case you missed last week, I just spent an insane amount of time reading this 800-page biography of Walt Disney. And on that last episode, I mentioned that one of my favorite books that I've ever read, and I've done a bunch of podcasts and read a bunch of biographies on Disney, is this book. Because it's just dedicated to what Disney said at the end of his life, that he was most proud of two things. Keeping control of his company, because he famously lost control of his first company. So keeping control of his company and then Disneyland. And the reason I love this book and why I recommend reading it is because, I don't know, 80, 90% of it is just this relentless resourcefulness that he had to have.

Starting point is 00:06:38 He was not a wealthy man when he built Disneyland. Far from it. Broke. And so I just think there's a ton of lessons in here. This resourcefulness can be applied to whatever you and I are working on. And so originally on the episode I did last week, my plan was like, hey, since I already did an episode on this book four years ago, I'll republish it. And so if you listen to both of them, you can figure out that the first episode is how well Disney built himself. And then this one is obviously

Starting point is 00:07:01 how he built his greatest creation. But then as I pick this up to skim through and to start reading it again, I was like, oh, no, I'm going to reread it in is exactly what the back cover did such a great job of. It's like, even though he's one of the greatest and most celebrated living entrepreneurs at the time, he has this idea for Disney. And even though it was obvious if you studied his career up until this point that he didn't rest on his laurels, he didn't just want to repeat past successes. As he said, I love this idea that he kept in his hat, that you can't top pigs with pigs. He kept that maxim in his hat to remind himself as a way, I always have to try to top what I did previously. I should be blazing new trails. Even though that was, you know, in retrospect, if you're analyzing Walt Disney's career, you know, he's a 53-year-old man when he's building Disneyland. It should have

Starting point is 00:07:57 been obvious that's his approach to his life and work. The external world, other people, even people close to him, still doubted him. I think that is a fundamental lesson of human nature that you and I should internalize. So I think I need to start at the very, very beginning because there's this great quote about the outside perception, what they thought it was going to be and what it turned out to be. When he reached middle age, it seemed that we were going to witness an all too familiar process, the conversion of the tired

Starting point is 00:08:25 artist into the tired businessman. When in 1955, we heard that Disney had opened an amusement park under his own name, it appeared certain that we could not look forward to anything new from Mr. Disney. We were quite wrong. He had instead created his masterpiece. And so I just want to pull a few things out of the first chapter because I think the first chapter gives us a great overview and really sets the story. And then I'm going to go into like the prehistory of Disney, where he got the ideas. In many cases, Disney reminded me, I think it was Kobe Bryant, if I'm not mistaken, that said you should treat the world, the entire world as a classroom. You can take lessons from everything. And you'll see this in this evolution, this multi-year, maybe half decade, maybe decade long evolution of the idea of Disneyland before he actually makes it. And so the opening chapter is opening day at 4 a.m. when his day starts a few hours before everybody else.

Starting point is 00:09:18 It's the biggest day in his life outside of the birth of his daughters, I would say, maybe the day he married his wife. But what was fascinating, and I think I need to point this out, it's like, keep in mind, like everything I'm about to describe to you, Disney is 30 years into his career. He is already Walt Disney. And yet you've the pressure and the nervousness I don't think ever ends. He was nervous now and his anxiety sometimes cracked into anger. There were so many things that could have been done better. He was 53 years old, slightly overweight, an incessant smoker, but during the past few months, he had amazed his colleagues by how quickly he could move about his future park. I need to stop there too.

Starting point is 00:09:55 This ability to move quickly, like physically move quickly, not only push the pace inside your company, right? But the ability to move quickly and have a lot of energy is actually a very common description in these biographies of history's greatest entrepreneurs. And so not only is he about to open for the first time ever an amusement park that's unlike anything else that was on the planet at the time, but he's also doing this like live show. This show that he does in partnership with ABC, the opening of Disneyland is watched by I think 54% of the entire American population at the time. So it says not only was Disney inaugurating an amusement park, he also had to be the host of the largest live TV show ever mounted. And it's going to go to this a minute, but it's amazing that before ABC, so ABC was Disney's main sponsor. He says, oh, you want a TV show?

Starting point is 00:10:39 That's good. You have to. I'll make you a deal. I'll give you television programming if you help pay for my park. He had offered that deal because at this time in history, CBS and NBC were well, a lot, they were a lot larger. ABC was like a distant third. And so CBS and NBC had turned down this deal.

Starting point is 00:10:54 But pointing this out is so important because it couldn't be more contrarian. What Walt Disney was doing could not have been more contrarian. So CBS and NBC wanted a Disney television show too, but not enough to get involved in the amusement park industry, which in 1955 had become widely perceived as both dangerous and disreputable. And so this question that everybody's asking him, his brother's asking him,

Starting point is 00:11:16 it says right here, his wife's like, why are you building an amusement park? Everybody inside and outside his company is going to ask him this question. There's actually a phenomenal, he has got a phenomenal response. And then the lesson behind, if you read between the lines of what he's saying, is a phenomenal lesson to keep in mind and to learn too. I'll get there later on. But right before the park opens, a journalist is asking him like, why are you doing this?

Starting point is 00:11:37 And the way I would describe Walt Disney's view on Disneyland and what he was doing, I heard of this interview from Elon Musk a few years ago that was fascinating. You know, they were trying to, same thing, journalists was interviewing him, trying to get behind like, why are you doing Tesla? Why are you doing SpaceX? Why are you doing all this stuff? And he says, this is what Elon said,

Starting point is 00:11:51 that I think could be applied to Disney's mindset as well. Elon Musk said, I think life must be more than just solving problems. You wanna do projects that are inspiring, projects that make people excited. And that's what Disneyland has done for 800 million people. But before the 800 million people visited this idea that came from Walt Disney's mind, it excited him first.

Starting point is 00:12:13 And that is so important. And you see this level of commitment. He had hawked his life insurance, sold his summer home, and borrowed every dollar he could to build Disneyland. Not surprisingly, this had been a tough concept to sell. The park had struck most other people as a foolish extravagance and an expensive one with initial projected cost of a million and a half dollars. So Walt Disney, I don't even know if he could do math because every

Starting point is 00:12:37 single time he's like, oh, I think this movie will be, you know, $50,000 or this thing will be a million dollars. No, no. He thought he could build Disneyland for a million and a half dollars. The final cost was $17 million. That's about $160 million in today's dollars. So at the end of this, it says he was broke, but he had built Disneyland. And the good news is, and he certainly doesn't know this on opening day, but he's not going to stay broke for very long. Not only did he create a phenomenal product, one that is constantly, he says,

Starting point is 00:13:06 he has a line where he says, improvement is my mantra. One that he's constantly like, it's a living, breathing thing. He's constantly improving. But I was sitting here thinking about this idea where he's like, okay, I can't figure out how to make, no one wants to give me the money to build Disneyland.

Starting point is 00:13:21 And he had this brilliant idea. He was like, okay, television networks want me to create, you know, Disneyland programming and the brilliant idea to tie in. I will give you what I what you want if you give me what I want, which is obviously funding for my amusement park. But so that's the financing of the park, which is brilliant. But this may be the greatest product launch of all time, because before opening day, right, he had run eight months of his television program. He produced a bunch of other programming for ABC as well. But one of them, let me just read this to you and then I'll explain why I think this may be the greatest product launch of all time. So he had run eight months of his television program. He

Starting point is 00:13:59 had named his new show Walt Disney Presents or The Wonderful World of Walt Disney, which you could have, it was simply called Disneyland. And every weekly episode was an advertisement for the still unborn park. I went on YouTube. You can go on. In fact, it was funny. There's entire chapters on this book, which is essentially just a summary of what these shows were about. And so I was like, well, I can read about them, but I also want to watch them. So I went and actually watched. I watched the opening day one. I watched the ones that he was doing, a bunch of the ones that he was doing, essentially just like watering the ground. Right. And the reason I say it's maybe the greatest product launch of all time, because it's eight months of one of the highest rated television shows that functions when you watch them as a giant ad for Disney. But it is just like David Ogilvie told us.

