The difference between a gamble and a risk

A view from Dave Trott: The difference between a gamble and a risk

Walt Disney’s first Mickey Mouse films were silent, like all films in those days.

Plane Crazy and The Gallopin’ Gaucho were little five-minute shorts before the main film – that’s all cartoons were.

But he couldn’t find a cinema to show them.

In those days the film studios owned the cinemas, and would only show films they owned.

Disney wanted to rent his films not sell them, so there were no takers.

Then Al Jolson made the first talkie: The Jazz Singer.

Suddenly no-one wanted to see silent films any more, just films with sound.

Disney quickly put sound on his third Mickey Mouse film: Steamboat Willie.

Everyone said he was nuts, cartoons didn’t have sound.

But Disney could do it fast because he didn’t have to shoot lip-synch like live-action films.

Suddenly Disney had a talkie to offer to the cinemas.

But he still wouldn’t sell his films – if they wanted it, they had to rent it.

And they had no choice, they had to have films with sound so they had to rent his films.

Disney took a calculated risk and it paid off.

Years later he made the first feature-length cartoon: Snow White and the Seven Dwarfs.

Everyone said he was nuts, no-one would go to see a one-and-a-half-hour cartoon, it would bankrupt the company.

But when it ran, in 1937, it took $6.5m, more than any sound film so far made.

And when it won at the Oscars, Disney got a gold statue and seven little gold statues.

Disney took a calculated risk and it paid off.

In 1952, when Disney wanted to open a theme park, everyone said he was nuts.

In 1955, Disneyland opened and attracted 20,000 visitors a day, 3.6 million in the first year.

In 2014, Disney theme parks around the world attracted 134 million visitors.

Disney took a calculated risk and it paid off.

In 1973, George Lucas tried to get Star Wars made, every studio except one said no.

It was a ridiculous B-feature script, no-one wanted to make it.

The studio that agreed to do it did so because Lucas cut his director’s fee by two thirds.

He agreed to cut his fee in exchange for all merchandising and sequel rights.

Films didn’t usually include merchandising rights because Hollywood made films, not toys.

But Lucas remembered, as a child, how much he and his friends had wanted the spaceships and ray guns and helmets that they’d seen in Flash Gordon and Buck Rogers movies.

He knew that, for children, a film doesn’t end when you walk out of the cinema.

Which is why Lucas is now worth $5.7bn.

Star Wars sold $3bn of toys per year – by 2012, the sequels, videos, games and books had made $27bn, and that year Disney paid $4bn for the rights.

Lucas took a calculated risk and it paid off.

That’s the whole point of going where other people tell you not to go.

No-one thinks it can be done because no-one’s ever done it.

So because no-one thinks it can be done, you’ve got the whole sector to yourself.

Of course it doesn’t always work, but that’s the difference between a gamble and a calculated risk.

If you’re not sure what you’re doing, it’s a gamble.

If you know what you’re doing, then it isn’t a gamble, it’s a calculated risk.

But it does depend on you knowing what you’re doing better than anyone else.

Then you don’t have to follow other people’s opinion.

You only follow other people’s opinion when you think they know more than you.

In which case it’s a gamble, and you shouldn’t gamble.

Dave Trott is the author of Creative Blindness and How to Cure It, Creative Mischief, Predatory Thinking and One Plus One Equals Three

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