section_path: Career/Early career: 1920–1928
section_name: Early career: 1920–1928
paragraph_text: Early career: 1920–1928
  
  In January 1920, as Pesmen-Rubin's revenue declined after Christmas, Disney, aged 18, and Iwerks were laid off. They started their own business, the short-lived Iwerks-Disney Commercial Artists. Failing to attract many customers, Disney and Iwerks agreed that Disney should leave temporarily to earn money at the Kansas City Film Ad Company, run by A. V. Cauger; the following month Iwerks, who was not able to run their business alone, also joined. The company produced commercials using the cutout animation technique. Disney became interested in animation, although he preferred drawn cartoons such as Mutt and Jeff and Max Fleischer 's Out of the Inkwell. With the assistance of a borrowed book on animation and a camera, he began experimenting at home. He came to the conclusion that cel animation was more promising than the cutout method. Unable to persuade Cauger to try cel animation at the company, Disney opened a new business with a co-worker from the Film Ad Co, Fred Harman. Their main client was the local Newman Theater, and the short cartoons they produced were sold as "Newman's Laugh-O-Grams". Disney studied Paul Terry's Aesop's Fables as a model, and the first six "Laugh-O-Grams" were modernized fairy tales.
  
  In May 1921, the success of the "Laugh-O-Grams" led to the establishment of Laugh-O-Gram Studio, for which he hired more animators, including Fred Harman's brother Hugh, Rudolf Ising and Iwerks. The Laugh-O-Grams cartoons did not provide enough income to keep the company solvent, so Disney started production of Alice's Wonderland — based on Alice's Adventures in Wonderland — which combined live action with animation; he cast Virginia Davis in the title role. The result, a 12½-minute, one-reel film, was completed too late to save Laugh-O-Gram Studio, which went into bankruptcy in 1923.
  
  Disney moved to Hollywood in July 1923 at 21 years old. Although New York was the center of the cartoon industry, he was attracted to Los Angeles because his brother Roy was convalescing from tuberculosis there, and he hoped to become a live-action film director. Disney's efforts to sell Alice's Wonderland were in vain until he heard from New York film distributor Margaret J. Winkler. She was losing the rights to both the Out of the Inkwell and Felix the Cat cartoons, and needed a new series. In October, they signed a contract for six Alice comedies, with an option for two further series of six episodes each. Disney and his brother Roy formed the Disney Brothers Studio — which later became The Walt Disney Company — to produce the films; they persuaded Davis and her family to relocate to Hollywood to continue production, with Davis on contract at $100 a month. In July 1924, Disney also hired Iwerks, persuading him to relocate to Hollywood from Kansas City. In 1926, the first official Walt Disney Studio was established at 2725 Hyperion Avenue; the building was demolished in 1940.
  
  By 1926, Winkler's role in the distribution of the Alice series had been handed over to her husband, the film producer Charles Mintz, although the relationship between him and Disney was sometimes strained. The series ran until July 1927, by which time Disney had begun to tire of it and wanted to move away from the mixed format to all animation. After Mintz requested new material to distribute through Universal Pictures, Disney and Iwerks created Oswald the Lucky Rabbit, a character Disney wanted to be "peppy, alert, saucy and venturesome, keeping him also neat and trim".
  
  In February 1928, Disney hoped to negotiate a larger fee for producing the Oswald series, but found Mintz wanting to reduce the payments. Mintz had also persuaded many of the artists involved to work directly for him, including Harman, Ising, Carman Maxwell and Friz Freleng. Disney also found out that Universal owned the intellectual property rights to Oswald. Mintz threatened to start his own studio and produce the series himself if Disney refused to accept the reductions. Disney declined Mintz's ultimatum and lost most of his animation staff, except Iwerks, who chose to remain with him.