Starting point is 00:14:46 It's like you can't save souls in an empty church. Your advertising, your marketing has to first entertain. It has to hold people's attention. And so, of course, Disney's not up there like saying, hey, come to my park. You know, it's open on this day. This is what it costs. He's talking about why he's building it,

Starting point is 00:15:01 what it's going to have, what it means, what you can expect to experience. And the result was that on opening day, the opening of Disneyland creates the largest traffic jam in Orange County, California history. And from that opening day and almost every day since in the last 70 years, people have constantly flocked to this creation. And it was his creation. This is one of the most inspiring things about obviously reading biographies, studying Walt Disney, studying Disneyland. In particular, there's a great line in the book where it says Disneyland is the extension of the powerful personality of one man. One thing that's obvious when you read this book and when you go into detail about how Disneyland was actually created, it's like, oh, the creation of Disneyland, it's very Steve Jobs-esque, very Edwin Land-esque. That's why I kept bringing them up on the past episode of Walt Disney. It's like, oh, the creation of Disneyland was just Walt Disney's personal taste and physical form. And to me, it demonstrates how important it is for even a supremely talented people. You know, it doesn't matter what list you have of history's greatest entrepreneurs.

Starting point is 00:15:55 Walt Disney has to be on that list. And yet even a supremely talented person like that, if they're not excited, if they're not focused, if they're not alive with what they're working on, that talent could go to waste. And so I want to go into the prehistory of Disneyland. And his daughter writes this biography. I actually wrote, I actually ordered a bunch, two or three other books now, maybe four books that I found in the bibliography of this book and last week's book. But his daughter is describing what's taking place in her dad's life right before he goes into this. Because the idea for Disneyland may come to life for other people to experience in, you know, 1955. But you can trace it back to 1945, 1948, 1949.

Starting point is 00:16:33 He is flat out depressed. And so his daughter wrote at that time, I think it was just after the war when nothing seemed to stimulate him. I could just sort of sense it. I could tell he wasn't pleased with anything that he was doing. And at this time, he's completely disengaged from the business that made him well-known, the one that he innovated in over and over again, this Disney Studios.

Starting point is 00:16:53 And he's spending all of his time doing something that seems silly, which is building toy trains. And this is just a hell of a sentence. One small enterprise did please him, and it had little to do with the art that he had done so much to invent and of which he was the undisputed master. So there is a film critic, a New York Times film critic, that comes and visits Walt Disney in the early 1950s. And he comes away from this meeting depressed because he loved Disney films. And so the description of this visit is as follows. He was dismayed to find that the man whose work he had long admired seemed totally uninterested in movies and seemed wholly, almost weirdly concerned with the building of a miniature railroad engine

Starting point is 00:17:37 and a string of cars. All of Disney's zest for innovation, for creative fantasies, seemed to be going into this play thing. And so at this point, this idea for a physical project, and he goes through a lot of different versions of this, is just in his mind. He's going to go and travel to this railroad fair. And it's after this experience is the first time he puts his ideas actually on paper. And he writes this memo called the Mickey Mouse Park, which I'll get there. So you can really think of this railroad fair that

Starting point is 00:18:03 he attends as an early blueprint for Disneyland. And so surrounding the railroad fair are all these external exhibits. I got to read this to you because it sounds a lot like Disneyland and they have a great punchline here. So it says, one can see some of the spores that would blow into Disneyland in the guidebook's description. Each exhibit will prove an exciting and entirely different chapter in a stirring melodrama. Remember, this is the guidebook. And the railroad takes you through all these different worlds, or what Disney would later call scenes, because he thought of, really thought of Disneyland as like an external, like a three-dimensional movie set. And so at this park that Disney's at, it takes you in through a primitive Indian country. It takes you to the playgrounds of Florida.

Starting point is 00:18:44 It takes you to the romantic old French quarter of the New Orleans. And this is the most important part of this entire section. The exhibits added up to a coherent whole. The growth of America told in three dimensions. It was a history lesson that you could walk through. Although the term still lay in the future, Walt Disney was visiting a theme park.

Starting point is 00:19:03 And one of Walt Disney's heroes was Henry Ford so on the way back from this railroad fair he also visits you could still go to this thing today and in fact I watched a bunch of videos on this on YouTube so Henry Ford at this point is the richest American and he was building this thing called Greenville Greenfield Village and the way Henry Ford built his park is he didn't build things from scratch. He literally bought these old structures. So he went and bought Thomas Edison's Menlo Park Laboratory. And what I mean by that is literally told them to disassemble it, put it on trucks, bring it to Michigan, and reassemble it. Ford had this incredible collection. He had the cabin where George Washington Carver was born. He had Harvey Firestone's childhood farm.

Starting point is 00:19:44 Henry Ford was a big Abraham Lincoln fan. He bought and moved the courthouse where when Abraham Lincoln was young, he practiced law. Henry Ford bought the Wright Brothers house and the bicycle shop where they conducted their first experiments. Ford's town, this is so important

Starting point is 00:19:59 to understand Disney's approach to his entire life, really, but also in particular to Disneyland. Ford's town was an entirely personal reflection of the man. So would Disney's be the roadmap of Walt Disney's life. And so it is when he gets back from this trip that he does that first project memo that he calls at the time Mickey Mouse Park. And it's fascinating because he just lays out a bunch of things that he holds true, like they're only going to use the best materials, they're going to focus on detail. And there's just a surprising number of the ideas in this memo, because this is, you know,

Starting point is 00:20:28 a decade and a half or half a decade before Disneyland is actually real. And what is fascinating is his first idea is not, OK, let me go out by land. I'm going to build my own park. His first idea is I want to build a scaled down train and a railway system that I can actually use. So he actually, you can, it's big enough that people can get on it. And I don't want to just be directing the design from on high. He, this is the crazy thing. Disney actually pays one of his employees to, to teach him. He, he, he learns and trains to be

Starting point is 00:20:56 Walt Disney in his fifties, right? Is learning and training to be a machinist. And so now he shows up at the shop. It says they cleared off a workbench and the next day began conducting a master class in machining for a single pupil. And so the train they're building is called number 173. There is a great line in the biography that I read last week on Walt Disney where it's like his main traits were the combination of raw ingenuity and a sadistic determination. When I read this paragraph, the term sadistic determination, sadistic determination and sadistic dedication, this is what this looks like. So it says, number 173 was not destined to be a mere ornament. It was to power a railway system, and Disney needed a place to run it. He drove his wife out to see a five-acre undeveloped hilltop. It seemed time for a new larger house, he told them. But what chiefly

Starting point is 00:21:53 drew him to it was the varied terrain. The terrain and very fine views that would be finer still when seen from a moving train. He is explicit about why he's buying this property, right? His wife and daughter say, oh, it's time for a new family house. He says, I want the line to run completely around the house. That's why I bought five acres of land. So I have plenty of room to run. And so now they are designing where the track is actually going to run. This is really important because Disney had this crazy drive. He had to be the best. Remember, he says he wants to conquer worlds.

Starting point is 00:22:29 He wanted absolute domination. He wanted to pick a field in which he could not be one of the best. He wanted to be the very best. And to him, the definition of being the best is like there is no additional room for improvement. And so he is always going to optimize. He said the only moat that he believed in was the superior quality of his product, right? He's like, I'm optimizing for quality and excellence above every other consideration. I am not optimizing for cost.

Starting point is 00:22:54 And you see this over and over again when he gets super mad. Like we'll start yelling at people when employees are like, well, I found a, you know, we can do it the way you do it, which is better. Or we can do it this way that's like slightly less better, but a lot cheaper. And so they're building this tunnel. He actually builds a tunnel where you're like you you're on. And usually he's the one driving the train, by the way, you're on the train. You know, a bunch of other people. He'd have a bunch of parties at his house and they would just go riding the train for hours.

Starting point is 00:23:17 And he's on the front one and he would go through a tunnel. And so they're like, hey, you know, these curves are really expensive. Tunnels are really expensive. It's much more prudent, Walt, that let's just make the tunnel straight because, you know, that's a lot cheaper. And Disney's response is, hell, it's cheaper to not do it at all. I don't want you to tell me any of the cost for the tunnel. And you might be like, David, why are you spending so much time talking about this train? Because this is not about a train.

Starting point is 00:23:44 That's not what he's doing. I love this evolution of an idea. I mean, how valuable is Disneyland and theme parks to the Disney empire today? You know, but you're talking, this is, this is the germination of a multi, multi-billion dollar idea. And it started out with just a train. And what's fascinating is like there winds up being this accident. It falls over, somebody gets burned, but that's not why he stopped doing it. There's a great line. I just need to read this to you. And they're like, you know, this guy spent years doing these experiments, $50,000 in 1950 dollars, building this train, buying his house, like doing all this crazy stuff. And they said, how strange that the boss would just drop it.

