Episode 16: Investing in Innovation (Transcript) - pixiedustandprofits.com
Lessons from Disney in creating a culture of innovation in your small business.

Episode 16: Investing in Innovation (Transcript)

Mar 3, 2020

The

podcast

Intro (00:01):
Pixie Dust & Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher and Yasmine Spencer. As they explore the mouse’s $12.6 billion operation and break down exactly how you can apply these big scale concepts to your own business.

Yasmine (00:26):
Hello, and welcome to another episode of Pixie Dust & Profits. So today we’re going way, way back in time. In fact, we’re going back to the opening of Disneyland in California on July 17th, 1955. When Walt said that Disneyland will never be completed, it will continue to grow as long as there is imagination left in the world. And this quote really stuck with us because Nicole and I have been talking about the fact that, you know, Disney is an icon. When you think about constant innovation in a business, other brands that, you know, really push the envelope on a regular basis are Apple. For example you know, Google has been doing that Amazon, even with how they revolutionize the retail industry and Disney has a unique way of pushing the envelope, but really making it a magical experience. So today’s episode is going to focus on how Disney innovates and what we can learn from that and how you can apply innovation to your own business without having to, you know, build a new attraction every couple years.

Nicole (01:30):
Yeah, it’s probably a bit expensive to try and build a new attraction, or if you’re like a place like six flags, a flagship rollercoaster every season, that’s why they don’t do it every season because it’s a big risk and it’s a lot of money. And so we’re really excited to talk about small innovations that you can do in your business. That don’t necessarily mean big investments.

Yasmine (01:52):
So let’s go back to that quote. When Walt said that he was really responding to the fact that the opening of Disneyland was a hot mess express, it did not go well. And in fact, we touch upon how badly it went in previous episodes. But you might also want to check out the Imagineering story episode one, which goes in a lot of detail about how Disneyland came to be and want to just ask her the first little while was and how it was not the experience that we have today. So when we think about Disney and its current day state, the one thing that’s always apparent is that there’s always something happening. There’s always something new. For example, there’s always construction going on at Disney. They’re always working on again, like new rides and stuff. And today we’re gonna focus a little bit more on how Disney uses incremental innovation to keep people coming back.

Nicole (02:51):
Yeah. And so one thing I really want to talk about is that I have gone to Disney numerous times, especially since becoming a vacation club member. And there are people out there who will reign on your Disney parade, if you’re the type of person who goes, you know, once a year or even more than once a year. Sorry, sorry. Yeah, exactly. And so, you know what non doesn’t mean people don’t always understand is that Disney is constantly innovating and it might be in small ways, or it might be in big ways. Like the most recent is like Star Wars Galaxy’s Edge opening is such a huge change for that entire park experience. Just a few years ago, there was no toy story land. There was no Galaxy’s edge. And Hollywood studios was the type of park that we would probably skip because it had a roller coaster and a free drop tower terror.

Nicole (03:38):
And with a young child, that’s not exactly the type of park experience we needed. You know, we would go, we would do the frozen singalong and then we would leave the park. And now, you know, that part cannot stop being filled. People are, they’re lining up at five in the morning to get on the latest star Wars rides. And so, you know, this approach to constantly innovating, definitely keeps bodies coming back and coming back for more. And it’s always been in the essence of Disney, like from the very beginning, he would always challenge his Imagineers to come up with something new. And he didn’t really care about the numbers and the risk and the financial side of things at times. And that’s why, yes, that’s why he got his brother Roy to kind of reign them in a little bit. But you know, it’s always been part of their, their essence to, you know, take all the risks and try and figure something out that’s new.

Nicole (04:31):
And if you watch the imagining daring story, you can get so much more out of this, but you know, essentially take the risks innovate and they will come. Sometimes you’ll mess up, but other times you’ll have a really big hit. And so, you know, the last few trips I’ve gone on, we have seen construction in every facet, whether it’s at the hotel or inside a park. And even when they are building something new, they still try to make it fun by having these facades over in the building that make it look like the picture of the building is on the wallpaper. That’s hiding all of the construction happening. So they still try to make it a pixie dusty experience for the guests coming into the parks.

