How Walt Disney’s Biggest Failure . . . Became His Greatest Success

Walt Disney’s risked it all for Disneyland in one of the most audacious entrepreneurial moves in history. But it almost never came to be . . .

While we all know that Walt Disney was an incredible animator, movie-maker, and entrepreneur, what few people know is that he was no stranger to failure.

But it was willingness to bet big - and learn from his mistakes - that made all the difference.

Disney files bankruptcy

Back in 1921, Walt Disney began his career by forming a studio to produce animated short films.

While Disney was enthusiastic, he was also inexperienced in running a business and the “Laugh-o-Gram” studio quickly fell into financial trouble.

Three short years later, Walt had to call it quits as his studio went bankrupt.

Forced to sell his belongings to pay debts, Walt even lived in his office for a time because he couldn’t afford housing.

With only $40 in his pocket, Disney and his brother Roy decided to move to Los Angeles.

Early success

It was in L.A. where Walt and Roy found success with his new studio, he Walt Disney Company.

In 1928, they launched Mickey Mouse in the first ever sound cartoon, Steamboat Willie.

As he had back in Missouri, Walt bet it all again a decade later as he created the first ever full-length animated feature, Snow White. But this time it worked. What critics were calling “Disney’s Folly” during production . . .

became the highest-grossing film of its time.

Success begat success and the Walt Disney Company grew.

But, entrepreneur that he was, Walt was not done. It was at a dirty amusement park that he visited with his daughters one day that he was struck with an idea that really would almost become his downfall.

Disneyland almost never happened

It was the early 1950s and Disney had an idea for something entirely new—he would create a “theme park” (no one had ever done that before) that wasn’t just a collection of rides but a fully engaging, immersive, fun, family experience.

He would call it Disneyland.

But dreams cost money.

To fund his vision, Disney again poured everything he had into the project.

He borrowed against his life insurance, emptied his savings, and struck a controversial deal with ABC Television, even trading part ownership of the nascent park for much-needed cash.

The stakes couldn’t have been higher.

Opening day disaster

When Disneyland opened on July 17, 1955, everything that could go wrong, did. Dubbed “Black Sunday” by the press, opening day was indeed a disaster:

• Counterfeit tickets doubled the expected crowd, turning the park into chaos.

• A plumbers’ strike forced Disney to choose between working bathrooms or drinking fountains—he chose bathrooms, leaving guests parched in the sweltering July heat.

• The fresh asphalt on Main Street melted in the sun, and women’s high heels sank into the ground.

• Rides broke down, food vendors ran out of supplies, and the press skewered Disney’s grand vision as a poorly executed flop.

Disney himself was crushed but refused to give up.

Disneyland version 2.0

For most entrepreneurs, such a public failure would have been it.

But Walt Disney wasn’t most entrepreneurs.

Instead of retreating or making excuses, Disney and his team sprang into action to transform Disneyland from a chaotic flop into a world-class attraction:

• Walt personally walked the park, listening to guest after guest to see what was wrong in their eyes.

• Engineers worked tirelessly to repair and improve ride mechanisms. Attractions like the Dumbo ride, which didn’t work on opening day, were overhauled.

• They reorganized operations, hiring additional staff and retraining existing employees

• Disney and his team introduced maps of the park

• The landscaping was improved, music was added, and more characters beyond Mickey and Minnie appeared throughout the park

Slowly, word of mouth began to spread. Families came back, and by the end of its first year, Disneyland had welcomed over 3.6 million visitors.

Yes, we all love Disneyland (and maybe a few of us even grew up a few miles away, watching the fireworks from our roof), but none of us would have ever had that great experience without Walt’s determination and vision.

Takeaway

Walt Disney learned pretty quickly something that all entrepreneurs must to learn: The Version 1.0 of an idea is not always great.

It is the willingness to keep going and create a Version 2.0 that often creates the magic.

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Steal This Strategy

📖 Book – The Lean Startup by Eric Ries
This business classic introduces the concept of a Minimum Viable Product (MVP)—the smallest, simplest version of your idea that can be tested and improved. Like Disneyland’s chaotic opening day, your MVP is a starting point to learn what works and iterate.

🎥 Video – “The Opening of Disneyland” (1955)
The full ABC broadcast of opening day at Disneyland’s debut. It’s a reminder that even the boldest ideas have humble beginnings.

🛠️ Disney’s Process – Imagineering in a Box (Khan Academy)
Learn how Disney’s Imagineers approach storytelling, prototyping, and building magical experiences—perfect inspiration for creating your own Version 2.0.

🎥 Walt’s Philosophy – Walt Disney: "Keep Moving Forward"
A short video highlighting Walt Disney’s determination and focus on continuous improvement. His mantra, “Keep Moving Forward,” is a guiding light for any entrepreneur.

Overnight Challenge

Identify one small improvement you can make to your business, project, or idea based on customer feedback. Just one! Implement it tomorrow and see how it changes the experience.

About Steve

Steve Strauss is the best-selling author of The Small Business Bible (and 17 other books), Inc.’s small business columnist, a lawyer (non-practicing), and an entrepreneur. He sold his last venture, TheSelfEmployed.com to Mark Cuban & Zen Business.

Need a ghostwriter to create some thought leadership for you, or a newsletter for your own business? Contact Steve!