Starting point is 00:24:22 Walt doesn't give up. So he must have something else in mind. And so the note I left myself here, and I'm looking at Founder's Notes. If you have a subscription to Founder's Notes already, after listening to this episode, I would go and actually read my highlights from this book because there's all this commentary that I put on top of the highlights.

Starting point is 00:24:40 It's a great way to reinforce what's actually taking place here. But really, like, think about that. Walt doesn't give up. I'm reading from my notes now. Walt Disney give up, so he must have something else in mind. And I said, I can't think of a better trait to have than sadistic determination. He's not going to give up and he doesn't let any experience go to waste. So what did he learn from doing this? Well, Walt Disney had learned a great deal from building his train. He learned about creating a full operating system so carefully landscaped that it gave his guests an experience, a narrative of shifting scenes, a narrative that's so important,

Starting point is 00:25:10 a narrative of shifting scenes, one blending smoothly into the next. Here was a whole little world with him in absolute control and one in which visitors weren't sitting back and watching a screen, but rather were full participants. He used this railroad as an example of what he wanted to do next. There is a definitive line between Walt's train at his home and what he went on to do with Disneyland. And so there's a couple of fascinating things here. The fact is that there was small theme parks,

Starting point is 00:25:37 small amusement parks, you know, 60 years before Disneyland. And we're going to get into the actual incentives, the economic incentives, why they were, you know, rather crappy. It It said something like economics worked against such extravagance. But I do want to bring out the main point of what I'm trying to get to. It's fascinating. It's like, okay, the germination is like very basic version of what Walt's going to do. That idea has been around for a long time, but they're all suck. He's touring all these places and he just cannot

Starting point is 00:26:04 get over how bad they are. And the main theme, the idea behind what he's discovering is like, oh, their mediocrity is my opportunity. It is an opportunity specifically because there is so much room for improvement. And so he's touring all these amusement parks and there's just a hilarious one because he goes to Coney Island and he goes with his wife and he tells her, I'm almost ready to give up the idea of an amusement park after seeing Coney Island. The whole place is so rundown and ugly. This is Walt Disney speaking. Direct quote from him.

Starting point is 00:26:33 The people who run it are so unpleasant. The whole thing is almost enough to destroy your faith in human nature. So in the early 1900s, there was little miniature versions of Disneyland just done on a much smaller and like worse scale. And they hold a lot of the same traits that Disney's going to use. They all had single entrances. They charge admission fees just to get on the grounds. And they offered increasingly elaborate attractions in a carefully monitored environment. And this blew my mind. This is an absolute wild reason that there were so many small amusement parks. So there's over 20,000, they call them lesser imitators of what Disneyland is going to be. There's over 20,000 of these in

Starting point is 00:27:10 America alone. In fact, there was one just 15 blocks away from Walt Disney's childhood home. It's called Electric Park. And the reason, this is a wild reason that so many small amusement parks were built in the early 1900s. Remember, this is going to blow your mind. This is pre-invention of the electric meter. Okay. So electric companies, this is before they switched to usage-based pricing. You're like, what the hell are you talking about, David? What does that have to do with the thing? Why was it called electric park? It was called electric park because it was a child of the trolley car, which was electric, right? The new traction companies all face the same problem. Ridership dropped away to next to nothing on the weekends because people were just riding

Starting point is 00:27:46 electric trolleys to commute to work, right? So during the weekends, no one's working. Their ridership drops. That's a big problem because they have to pay power companies for electricity every day, no matter how few fares they collected to offset its cost. The invention of the electric meter of usage-based pricing is in the future. So if you're them, you have a business, right? You have seven days of expenses and only five days of usage and five days of revenue. Seven days of cost, five days of revenue. That's a problem.

Starting point is 00:28:13 And so these amusement parks were originally built by trolley companies to give people a reason to travel on Saturday and Sunday. They built amusement parks and they weren't called amusement parks back then. They were called trolley parks, but they were what we would consider them amusement parks. And so this following quote by Walt Disney is really when I realized, oh, the opportunity is there because there's so much room for improvement. I mean, this goes back to what we learned about Steve Jobs.

Starting point is 00:28:39 One of my favorite things, it took me like, I was in book like number 10 before somebody smacked me in the face with this, was that one of Steve Jobs' greatest talent was identifying markets full of second rate products that's exactly what Walt Disney's doing he identified a market full of second rate products there's nobody in the world that could build an amusement park like Walt Disney could based on his experience the characters that he's created the stories that he's created and so he identified their mediocrity is my opportunity why would you want to get involved in an amusement park?

Starting point is 00:29:05 They're so dirty and not fun. Why would you want to get involved in a business like that? They asked him. And he fielded the question the way he would countless times during Disneyland's germination. That's exactly the point. Mine isn't going to be that way, he said. Mine's going to be a place that's clean

Starting point is 00:29:19 where the whole family can do things together. And so in 1952, his original idea is like, I'm going to build Disneyland. I'm going to build it by the studio. It's going to be in Burbank. The interesting thing is the city would not let him build it. But this is how he described, this is how Walt Disney described Disneyland

Starting point is 00:29:34 a few years before it was built. He said, Disneyland will be something of a fair, an exhibition, a playground, a community center, a museum of living facts, and a showplace of beauty and magic. And it is in the early planning stages that he runs into a problem that he's going to experience the whole time. No one has experience for something that's never been done before. And it is during this futile search for an architect, because he can't find somebody that's ever built it, because nothing like this

Starting point is 00:29:56 has ever been built before, that he actually stumbles upon one of the greatest ideas. That it is less architecture and more storytelling and filmmaking. Disney had come to believe that what he needed couldn't be supplied by architects. A friend of his told him, no one can design Disneyland for you. You have to do it yourself. What Walt Disney was seeking had more to do with movies than with architecture. Disney's buildings would not be the work of architects. They would be the work of set designers. His studio people would have to do it.

Starting point is 00:30:22 And so one of the first problems that Walt Disney needs to solve, he got to figure out where, now that Burbank won't let him put the park over there, where's Disney going to be? So he hires the Stanford Research Institute, and they're going to help him find and then plan and then build the park as well. Now, this is hilarious. The two dudes from the Stanford Research Institute, the ones that are going to help him build the park, they're named Woody and Buzz. Hilarious that 45 years later, the first movie that Disney and Pixar make together, Toy Story, the main characters are Woody and Buzz. And me and my four-year-old son, my daughter does too, but we've watched, I've lost track. Toy Story is one of my favorite kids' movies ever, but I've watched all four of them and I can't, I've lost track how

Starting point is 00:31:00 much. This jumped out to me because I've had Toy've had toy story on the brain the last decade so anyways now that he's going through what's fascinating to me is Disney is a superb storyteller master storyteller everybody that runs into him from the time he's like an 18 year old kid until he's in his 60s says the same thing about him and so he has to tell the story to Woody and Buzz and he's describing what he wants to build and what what's shocking, it's very similar. He uses this, he does this on the television show as well. Right now, he's telling the story to recruit and empower the people that are going to help build the park, right? But then he tells the story to get people excited to actually come, for not just employees and builders and planners, but actually customers and guests, as he calls them. And so this is the description where it's just very odd because it's unlike any other amusement park in existence at this point. It sounded strange, unlike anything you would expect in an amusement

Starting point is 00:31:53 park. At a time when most parks were planned as a grid with four side access entrances. So he would go and part of his planning would he go and talk to other amusement park owners. And they're like, your single entrance idea is the stupidest thing ever. People don't like to walk. You need to have multiple entrances close to parking lots. And so, again, going back to that note I referenced earlier, the creation of Disneyland was Walt Disney's personal taste in physical form. That's the way I think about it. So it says most of them had these, you know, four side access. Disney outlined a design concept of a single park, a single entrance

Starting point is 00:32:31 into the park. Rather, once the guests entered, they'd pass through a turn of the century main street, which would end in a circular plaza or town square. The area would then feed off into four thematic activity areas, the world of Tomorrow, Fantasyland, Frontierland, and Adventureland. More things he did different than his competitors. Most amusement parks wanted all the street visibility they could get. Walt's entire park would be hidden from the outside world by landscaping. Walt was talking about customized rides, exhibits, and attractions instead of the standard off-the-shelf Ferris wheel and tunnel of love.