Yasmine (05:12):
Yeah. And like the changes and innovations like that. And they’re not always huge as we had mentioned they’re not opening up a new star Wars land or toy story land every year or so, there are smaller changes. So I was talking to Nicole before we started recording this episode and it’s been almost exactly one here since I’ve been to Disney. I have to cancel my last two trips. The last time I went was for my bachelorette party and we’re actually going back in March to do some research and planning for a special project that we have coming up. We’ll fill you in on the details a little bit later on, but I literally had a list of like 10 things that I wanted to check out that have just popped up in the past year. And like obviously star Wars land is at the top of that list, but there are new restaurants, for example, just opened up in Epcot, a new quick service restaurant called Regal Eagle. In fact, Nicole, when you were there looking for a quick service in America, you didn’t find anything there because it was under construction. Yeah.

Nicole (06:08):
My kid was craving chicken fingers and fries and a burger or whatever it was. And I was like, well, we’re on our way. We’re in the showcase now, United States will be here soon. I really want to date in Tokyo, but I was vetoed by the rest of the family. And so we were, we got to America and there was a whole wall of construction there and there was no quick service restaurant, but then I quickly lifted up in my Disney experience and saw that they had this like barbecue establishment coming. And I was so excited for it because barbecue. Yes. So much better than chicken fingers and fries. So I’m excited to check that out.

Yasmine (06:44):
Yeah. We definitely have it on our list for our upcoming trip in March and even within Epcot itself right now, there’s the art festival going on and that wasn’t a regular thing, right? Nicole, like we have the food and wine.

Nicole (06:57):
I’m not sure what came first, but they had in the spring, this like flower festival that I have not had the chance to make it to yet when I did my star Wars, 10 K, we got to run through Epcot. So I got to see some other really cool topiaries and stuff. But they had that in the spring. And then in the fall they had the food and wine festival, which was basically just at [inaudible] for adults and, you know, different drinks, different like bite sized meals you could get at every single country. And that is super popular. If you are going to Disney world between, I think the end of September and November just expect it to be really busy because it’s just such a great time of year for adults to go and experience like all of that culture and food. And so they had these two things, one in the spring and one in the fall and they knew the model worked right.

Nicole (07:44):
It was bringing in people for the weekends, especially for the food and wine festival. So I’m sure that they looked at their calendar. You know, if you have a marketing calendar, a promotional calendar for yourself, you’ve got this year long picture of what you want to accomplish in your business. And I’m sure they looked at that and they were like, Hmm, what can we do between January, February? Like what can we do between these two things to bump up numbers in that, you know, winter off season? And I can attest that winter does happen Disneyworld. I was there in January this year and I think it was around 35 degrees Fahrenheit for multiple days that we were there. It was very cold, even for me as a Mainer. So do I forgive my many years for a, for a bonnet instead? And so, you know, they probably looked at the calendar though, like what can we do to boost these numbers during this time of year, where there are no school vacations happening and it’s a little bit colder and, you know, even locals won’t come out when it’s this cold.

Nicole (08:44):
And so then they started this art festival and it’s really, really fun. You walk around the parks, you see all these different artists doing their interpretations of Mickey and Donald. And there was someone there this year who was a chalk, a 3d chalk artist. And so he was drawing little scenes from frozen on the sidewalk that you could sit next to and pose with because it was 3d when you took a picture with it. It was really, really cool. So the lots of like innovation and who they’re bringing into the parks and also just an innovation where they didn’t need to reinvent the wheel. They already have like the podiums and all the things they needed to make another event like this happened because they put on two others like it, and they just changed what the content was.

Yasmine (09:29):
So Disney also basically took that same approach when they launched Tokyo Disney and Disneyland Paris as well. So the way that it ended up coming to be was Disney, didn’t exactly plan to expand to international markets. They were approached by a partner in Japan at the time who wanted to bring the Disney experience to the East. And the way that it ended up working out was Disney was essentially hired as consultants and construction. They were brought on board to basically recreate that American experience in Tokyo. And

Nicole (10:08):
I think they actually said like, we want Disneyland here. Yeah,

Yasmine (10:11):
Yeah, literally. So how did it work? The designers or the Imagineers at the time, they actually went back and literally pulled out blueprints from when Disneyland was constructed in the fifties and pulled out you know, all of the paperwork and everything modernize it a little bit to that day standards and recreated the park. Now, obviously there were some nuances, right? You have a complete different landscape to work with, but for the most part, it was basically a replica. And when the opportunity came to launch Euro Disney, which is not what it’s called anymore, they did the exact same thing in Paris. They created another sorry. They created another Disneyland. Again, there were some differences because what was really interesting was they were talking about the draw of Disney and the fact that it was American and how Europeans were attracted to the idea of the American West. So thunder mountain was sort of the iconic focal point and the way that they designed that ride in Disneyland Paris. Like, man, I just want to go Disneyland for that alone. Really? That in space mountain. Oh my gosh.

