In 1938, Fred Morrison and his girlfriend were playing catch with a cake pan on the beach near New Haven, Connecticut, when an onlooker offered to buy the disk for a quarter. Morrison started a small business selling the tins on the beach, but World War II interceded and he wound up in the Air Force, where at least he learned something about aerodynamics.
He was fascinated with the concept of the flying disk, and teamed up with a backer, Warren Franscioni, to develop various prototypes to capitalize on the flying saucer craze. None of these efforts really went anywhere and he and Franscioni parted ways.
By 1954, Morrison was making and selling something he called the Pluto-Platter, and his first breakthrough came in 1957 when he sold the marketing rights to the Wham-O company, a company responsible for various novelty items ranging from the Hula-Hoop to the as-yet-uninvented Super Ball. At that time Wham-O had one product, a wooden slingshot - hence the company's name, supposedly the sound made when the toy's projectiles hit a target.
Wham-O immediately changed the name of the flying disk to "Frisbee," which came from the Frisbie Pie Company, which supplied pies to Yale University. Students started tossing the tins, stamped with the company name, around campus. Wham-O also worked on the design of the disk, so it could be thrown faster and with more accuracy.
Sales exploded, and the toy was adapted for various sports including Frisbee golf and Ultimate Frisbee. Two hundred million Frisbees have been sold since 1957 and Wham-O paid Fred Morrison over two million dollars in royalties before his death in 2010, aged ninety.