Starting point is 00:33:04 Rides would be subordinate to story. But most alarming of all, this entertainment anonymally had to be open in just two years. And so a problem they ran into right away is like, they looked at a few other locations. As soon as word got out that Disney might be buying, building his amusement park there, all these other realtors and real estate investors would go out and buy up the property. So he's like, okay, how do we solve this problem? They actually do it really smart. They use a bit of misdirection here.

Starting point is 00:33:30 And so not only does he use people secretly working for him to slowly buy up all the property, but then they actually launch a very effective disinformation campaign. They leaked to the local papers that Disney is planning an amusement park in the San Fernando Valley, 50 miles away. And that misdirection causes people to go try to figure out where he's building in the San Fernando Valley, even though he's not, and buy a property around it.

Starting point is 00:33:54 And so once Disney has his land, he actually drives. Remember, these are just orange groves, right? And he drives his friend out there to tell him the story of like what he's going to build. This guy named Art Linkletter, who's one of the most famous TV hosts in the country. And I just think his response is hilarious. And so it says, Disney pulled the car over. We got out and Walt began vividly describing Disneyland, the acres of colorful buildings and places and all the names of the places like Tomorrowland, Fantasyland and all that. The thousands of people and what they would be doing. And while he talked, he became more and more enthusiastic by the minute. I began to grow more and more concerned. I hardly knew how to tell him

Starting point is 00:34:28 that for once he was making what would probably be the biggest and most ruinous mistake of his life. What could I say? I knew he was wrong. And so up until this point, he's been financing everything himself. This is where he winds up selling his vacation home in Palm Springs. He borrows against his life insurance. His wife is like in tears. She's very worried. Like what if he dies? What's going to happen to her? And so Walt knows that he has to get his brother and his partner, Roy, his brother, Roy Disney involved. And up until this point, you know, it's just been Walt's little side project. You know, he's clearly been depressed with the studio. So he's just working on this to to be a distraction. And then Roy realizes, oh, this isn't going away. I have to get involved. I have to save my little brother. And they have this, you know, this interesting relationship,

Starting point is 00:35:14 these ups and downs like any brothers can have, especially brothers that work together so closely. There was a time where they were fighting over business. They didn't speak to each other for two years, which is wild. And so Roy, Walt's always saying, you know, Roy's trying to hold me back. And really Roy's saving his ass financially because by Walt Disney's own admission, like he was terrible with money, terrible with, he just never paid attention to that at all. And I'm going to get into what the role that Roy was playing and why, you know, there would be no Walt Disney if it wasn't for Roy Disney as well. But I just thought it was funny where, you know, Walt's talking about this adversarial relationship that his older brother always has with him. He's holding him back. And it says, Roy saw their relationship differently.

Starting point is 00:35:54 When Walt and I were little, we lived on a farm and we had to sleep in the same bed. Now, Walt was just a little guy and he was always wetting the bed and he's been peeing on me ever since and so it's just like poor again i i love the role that roy plays but i just couldn't imagine in fact there's this great sentence where you know i gotta be clear here walt's older brother roy was the perfect partner for walt to have you know they had everything you wanted. They had different complementary talents. And Roy was fine in being in Walt's shadow. There was 100 times the amount of people that knew Walt Disney than knew Roy Disney. And there's this great description of their relationship in the book. And it's talking about Roy's perception of this unique understanding that, no, my brother is supremely

Starting point is 00:36:45 talented. He's a one in a 10 million kind of talent. Roy never lost his calm understanding that the company's prosperity rested not on the rock of conventional business practices, but on the churning, extravagant, perfectionist imagination of his younger brother. That is an incredible paragraph, but it's also, it's not meant to diminish. Roy was a talent of his own, was a genius of his own. This is how somebody worked it with both of them for a long time. It says, Walt was the front man and Roy was in the background. In a way, Roy was as much of a genius as Walt was. They shove their chips in the pot. They go all in multiple times. They went in all in on Snow White. They're going all in on

Starting point is 00:37:24 Disneyland. Roy always saved the day. If it hadn't been for my big brother, Walt said, I'd swear I'd be in jail several times for checks bouncing. I never knew how much money we had in the bank. And so Roy is now going to be the one that goes and pitches these TV studios because he's got this idea. Walt has this idea of how he's going to finance the park because the banks are not going to give you money. It's just not going to happen. Disney Studios is not doing well financially. And what was fascinating is Roy understood that once Walt was focused on something, there's

Starting point is 00:37:54 just nothing you can do. He said that a determined junior, because he would call Walt Jr., he says a determined junior was impossible to dissuade. And so his whole point is like, well, if it's futile to try to stop my brother, I need to then help my brother. And so we are now in September of 1953. Now, keep in mind, Disney opens in July 1955. They have no money. They have no financing so far, right? They just have a couple hundred acres of orange groves at this point. It is remarkable how fast they did this. So really, I want to talk to you about how Walt Disney makes his pitch deck. And this pitch deck is going to be

Starting point is 00:38:28 unbelievably successful. This pitch deck doesn't work on CBS or NBC, but it works on ABC. Remember what Walt Disney said last week? He said that ABC needed my television show so damn bad, they bought an amusement park. That made me laugh. I laughed out loud when I read that. So I'm going to give you a summary of how he builds his pitch deck. Okay. And it's remarkable how fast he moves as well. So he calls up a former employee on a Saturday morning. He says, Hey, come down to the studio. I want to tell you about something. He tells him about Disneyland. This guy's name is Herb Ryman. Herb Ryman is like, that sounds fantastic. And Disney's like, great. He asked Herb to draw a rendering by Monday. Roy is leaving for New York on Monday. It is Saturday morning on Monday. So he can take this drawing that has not

Starting point is 00:39:13 been complete yet. So he can pitch the TV networks. We talked about last week and we talked about a bunch of times. In many cases, a lot of the great leaders and entrepreneurs in history, they resemble cult leaders and so much so that there's like a hundred page chapter in that 800 page biography called The Cult. And we see how spookily charismatic that Walt Disney was because this guy's like, hell no, there's no way I'm doing it. Disney offers, he says, hey, I will stay with you the entire time. And so they're eating like, sounded gross to me. They're eating tuna sandwiches and milkshakes the whole weekend, right? But they work 40 hours straight. And the end result is this beautiful aerial drawing of what was in Walt Disney's mind. Now, listen to this. I'm going to read this paragraph to you. This blew my mind. patient skill was remarkably close to what two years and many millions of dollars later would rise from the vanished orange groves of Anaheim, California to tease the imagination of the entire

Starting point is 00:40:12 world. So this is 1953, okay? And television is literally going to save Disney. Now, what is remarkable is one of other Disney's heroes, in addition to Henry Ford, was this guy named Charlie Chaplin. Charlie Chaplin founded this company called United Artists, right? And Disney was like, oh, my God, I can't believe I got signed to my hero's company. They were being his distributor at the time. This is back in 1936. They wound up having falling out, him and United Artists, because the United Artists was pushing them. They're like, hey, we want future rights to broadcast your Disney movies on TV. Disney broke with that. He's like, absolutely not. And the crazy thing,

Starting point is 00:40:49 I said last week, it's fourth out. There was 4,000 TVs in the entire world when he made this decision. No, no, no. I was wrong. There was only 2,000 TV sets in the entire world where Disney was so adamant about not relinquishing these rights that he broke with the company of his hero. This may be one of the most important lessons for you and I to internalize. Think about this. This decision, right, this holding to this absolute control, and he always was a technologist, like, yeah, he built a media company, but he always utilized technology and was a fan of technology. He understood way, this is something that's going to come up in the story of an overgame. Disney understand that this new technology, TV, it was an ally, not an adversary. And Disney understood this years

Starting point is 00:41:29 before other movie studio moguls did. There's a line in the book where it says that the other studios regarded television as a homeowner does termites. And he's at like a meeting, I think I covered this later on, where he's at a meeting and they're like yelling at him, they're calling him a traitor. And he's like, you don't understand. This is an ally. I'm going to get into that. But I really need to like, I want to spend some time here. So you and I don't ever forget this. Again, he makes a decision in 1936. 1953, it's going to give him the funding of the park and then be the greatest promotional

Starting point is 00:41:59 tool for his business has ever existed. And so this idea that I wrote myself, and these are the notes that you can find in Founders Notes too, this decision paid dividends 20 years later. Hold on. Technology developed by other people constantly benefited Disney's businesses. There are many such cases in the history of entrepreneurship just like this. Go back to the book. Disney clearly explains, this is before he assigned a deal, right? This is excellent. Every time I got to thinking of television, I would think of this park. And I knew that if I did the park, I would have to have some kind of medium like television

Starting point is 00:42:36 to let people know about it. So I said, well, here's the way that I'll get my park going. It is natural for me to tie it in with my television. So I just sort of insisted that my Disneyland park be part of my television show. The network that signed for a Disney program would have to help pay for the park. And this is why it's so important that I really do feel Walt did not really look around.