Nicole (11:22):
Just based on, and it’s different there. That’s right. My brother has been to Disneyland Paris and told me he had a lot of fun there, but it was very different just culturally. And you know, this is where we’re talking about. They brought Disney land, a complete replica almost to Tokyo and it’s successful. That’s what they wanted. They asked for it and they actually came back later with more money and they wanted Disney sea, which is a completely different park. Which is another must have, is if you are a Disney fan. And so when it came to Paris, they wanted to make Disneyland Paris and they tried to do the same thing, leveraging everything they already had. And, you know, they did try to take into account like the perception and the feel of the area by focal pointing, like what they thought people would like, but they also tried to make it more European by choosing like sleeping beauties castle and having, you know, decorative artists working on the mosaics, you know, making it in glass. Yeah. Making it more European feeling. But I don’t think that they did that enough. And so the, in the Imagineering story, you can find out more, but they basically spent a lot of money and it took a very long time to recoup their investment and Disneyland Paris, because it just was one of those situations where they tried to go off the formula they had and did not adapt it for the audience that was there. In a way that made sense.

Yasmine (12:53):
And one key point that VIN CEO, Michael Eisner had said was that they tried to price it in accordance to what Americans would have paid for the Disney land Disney world experience in the States. But the European audience, they had a different sort of perspective and approach and willingness to pay. So they struggled with having their hotels at 60% capacity, which like unheard of in Orlando. We, again, trying to book our Disney trip in March, we booked at what was it like three months in advance. And we struggled to find like a good room. Obviously

Nicole (13:27):
We had to change our dates. And they said that he didn’t have the dates at the hotel. We were at like two days after we booked. Yeah. He told us that they couldn’t change our dates for us. So we had to choose a different hotel, which works out in the end. But yeah.

Yasmine (13:42):
Yeah. So 60% capacity is just like insane. In fact, Disneyland Paris was on the point of like bankruptcy at one point now they changed it around and maybe we’ll get into the story in a future episode. But what it shows is that you really, really, really, really need to know your audience before you make like a big investment because going in sort of thinking, well, this is how we’ve always done it. We’ve all, we’ve all seen that quote. Right.

Nicole (14:14):
Like don’t reinvent the wheel and you know, I mean, it worked in Japan, right. So they could duplicate it, but that’s what they were asked for. So it’s always like keeping in mind what you’re asked for. So yes, you can do innovation from the standpoint of like, what do I already have? I’ve got a food and wine festival, I’ve got a flower festival. Let me make an art festival. You know, they pilot tested that on a small scale the first time. And then they made it bigger. So if you are taking something you already have, like, let’s say you have a course or even like a t-shirt or something. And it works just duplicating. It might not work if you don’t do that step of saying, what are they asking for?

Yasmine (14:57):
So how do you find out like what your audience like truly wants? Like, obviously you can ask the question, right. A great way to do this is sort of pull the curtains and show things that are happening behind the scenes, engage your customer response. Are you designing a new shirt or like a new set of mini ears, sneak, peek it, where at yourself, like create a prototype, so to speak and see what people say. And if they’re like, I want that, let me give you my ID, which you know, guilty have done. Then you know, that that’s something that you have enough of an audience for, and it’s something that they’ll actually buy from you. So don’t hesitate to share what you’re working on for fear that it’s going to be copied. I know that that’s something that we hear a lot from our clients.

Yasmine (15:41):
They want to keep sort of something that they see as like new and innovating as a secret. And they want to work on it behind the scenes and then have this like big grand launch. And, you know, that works. That’s definitely a strategy that you can take, but I often find that when you tease something and sneak peak, it, it builds audience anticipation. So you go from all of a sudden being like, Hey, I built this thing, come by it to having literally raving fans, you know, counting down their calendar for your launch to happen and being willing to like buy right then and there, because you’ve basically nurtured them along the process compare to doing a big launch and then starting out from scratch.

