It was about this time that Walt, ever a technical innovator, began experimenting with combining live action and animation. He began work on a series of Alice In Wonderland cartoons that were years ahead of the current technology. Having tasted some small success in animation, Walt decided to move to Los Angeles and create his own animation studio. That studio was to be located in an uncle's garage.

Walt contacted film distributor M. J. Winkler, claiming that he was producing a series of novel cartoons. That series was the incomplete Alice In Wonderland cartoons that Walt had been developing for some time. Winkler took the bait and purchased several cartoons from Walt for about $1,500 each.

Excited by his new success, Walt teamed with his brother Roy and, in 1923, created the Disney Brothers Studio on borrowed money. The Disney Brothers had some success with the Alice cartoons, but as their popularity waned Walt and Roy came up with a new character, Oswald the Lucky Rabbit. Oswald achieved even higher popularity than Alice and Walt decided he was in a position to renegotiate the Oswald contract with Winkler and her husband, Charlie Mintz.