Starting point is 00:43:02 He looked in. He looked into his personal taste. He built a business that was authentic to himself. And the most authentic business, the business that was most authentic to himself, which is many such cases in the history of entrepreneurship. This is why I say like the myth of this, you know, young entrepreneurial genius. In almost every case of these stories that you and we've now done, what, 350 of them together. The greatest work that somebody does does not come in the first decade of their career. It is many, many, many decades into their career.

Starting point is 00:43:30 Disney's greatest creation came 35 years, 35 years into his career. Same thing with Steve Jobs. And it is because he had this ability to be a contrarian, not contrarian for contrarian's sake, but because he really believed. He was not looking around. He was looking in. So he goes to this meeting with a bunch of these other studio heads and the head of mgm said you're being a traitor to the motion picture industry listen to this is clarity of thought here that is silly if i was able to put a trailer of your next movie picture into every home in the

Starting point is 00:44:01 united states how much would you give me? A million dollars? At least. I rest my case. They didn't understand the show was a trailer. In his case, the show was a trailer for Disneyland. It's also a trailer for every single other thing where he does this, I talked about this last week, he does this documentary about the creation

Starting point is 00:44:18 of the movie 20,000 Leagues Under the Sea. People find it entertaining. It has to be a standalone, you know, interesting piece of content on its own. But if you're able to produce something like that, then what's the result? Are movie sales going to go up or down? You get to the end of an hour-long documentary about how this movie is built, you go watch that documentary. And so this is the deal they signed with ABC after NBC and CBS said no. ABC would invest a half a million dollars outright in the

Starting point is 00:44:44 park. Then they have to purchase a million dollars outright in the park. Then they have to purchase a weekly hour-long television program. And for that, think about it, Disney got paid to advertise his park. That's the way you think about it. They're paying him $50,000 a show during the first year, $60,000 a show in the second, and $70,000 a show in the third year. The network would also guarantee $4.5 million in construction loans. At $40 million is the biggest programming package in history. And so now in addition to building the park, he's got to build out all this content for TV. They've never done it before. And this is one

Starting point is 00:45:17 of the things I most admired him. He just wasn't scared to go into areas where he had no experience. He just trusted if I can assemble a group of talented people, they'll figure it out along the way. This is hilarious. I love the story. Bill Walsh remembered that he was going through a period of frequently running into his boss in hallways and parking lots when one day Walt stopped him and said, hey, you, you be the producer of my TV show. Walsh was dumbfounded. Huh? I don't have any experience as a television producer. does Walt said and that was that and we see the approach that he had for animation is the same that he has for the amusement park he says I do not want anyone hired who has anything to do with an amusement park he optimized for talent he wanted

Starting point is 00:45:56 to train his own people he said over and over again I think he got like he started cursing about it too uh where he uh people like when he would recruit from other uh like animation studios he said he had to put up with their goddamn poor working habits from doing cheap pictures he believed it was easier to start from scratch with young art students and indoctrinate them into the disney system something he did throughout his entire career over every single decade is he'd have these these mandatory he essentially created his own training and curriculum regardless of what they were working on and he would make the classes mandatory over and over again. Now, sometimes they could stop the classes, but anytime they were doing something new, like an amusement park, there was mandatory training.

Starting point is 00:46:34 In fact, there's an entire chapter in this book about the school training the actual cast of the employees that are going to work in the amusement park. Another thing I love about Walt is when you tell him it's not going to work and he believes in his thinking, he gets excited. And so they go and meet with a bunch of other amusement park owners. And this is what they say after a presentation on Disneyland. The reaction was unanimous. Disneyland would not work. All the proven moneymakers are conspicuously missing. There's no roller coasters. There's no Ferris wheel. There's no carny games. You don't have barkers like the guys that stand along the midway to sell sideshows. So they say without barkers, the marks won't go in. Now think about that. They didn't call them customers. They didn't call them guests. They called them marks. Custom rides will never work. And besides, the public

Starting point is 00:47:20 doesn't know the difference or care. Many of Disney's favorite projects made no sense at all. Things like the castle and the pirate ship are cute, but they aren't rides, so there's no economic reason to build them. There's too many things here that do not produce revenue. Walt's screwy ideas about cleanliness and great landscape maintenance are economic suicide. He will lose his shirt by overspending on things that customers never really noticed. Tell your boss to save his money. Tell him to stick to what he knows and leave amusement business to people who know it. This did not frighten Walt Disney. Those guys who call a paying customer a mark couldn't grasp what he had in mind. And again, he trusted his own

Starting point is 00:47:58 judgment. He trusted his own taste. He's not what he's really trying to build. And he said this over and over again. It's much closer to a motion picture than it is amusement park. And so he realizes, well, there's a good place for me to recruit talent. And that is my studio. That's hilarious because he set up a separate company. This is WED. It's separate from Walt Disney Studios. And so in designing Disneyland, we thought of the park as if it were a three-dimensional film. We wanted everything that guests experience, not only the shows and rides, to be an entertaining part of the story. This was a new idea. We took the most basic needs of guests and turned them into attractions. Disney, this is hilarious, Disney continued to prowl through the studio, tapping people for his park. Some of them would only be gone for a few

Starting point is 00:48:40 weeks or months, and in some, as it turned out, for years. The staff members left behind began referring to the new project as Cannibal Island. That is hilarious. They had eaten into their work for so much that now the new project is called Cannibal Island. One thing I think Walt Disney would agree with, it says in multiple books that he's just not a snob. He has high levels, high standards, and he demands excellence.

Starting point is 00:49:05 But he's very informal. And so there's just a ton of unique ways that Disney would recruit talent to work on Disneyland. And so one of the biggest things that he didn't know how to build was he had these giant ships, and you had to build your own entire river. And so he's going to recruit this admiral, this former admiral from the U.S. Navy, this guy named Joe Fowler, who's going to work. Not only does he help build Disneyland, but he winds up building Disney World as well. And listen to this exchange. He goes to meet him. He says there was no discussion of any specific job. But as the

Starting point is 00:49:33 visitors made their farewells, Walt said to him, Joe, I'd like you to have come down. I'd like you to come down next week and have a look at Disneyland. We'll send you a ticket. The ticket arrived quickly. The next Monday, the admiral, having packed a single change of clothes, set off for Los Angeles, telling his wife, I don't know anything about the motion picture business. I'll be back tomorrow night. Mrs. Fowler would not see her husband again for three weeks. He arrives to Burbank at the studio office, and Walt talked to him about Disneyland for half an hour. Then he excused himself. He said he had to go see rushes from the previous day's filming. I'll be gone for maybe an hour, Walt said. Disney never returned. After a while, a secretary appeared in the doorway. Are you Joe Fowler? Yes. Will you come with me?

Starting point is 00:50:13 This is your office. There's some contractors in the office opposite of you that want to talk to you. And then he handed him an envelope. Here's the keys to a car. That was my introduction, said Fowler. Nothing was mentioned about salary for a week. He was to be the construction boss for the park, which had to be open in a year. And then another thing I love about this story is there's just a ton of these relentlessly resourceful ways that they get this done on a smaller budget and in record time. So Disneyland or Walt Disney had this landscaping was incredibly important to the look of the park, the story of the park. And so he wanted he hired this landscape firm. He's OK. I need all these mature trees, mature. The problem with buying mature trees are they they're really, really expensive. You're literally buying time and they only have a couple hundred thousand dollar budget and they have to landscape, you know, hundreds of acres. And so the trees that Walt Disney wants are like $500 each.