Nicole (16:21):
Yeah. Just listening to what they’re saying as you’re sharing those things and what’s happening along the way. So, you know, Disney learning from their mistakes with Disneyland Paris, they then took this like 20 year project to open Shanghai, Disney and China. And so knowing that this was a new market and it was very much like Disneyland Paris, where they really needed to listen to the culture and the people where they were building this place, they set out to make something that was authentically Disney and distinctly Chinese to quote Bob Iger. And so that’s what they set out to do. And it’s been a great success because you go there and you know, that this is, this is their Disney, you know, this is part of their culture. It very much took into account like how they view the world. You know, the haunted mansion ride wouldn’t work in a place like China because they just have different views on the afterlife.

Nicole (17:11):
And so it’s fancy manner. They’re right, right. Yeah. So, you know, that’s the type of thing that we’re talking about here. Like, it doesn’t mean that you can’t reuse things, but listen to your audience, tease what you’re working on, get their feedback along the way. And you’ll be able to innovate, even if it doesn’t feel like innovation because you’re kind of making the same product you already had. You know, the ride that Yasmin was just mentioning was the haunted mansion ride re envisioned with this distinctly Chinese feel. And so that was innovation. They it’s, they took a shell of something we had started with, you know, took in the feedback and the culture around them and came up with this new concept. So you don’t always have to do a big innovation. It can be something small too. It can be just, you know, looking at what people are saying about a certain product you have and updating your product description page or something like that. Like that’s still innovation. It might not be the level of Apple inventing the smartphone, but it’s still innovation for you and your business. It’s moving you into a different, different segment or different place,

Yasmine (18:17):
You know, using Apple as an example, when you think of like every subsequent iPhone, it’s not a massive overhaul of the previous one, it’s incremental changes, right? Like, you know, they, they get you in with like a new camera, right. Or Alyssa slightly correct.

Nicole (18:31):
If we actually need like in LA, like I’m not a photographer. So I don’t even know if I need that new camera. But I just, I just think back to those days where we had the like flip phones that couldn’t even take pictures, or my mom had a digital camera, like we got our one for her birthday, we all like chipped in and got her a digital camera. Six, seven years later, she brought it with us on a Disney trip to take pictures. And I was like, mom, you have an iPhone and that’s better.

Yasmine (18:59):
So, so incremental changes are okay. And like don’t ever hesitate to close something down for a short period of time to improve it. So just like going back to Disney, improving rides and refurbishing things, for example, like are furbished their hotel rooms on a regular basis. They have a schedule to update the rooms to make sure that they’re, you know, constantly new and, you know, provide like a nice, clean, exciting experience. But they do that with riots as well. They’ll occasionally close them down for awhile,

Nicole (19:27):
Meant to do it. Like when you’re doing it, like try to think about like, when’s my slowest season, you know? Sometimes we tend to go into a slow season and we have a previous episode all about like planning for those slow seasons. But and you just kind of like, Oh, I need to rest. But really it’s a time to think about like the things in your business that maybe could impact customers, but won’t because you’re doing it at a time of year that the risk is lower. So for example, every winter they alternate the two water parks at Walt Disney world for refurbishment. So blizzard beach and typhoon, the goon one will be closed. The other will be open. Not a lot of people are going to water parks, even I’m in Florida, in December and January. And so that’s how they kind of handle that.

Nicole (20:06):
There’s one more thing I wanted to mention too. And it was like not being afraid to change something that’s like a conic or traditional and Yasmin and I were talking about this a little bit before we got onto record and Disney just announced that they are going to be repainting Cinderella’s castle at Walt Disney World. And it’s supposed to match the Disneyland one a little bit more. I’m not a Disney traditionalist, so I love that they innovate and they’re constantly changing things, but when they changed something like the castle, there is definitely feedback and backlash on it. I’m not sure that the concept rendering is what I but I love it. There it’s like pink on top gray on bottom. Like I’m sure it’ll lovely. Yeah. But you know, we were talking about this, like they’re not afraid to go ahead and change something that’s so iconic and that’s in the background of how many pictures.