Starting point is 00:51:09 They don't have enough money to buy the amount of trees they need if they're $500 each. This is how they figure out a way to buy them for $20 each. Bill was friends with the head of landscape architecture for the California Department of Transportation. And he got advanced notice when a new road was about to be cut down and there's trees that stood in its path.

Starting point is 00:51:25 The Santa Monica Freeway, the Pomona and the Santa Ana Freeways all yielded trees for Disneyland. We paid $25 for each tree to the contractor who was just going to bulldoze them and take them to the dump. That's not all they did. At night, they would drive around prosperous neighborhoods, knocking on the doors of houses whose yards contained promising specimens and offering them to buy them outright. Sometimes they got lucky. In Beverly Hills, they came upon a magnificent banyan tree, a tree that was easily worth several thousand dollars. They rang the doorbell, and when the owner answered, they asked him if he might consider

Starting point is 00:52:04 parting with his tree. The man laughed. That big old son of a bitch there? I'm so tired of that thing. They got that tree for the cost of installing a small tree in its place. And so when it came to picking a host for the show that's going to be on ABC called Disneyland, it was very obvious that there was only one possible person, and that was the actual founder. And I think more founders should do this. They're in the best position

Starting point is 00:52:28 to tell the customers why. Why does a product exist? Why is it so important to you? In fact, one of the best descriptions I heard of this is when many years ago, the first time I read James Dyson's autobiography, Against the Odds, he talked about this. I think I talked about this the last time on episode 300. And he says, I set off around the world to start selling it properly. It was time spent away from designing, but it was to teach me above all else that this experience that is, this is what the experience is teaching him, that above all else, that only the man who's brought the thing into the world can presume to foist it on others and demand a heavy price with all of his heart.

Starting point is 00:53:02 And Walt did not have a public facing TV show before this. And so he's talking about his thinking of why he did this. He says, I don't consider myself an actor or anything. That's the greatest thing. It's like trying to be authentic, right? But in trying to get a hold of these things, I can introduce them. I can get them going. I'm myself and that's good or bad. I'm still myself. It's my business and I can talk about it. It's what we do here at the studio. So when anything was a new project, that's exactly what he did internally. You know, if he had to marshal resources to try to do something new, like when he wanted to make the world's first full length animated movie in Snow White, he just marshaled his

Starting point is 00:53:34 team together and he told a story. He's like, I'm just going to be doing that now, except instead of just telling my employees, I'm telling the entire world. And make no mistake, he was nervous and anxious about this. And so, you know, Walt Disney had this like very clean cut image. And in many cases, he thought it was somewhat of a contradiction because, you know, he cursed, he smoked, he chain smoked cigarettes and he drank. smooth his throat and lessen his anxiety. It was eggs beaten in wine. So he would drink a little bit of eggs mixed with wine, mixed with alcohol, and it would take the edge off and make him less nervous before he went on the air.

Starting point is 00:54:14 And so this goes back to this idea that the creation of Disneyland was just Walt Disney's personal taste in physical form because Disney did not want any formal organizational chart. He actually says multiple times, I don't ever want want any formal organizational chart. He actually says multiple times, I don't ever want to see an organizational chart. And so we have one of the guys that worked with him was being interviewed. And he says in the very early months, like the very beginning of Disney, and he says, you asked the question, what was our process like? I kind of laugh because process is an organized way of doing things. I have to remind you during the Walt period

Starting point is 00:54:43 of designing Disneyland, we didn't have processes. We just did the work. Process came later. All of the things had never been done before. Walt had gathered up all these people who had never designed a theme park. They had never designed a Disneyland. So we were all in the same boat at one time, and we had to figure out what to do and how to do it on the fly as we go along with it and not even discuss plans, timing or anything.

Starting point is 00:55:07 We just worked and just walked around and made suggestions. And then let's go back to this informal way of recruiting. And I really think it speaks to what James Dyson was just saying. It's like, you know, the founder of the company, your enthusiasm is infectious. If just the way you recruit and you inspire employees, you can do it to the outside world. That's how he was doing it for internal employees, why he was the host of the TV station. But you also see it in how he recruited people. So he's like, listen, you can dream, create, design, and build the most wonderful place in the world, but it still takes people to operate it.

Starting point is 00:55:40 And so this is where he starts. He's recruiting this guy named Van Arsdale. Van Arsdale, France, actually. And he's going to run this school, this essentially training school for all the cast members that are going to work at the theme parks. And it is amazing to me how many people that were really important in building Disneyland, they developed skills during the war, during World War II, that they were directly transferable to the work they wound up doing for Walt. So during the war, Van worked for Consolidated Aircraft Corporation. He was in charge of their training.

Starting point is 00:56:13 And so keep that in mind for about 60 seconds from now. So this is what meeting and being recruited by Walt Disney was like. He shows up at the studio and he says, a dapper looking fellow in a sports shirt entered the office and plopped down into the chair. Without any introduction, I knew I was sitting next to Walt Disney. They shook hands. I'll always remember that handshake. Somehow I'd imagine that Walt Disney would have the soft, delicate hands of an artist drawing Mickey Mouse. But my hand met the firm grip of a man who had grown up doing hard farm labor and working for his father in construction. Disney took out a cigarette and he began to speak. This is his recruiting, right? As I listened to him and this enthusiastic conversation, I was struck by the sense of

Starting point is 00:56:56 excitement that Disney felt for this project. Enthusiasm is contagious. It is infectious. You can literally transfer your enthusiasm for your project to other people. He even turned to me, an outsider, to present his thoughts. He spoke for two hours. And this is Van describing why he feels he was recruited to this job. I guess they felt if I could convert 65,000 cowboys, farmers, and homemakers into dedicated aircraft workers, then I could mold a group of diverse Californians with no business experience into producers of the Disneyland dream. People have to be trained to operate this place, and I

Starting point is 00:57:30 know you can handle the job. That began his working schedule for the next two years of 14 hours a day, seven days a week. And one of the smartest thing that Van does is he imbibes their work with a sense of meaning. This is what stories do. This is why the storyteller is the most powerful person in the world, which Steve Jobs said. The theme of our joint effort would be, we will create happiness. How do we manufacture that elusive, intimate commodity? At Disneyland, I wanted people to feel they were involved in something more than parking cars, serving food, or sweeping up popcorn. He told a parable. Two men are laying bricks. Somebody asked one of them what he's doing, and his response is, I'm laying bricks. To the same

Starting point is 00:58:11 question, the other man answers, I'm building a cathedral. I don't want to go through my life thinking I'm just laying bricks. I'd much rather go through life believing, believing. It only works if you truly believe it, then I'm building a cathedral. And part of that is really important that companies should have their own, they should create their own language. This idea of them creating their own language appears over and over again. I'm going to read you two separate sections that are separated by like 200 pages in the book. Says, we don't, this is part of the training. We don't have customers. We have guests. We're not employees. We're hosts and hostesses. We don't have crowds. We have an audience. 200 pages later, they're talking about, they're still continuing this in modern day with one

Starting point is 00:58:49 of the head of PR at Disney. I was the last word on copy issues for publicity and marketing, and my red pen eliminated the word ride whenever I found it. This is in 2008. When we only describe our attractions as rides, we fall into the category of six flags or Universal Studios. We should rise above them and describe what we do as attractions, adventures, immersive experiences, and of course,

Starting point is 00:59:10 stories. When you are creating Disney magic, the words to describe it should support the magical experiences. That's excellent. Customers are to be called guests. Those who sell the customer's ice cream are called hosts and hostesses. Many of our labels are drawn from the theater. Guests do not form a crowd, but they form an audience. Ticket takers do not have jobs, but they have roles. They were cast members, and when they escaped the audience for a break, they do so offstage, usually in a backstage area. The park as a whole was the show, which the audience first entered through the outer lobby, which is the part which we call parking lot. They call the outer lobby.

Starting point is 00:59:50 Another thing that reoccurs over and over again, especially as they get closer to, they have a deadline. Like the park has to open. It really, I think one of the biggest lessons I took from this book is like, what if I had a self-imposed deadline? I know I want to make a podcast every week, right? But my entire life, I don't really have any other deadlines out of that. It's almost like deadlines force the sense of urgency that is very obvious when you read this book and something that's, I got to figure out other ways to add that to my life and work. But what is fascinating is even as they're getting closer to the deadline, right? It's very obvious that when they open, this park's going to be, I think,

Starting point is 01:00:23 around 80% actually complete. But even though they knew that this park is going to be, you know, I think around 80% actually complete. But even though they knew that wasn't going to be all the way complete, Disney would not relax his standards of excellence and particularly his obsession with detail. He said in the other book last week that it's the detail. If we lose the detail, we lose everything. That was a quote from Walt Disney. And really, what I'm about to describe to you is like, this is soul in the game. He had soul in the game. These are the people that I want to buy products from.

Starting point is 01:00:48 These are people I want to support. Because detail is the most expensive of any other feature because what it costs. It costs time. It's not just the materials. It's the time invested. And so they wind up finishing, what are these going to be? These like horse- like stage coaches. And so every single time one of his employees is like, let's just cut this corner.

Starting point is 01:01:10 Let's, you know, go the cheaper route. Let's go the faster route. You have the same response from Walt Disney. He says, why don't we just leave the leather straps off, Walt? The people are never going to appreciate all this close up detail anyways. Disney treated him to a tart little lecture. You're being a poor communicator. People are okay. Don't you ever forget that. They will respond to it. They will appreciate it. His employee didn't argue, and he said, we put the best damn leather

Starting point is 01:01:36 straps on that stagecoach you've ever seen. And that's just a reoccurring theme, and it's detail that you can't even see up close. If you look at the top of the castle in Disneyland, it says, look at the top of the castle at the base of the highest towers are a series of tremendously detailed gargoyles, which you can barely see from the ground. And yet they are part of our magic formula. They are part of a thousand little tiny details

Starting point is 01:01:56 we are looking at right now, but don't consciously perceive. Individually, they are nothing. Collectively, they add up to a visual experience that the guests cannot find anywhere else. Multiple pages later. In fact, there's a great... Sometimes I really love titles of chapters.

Starting point is 01:02:13 And this is one of the perfect... The title of this chapter that I've just fast-forwarded to is a perfect explanation of what I'm trying to get across to you. It's called The Perfectionist at Work. And so we have another example of this. Another example of this, another example of Walt Disney not appreciating people trying to get him to cut corners. Walt would not cut corners and spotted and hated any attempt to do so. I wanted to put plastic railings up on the top of the houses of Main Street, said Wood, and Walt wanted real wrought iron. They're 40 feet in the

Starting point is 01:02:40 air. Nobody could tell the difference. It's that relentless adherence to this principle. That's what he said. He's like, look, the thing that's going to make Disneyland unique and different is the detail. So if you lose the detail, you lose it all. It's like this beautifully simple and very powerful idea that he had. And one thing that's obvious that I just jotted down to myself, it's like if

Starting point is 01:02:59 Walt Disney is looking at something, he is thinking about ways to improve it. And I need to make the point, like this attention to detail is not just superficial things. Like attention to detail saved him multiple times. And so at the time, they need a ton of, they have to build their own river for God's sake. And they're running out of time and money. And so Disney's engineers come to him and they're like, hey, we need a big, very expensive pump that will deliver all the water that we need from the wells. And Disney said, no, just cut a flume to the river

Starting point is 01:03:30 and turn the water on. And the engineers like you can't do that. So they open up these maps and they explain that the water needed to flow uphill and it wouldn't do that. Try it anyway, Disney insisted. So again, this is attention to detail saving him, not just for cosmetic or even superficial reasons. They did this and it worked. Disney had carefully gone over his acreage months earlier. This is a form of attention to detail, right? He had carefully gone over his acreage months earlier when it was just orange trees, orange trees. He had talked with the farmers about irrigation and he had seen how they managed it. He knew that the surveyor's maps were wrong. That is a form of detail.

Starting point is 01:04:10 Paying attention to detail saved him. And so there's a bunch of people around Walt trying to get him to push back to like not adhere to the deadline. The reason the deadline can't move is because it had to come live on July 17th and not a day later because the partnership agreement that he had with ABC was that the park's opening would also be in conjunction with the most ambitious live television broadcast yet ever attempted. All of it was live. It was the largest collection of live television equipment. They had spent one of the largest budgets like advertising in newspapers all over the country. No matter what happened, even if the park was 50 percent of the way done, it had in newspapers all over the country. No matter what

Starting point is 01:04:45 happened, even if the park was 50% of the way done, it had to go live on July 17th. So a few days before the park opens, it's him and his wife's 30th wedding anniversary, and they decide to have a party at Disneyland. And this was just hilarious. It's one of my favorite stories, because it really builds, to some degree, when you study Disney, Walt Disney seems kind of like superhuman. And this story kind of humanizes him. So he does say something's fascinating at the very beginning. Now, at the very beginning of Disney, he would refuse to allow themselves any kind of alcohol. And his reasoning for that really speaks to the love that he had for the work that he was doing at this point in his year and in his life, rather.

Starting point is 01:05:20 He says, I feel when I go down to the park, I don't need a drink. I work around that place all day and I don't have one. After I come out of a heavy day at the studio, I want a drink to relax. So he talked about the difference, right? He was drinking a ton at the end of the night when he was, you know, in a much worse place. But this one night in Disneyland, a few days before it opens in celebration of his 30th wedding anniversary, there's a ton of alcohol and his daughter just tells a great story. It just brings a smile to my face. Says he was loving every minute of it

Starting point is 01:05:48 and just grinning at people. Later, everyone was worried about dad driving home. They were trying to steal his car keys and everything. And I just said, daddy, can I drive you home? He said, well, sure, honey. He just climbed in the backseat of my car and he's smashed. He's just absolutely smashed at this point.

Starting point is 01:06:04 He climbed in the backseat of my car. He had a map of Disneyland and he rolled it up and tooted it in my ear as if it was a trumpet. And before I knew it, all was silent. There he was with his arms folded around the map like a boy with a boy trumpet sound asleep. And even though they have to open in two days from now you know there's just there's a ton of stuff that's either broken or not finished uh the landscaping budget had run out so again a form of resourcefulness uh they had they started spraying dead grass with green paint so it looked like the grass was alive and healthy there's just a ton of things that are just not

Starting point is 01:06:40 going to be done some of which they're trying to do up until the very last minute they're literally working on the park right before the show goes live. And really the main point behind all this is it said Disney was well aware of the shortcomings. And I think anybody that's been inside of a company, you just realize it's maybe not as drastically unfinished as what's happening to Disney. But there's just always things. It's like you never get to the point where it's like, oh, everything's working, functioning properly.

Starting point is 01:07:02 This is perfect. There's nothing else we need to improve. That state of affairs never exists. And I think reading this book and especially this chapter, it's just that constant reminder. And even a legend like Disney, like he goes to bed the night before their opening and he's just sure that he's going to be at the center of the most public humiliation in show business history. He had become so anxious leading up to that point. He told his wife and daughters to stay home because it's like, oh, there's no point in coming. You're just going to see a gigantic failure.

Starting point is 01:07:30 I'm ruined. He was having trouble sleeping. He just wasn't feeling good. But what was fascinating is the day that it came, the opening day, he put on a good front, even if he wasn't feeling good. He says the dark premonitions had lifted, and now he seemed to be completely at ease

Starting point is 01:07:43 and enjoying this huge moment. And that huge moment is the opening, the simulcast live broadcast of the Disneyland show and the opening of Disneyland Park. This is crazy. The United States contained 169 million citizens on July 17th, 1955, and 90 million of them watched the show. 54.2% of the population. And so Disney's going to host it. He's got a bunch of other people there like Ronald Reagan, the future governor of California. But what was fascinating is the guy, his friend Art Linkletter, which one of the most famous talk show hosts that he took out when it was just Orange Groves and trying to tell him

Starting point is 01:08:19 the story. The guy's like, I hate to tell my friend that he's just lost it. But he asked, he's like, hey, I need help. Like, you know, a series of, you know, people that can ad lib, good hosts, but I don't have any money to pay you. And Linkletter's like, that's fine. I will do it for the union minimum, which is like, you know, 500 bucks. And Disney could not believe that his friend would, you know, it's like hiring an A-list actor for minimum wage. But Linklater was a very sophisticated entrepreneur too. And he's like, listen, I will do it. And in lieu of payment of my normal rate, just give me the photo concession at Disneyland, the rights to the photo concession

Starting point is 01:08:56 at Disneyland for the next 10 years. This is an interesting fact of history. 40 years later, Linklater wrote, surprisingly, the net returns from this valuable concession made me the highest paid broadcaster for one show in the history of television. And interesting enough, because you never know when a friend of yours is offering you like the deal of a lifetime. He tried to convince friends of his like, hey, buy up all the land that I'm not using on Disneyland. Please build a hotel. I don't have the money for it. Please do this. You're going to be so rich. And nobody did it. They just didn't believe in it. And so really, you know, Disney is obviously obsessed with control.