Nicole (20:58):
Right. And he made, this is probably leading up to their big anniversary. That’s coming up soon. But then we started talking about, if you have followed Disney for a while, or maybe you went when you were a kid, I never was there during this period of time, but for their 25th anniversary of Walt Disney world covered Cinderella’s castle with like pink frosting and made it look like a ginormous birthday cake. And I think Disney was going through a little bit of identity crisis when they chose, chose that back in. I think it was 96 or 92 somewhere around there. But yeah, they are not afraid to change it cause they know they can put it back to the way it was. But just, don’t be afraid to experiment with something that might even be your like signature product, because there could be something there. And it could just like teach people to love the old version, like, Oh, I have the original. And then, you know, you felt like limited additions come out of the same product essentially. So just, don’t be scared to take a risk here and there with what you’re working on

Yasmine (22:02):
Right on. So there’s so much more that we could talk about when it comes to innovation and like investing in your business. Right. Nicole, in fact, yeah.

Nicole (22:09):
Especially investing. I mean, we have tools for that.

Yasmine (22:14):
And when we were planning this episode and actually wrote down like all of the business lessons, it was longer than the intro. Which sometimes like that happens when we talk about like one specific point, but we had like way more points to cover. So

Nicole (22:30):
We saw, I couldn’t decide what to give for a bonus. Like we were like, did we talk about the mindset of investing? Do we talk about like the financial planning, like the budgeting side of it, like which piece of investing in innovation should we really highlight?

Yasmine (22:44):
And then we thought, well, why not create a workshop around it? Right. And give this topic the time that it deserves. So this week, instead of having a typical bonus for you, we have a workshop experience where you can sit down with Nicole and I, and we will go through how you can apply lessons and innovation, investing to your business. We break down everything from changing your mindset around innovation, really identifying what innovation means to your unique individual business and looking at how investment works when to invest in your business when not to how much to invest. And we’ve also provided several tools and planning sheets that will help you make these decisions a lot easier.

Nicole (23:27):
Yeah. So if you’re not ready to invest in innovate on a big scale right now, it includes things to like help you get started. So that way, when you are maybe a year from now, maybe it’s six months from now that you’ve got a budget available to you to invest with, or you have an idea of what you could be investing in. And so there’s a lot of tools here that will help you discover, like what type of innovation you should be working toward and like just ideas of different projects that could fall under each area. So there’s a lot of resources there for you. Even if you feel like you’re in a position where I don’t have investing money right now, I’m just starting out. It’s really meant for you. So that way you can think about this approach to your business before you get to the point where you just need to invest today.

Yasmine (24:17):
So this experience actually includes the templates that we use with clients in our own business. And we’re bringing them to you. We’re packing in basically years and years of experience and knowledge and lessons and strategies that are, have been tried and true and worked across the multiple businesses that Nicole and I have worked on for only $29, which we feel like,

Nicole (24:39):
And it’s fun because it’s pixie justified. And it’s using examples that I think work for a small business. When you, when you get into these like business books and they’re talking about these huge concepts, it’s really sometimes just too much, you know, how we love to simplify and make things just easy for you to implement. And that’s exactly what you’re going to get here.

Yasmine (25:00):
So when we calculated like the full value of everything that we’re offering, it came out to a couple hundred dollars. But we thought that that might be a little bit much for our first workshop. So $29 gets you insight into, yeah,

Nicole (25:12):
We want you to invest in your business and we want you to do it with smart strategies. And we want you to know exactly how to invest in your business. So that way you don’t get into a situation where you’ve bought all the things, but things you don’t need or spent too much time on something you shouldn’t have been spending time on. And so that’s why we want to make this very affordable and very accessible for you because we’ve come into too many businesses over the years or talk to business owners when we’re at a speaking engagement and they’ve just, they’ve gotten in over their head and they don’t know what to work on next because they went in early on just trying to do everything everywhere and basically invest in what everyone told them that they need. And so that’s why we want to make this successful for you, because we don’t want you to be in that situation. We want you to be thriving. We want you to be profitable, and we want you to know exactly how your business works and what you should be spending your money on.

Yasmine (26:08):
Awesome. So definitely check out our show notes for a link to how you can purchase this workshop.

Nicole (26:13):
You can go to pixiedustandprofits.com/innovate, and you’ll find it there. And yeah, send us a DM on Instagram. We’ve been really loving all of the comments about how you’ve been absorbing these episodes until next week. We’ll see you real soon.

Yasmine (26:29):
Nice.

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