Starting point is 01:09:32 And now, you know, they can try to control that as much as possible. If you've ever been to Disney World, they want to own the hotels. But they didn't have that option at this point. This is, you know, right around the opening of Disneyland. And this is just a reminder that you have to do what you can where you are with what you have. In Anaheim, at the opening of Disney, right, before Disney opened, rather, they had a total of 87 hotel rooms. And so because they can't have the money to develop the hotels themselves, they actually signed an agreement with outsiders, which is very un-Disney-like at this point. But they just do the best deal possible. So they do a license agreement. You have the right to build a hotel associated with Disneyland. It's going to cost them $1,000 per month. Plus you have to pay 2% of the gross revenue to Walt Disney, plus $25,000 a year to use the word Disneyland. But this is him just

Starting point is 01:10:21 doing what he can where he is with what he has. This was unusual. Disney always kept a tight hold on his name. But the fact that he would allow access to it reflects how much he wanted his park served by a good hotel that was currently beyond his means. And so as you can imagine, the day of the opening, a ton goes wrong. The show goes off really well. But considering how fast it is in one year and one day, you know, it says that Disney knew better than anybody else that the park would open less than 80% finish and that there was a lot of hard work ahead. But the hard work did not frighten him because hard work never had frightened him. And so there's a lot more detail in the book.

Starting point is 01:10:55 I'll just give you an example of some of the stuff that went wrong. They ran out of food and water. There were not enough bathrooms. So people had to pee in the bushes. The boat got stranded. It ran off the track. So the guests had to swim to shore. The asphalt was still soft because it was so hot and they had just poured it that women's high heels were getting stuck in there. There was record high temperatures of over 100 degrees.

Starting point is 01:11:18 There was a gas leak that closed down part of the park and luckily didn't cause an explosion. The car ride where like little kids drive cars, which at this time were called Autotopia, there was several car crashes and one kid lost all of his teeth in his mouth. Walt had to resupply the bathrooms himself with toilet paper. So he's carrying loads of toilet paper to the bathrooms and they caused the worst traffic jam in Orange County history. But here's the most important part. It was total confusion, both on camera and behind the scenes, but it was a celebration of the birth of a dream. We had a park. It was a start. And then there was a fascinating contrast I still think takes place today where the media, the actual newspaper writers and everybody else, they're like, Walt's dream is a nightmare. This is a $ dollar piece of crap it is a people trap I can't believe how bad this is and yet the true believers that actually go and then they write these reviews and again I think this is what was helpful where

Starting point is 01:12:15 you had eight months of Walt describing like this is my dream this is the goal this is what I'm working towards they understand that hey hey, the way that Disneyland was on day one is not how it's going to be. It's going to be constantly evolving, living, breathing thing. A note I left myself earlier in the book, which I don't know if I read to you, was that Disneyland, his goal for Disneyland was an outdoor, living, breathing, constantly evolving story, a movie that he could update and improve upon for the rest of his life. And so the initial negative headlines from the press, they start to abate as you have more of the people that are buying into his dream and the story and there

Starting point is 01:12:50 are fans of his work and trust that he's going to deliver on what he promised he would. And one excerpt from this review is here. We first noted the thing which impressed us ever more deeply as the day went on, the care and the quality of materials which had gone into everything. Disneyland is not shoddy. It is not a carnival. It is not false fronts and makeshift rears. It is carefully built by experienced workmen. Details are not forgotten and materials are of the highest obtainable quality. And some of the criticism that he got from the media was accurate. He even said there's going to be changes made year in and year out forever. In a project, in a business, in this idea that, hey, we can make changes year in and year out forever is exactly why he built Disneyland. Disney was determined to keep it growing by what he called plussing, his term for improving what

Starting point is 01:13:39 was already there and making constant additions. Disney said, it has been said that Disneyland will never be complete. In fact, I said it. The way I see it, Disneyland will never be finished. It's something we can keep developing and adding to. A motion picture is different. Once it's wrapped up and sent out for processing, we're through with it. If there are things that could be improved, we can't do anything about it anymore. I've always wanted to work on something alive, something that keeps growing. And now we've got that in Disneyland. And that is where I'll leave it for the full story. I highly recommend reading the book. It is a quick read. It gives you a brief overview of his life and then goes into great detail about how he built Disneyland. If you buy the book using the link, you'll be supporting the podcast at the

Starting point is 01:14:23 same time. Another way to support the podcast if you want is to buy Founders merch that is available at founderspodcast.com. That is 347 books down, 1,000 to go. And I'll talk to you again soon. When you read about or you listen to this history of Disneyland or the creation of Disneyland, this ever evolving idea, what becomes obvious is that this idea in many ways was pulled out of Walt Disney. And this just happened to my friend Ben. My friend Ben is the founder of Vesto. So I'm building this trusted partner network. And so anybody, any company that advertises on founders, one, I have to know the founder. I have to build a relationship with them. Relationships run the world. That is a main theme from the history of entrepreneurship. It's really important to build relationships with other founders. And because these trusted partners are able to gain exposure

Starting point is 01:15:11 to an incredibly high value and intelligent community of founders, in return, I ask them to give you the best possible deal. That is very straightforward, very easy to understand. What I did not understand going into this is how valuable it is for both people. So let me give you an example. I was talking about Vesto for a long time. Way before I talked about Vesto, that's V. People say I slur my words. So it's Vesto.

Starting point is 01:15:35 V as in Victor, E as in egg, S as in Senra, T as in Tom, O as in Oprah.com. Vesto. I'll try to say it clearly. Well before I ever talked about it on the podcast, I got to know Ben. Every time he comes through Miami, we either have dinner together or we go for long walks. We have a bunch of mutual founder friends. And the reason I found out about his company is because I had two separate founder friends on two opposite ends of the founder spectrum, if you will. One was a bootstrapped giant company. The other one was a venture-backed company. And yet both of them were using Vesto

Starting point is 01:16:06 to get a higher rate on their business's idle cash. And so that is the feature I discussed on previous podcasts. But what was fascinating is, one, if you go to Vesto.com and you scheduled a demo, you talk to the actual founder, Ben. So if you wind up doing this, please, when you talk to Ben, tell him that David from Founder sent you.

Starting point is 01:16:23 But what was fascinating is what happened is Ben had called me and he said a new product was being pulled out of him by the Founder's audience. And so as he was doing these Founder calls with these businesses that hide idle cash that they wanted higher returns from, they're like, hey, I have another problem. Is there a way you can solve this as well? And the problem was that in many cases, they owned more than one business or they owned different subsidiaries in different countries. They had accounts at different banks. They essentially wanted a way to reconcile and to see all of their company's financial accounts in one view. And so Ben goes out and builds this. And then other founders that listen to founders are now using this product. So if you go to Vesto.com, you can see what I'm

Starting point is 01:17:04 talking about. It's all of your company's financial accounts in one view. You can connect and control all of your global business accounts from one dashboard. And then once you can see everything live, if you have a bunch of idle cash, you can then ask Vesto to uncover your idle cash and then securely put it to work on autopilot. And so if that sounds useful to your business, make sure you go to Vesto.com, you schedule a demo, you talk to Ben, tell him Dave from Founder sent you and he'll give you $500 off. In the coming weeks, I'll talk more about this trusted partner network that I've been building. All of these products and services are built by founders that I know that I have a direct relationship with that I can call or text anytime

Starting point is 01:17:37 I want. All of them are building great products, and all of them are going to be offering exclusive discounts available nowhere else to you. The first one in that trusted partner network is Vesto. So go to Vesto.com. Tell them Dave from Founder sent you and you get $500 off. Thank you very much for listening. Thank you very much for the support. And I'll talk to you again soon.

Founders - #347 How Walt Disney Built His Greatest Creation: Disneyland

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