Former Apple CEO John Scully calls General Magic “the most important company to come out of Silicon Valley that no one has ever heard of.” An eponymous new documentary about the company, five years in the making, “General Magic”, last month at the Tribeca Film Festival. The film, directed by Matthew Maude and Sarah Kerruish, is poignant, entertaining and full of life lessons from the small and personal to the universal. Lessons that should be appreciated by everyone, especially those on the cutting edge of technology today.
Apple computer designers Bill Atkinson (R) & Andy Hertzfeld (L), w. communications technology specialist Marc Porat © re their new company General Magic. (Photo by John Harding/The LIFE Images Collection/Getty Images)
The twin poles of the movie’s story revolve around the recollections of its charismatic former CEO, Marc Porat, and a junior engineer, Tony Fadell, who went on to lead the team at Apple that created the iPod and the iPhone. Later, he founded Nest, which Google purchased for a 3.2 billion dollars in 2014.
Concept drawings for the first smartphone, The General Magic Communicator. 1990.
Following Steve Jobs’ exit from Apple in 1985, Porat found himself wondering “what comes after the personal computer?” His concept for the smartphone was visionary, and more than a decade ahead of its time. In 1990, Porat convinced Scully to spin out a team and form a new company to invent it. When Fadell, then a kid in Detroit with big dreams, heard about this vision, and the all-star team of Apple engineers Porat had assembled, he knew he had to be part of it. He literally camped out at General Magic and badgered his way into the company by sheer force of will. There, sitting next to Andy Rubin, who created the Android operating system, he had a front-row seat to history.
Matt Maude & Sarah Kerruish, Directors of “General Magic”.
In 1993, the company, thinking it was on its way to world domination, commissioned Kerriush to chronicle their rocket ride to stardom.”The idea of a computer in your pocket is a really big idea,” says pioneering tech journalist Kara Swisher. “The idea of a mobile computer was started at General Magic.” Kerriush, who met her husband in the lobby of General Magic while shooting the original aborted film, is now a tech executive herself. She told me she was motivated to make the film by the death of a mentor from her General Magic days, Zarko Draganic, to whom the film is dedicated.
After General Magic tragically fizzled, the footage sat untouched for two decades until Kerriush, with the encouragement of Michael Stern, the former General Counsel of General Magic (and one of the film’s producers), partnered with Maude and began to craft a cautionary tale out of this forgotten footage, which is supplemented by recent interviews. It was clearly cathartic for Porat who by his own admission was deeply changed by the experience. “It’s the kind of thing that stays with you for life,” he told me this morning, admitting it took him decades to get over the company’s failure. For Fadell, it was the greatest training by the greatest people a young engineer could possibly hope for. “These people were my heroes,” he says in the film.
PARIS, FRANCE — JUNE 16: Tony Fadell Inventor of the iPod and Founder and former CEO of Nest attends a conference during Viva Technology at Parc des Expositions Porte de Versailles on June 16, 2017 in Paris, France. Viva Technology is a fair that brings together, for the second year, major groups and startups around all the themes of innovation. (Photo by Christophe Morin/IP3/Getty Images)
The film begins with a reflection by Tom Hershenson, who muses in voiceover, “The reason you should care about the story of General Magic is that it involves something fundamental and that is: Failure isn’t the end, failure is actually the beginning… Did it fail? I mean, the company itself failed. The ideas didn’t fail. The people who worked there didn’t fail. So was it a failure?”
With backing from Apple, and Porat’s expansive vision, General Magic attracted partners who could make the dream a reality: the world’s leading chip manufacturer, Motorola, the world’s leading consumer electronics company, Sony, and telecommunications giants like AT&T, NTT and Cable & Wireless. With these blue-chip investors, investment banking powerhouse Goldman Sachs was able to take the General Magic public. “The first concept IPO” raised over 45 million dollars, an astronomical sum in 1994. This was the company’s greatest triumph and its biggest mistake. Once it was public, the clock started ticking. At the same time, its fortunes were tied to five analog technology companies that themselves did not survive the Internet revolution intact.
Sony Magic Link. Only three thousand were sold, mostly to friends and family.
Technology succeeds when it takes what we are already doing and makes it better, faster and cheaper. General Magic’s problem was timing. People weren’t yet doing what they were trying to improve. Few had cell phones. Few had email. The consumer had not yet reached the point of needing always-on computing. They were three steps ahead, which led to their tumble down the hill from the most promising Silicon Valley startup to roadkill. There’s a saying in the Valley, “pioneers are the ones with arrows in their backs; settlers build cities next to their graves”.
As deadlines slipped and money burned, Fadell had a universal epiphany: his heroes were human. Things were spinning out of control, and no-one could do anything to stop it. The executive team was under extraordinary pressure from their partners and investors. “There was no questioning of ‘could I be wrong’. None. Because that’s what you need to break out of earth gravity,” said Porat. “You need an enormous amount of momentum and that momentum comes from suppressing introspection about the possibility of failure.”
Years ahead of its time, in 1995 General Magic’s Communicator never had a chance.
“We were too dazzled by what it could possibly do to realize we were biting off more than we could chew. I was still in creative mode, working on a flipping coin so the game room would have something in it. I was setting a bad example by doing stuff that was relatively frivolous when we needed to concentrate on the boring but necessary parts and it made me do some soul-searching. I was leading people astray in not having quite the right seriousness about our situation,” says lead engineer Andy Herzfeld in the latter part of the film.
Fadell says this taught him the importance of iteration, taking small steps, building version after version of a technology product, the way Apple went from the iPod to the iPhone, instead of making one single moonshot that could destroy everything. In the wake of Apple’s failed Newton (which led to Scully’s ouster), General Magic’s product never got much respect from the company’s partners, who were struggling with their own problems. As a result, they put no muscle behind the launch of the Magic Link Communicator, and when sales were less than magic, they dropped it, which quickly undid the company. “We sold less than three thousand units,” said Stern. “When I looked at the reports, I realized the buyers were all family and friends.”
Scenes from the new documentary feature “General Magic”
Timing in tech is often more important than ideas. It would be more than a decade before the world was ready for the smartphone. Cell phones were expensive and not commonplace in the analog world of 1995. The Blackberry had not yet been invented. Consumer online services like AOL, MSN and Compuserve were just building momentum, and people were just beginning to think they might need to have an expensive personal computer in their home. No one seemed to think they needed an always-on computer in their pocket to keep them connected no matter where they were or what they were doing. Swisher explained that “the idea of a computer in your pocket is a really big idea, but there was no use for it yet. There was no Internet.”
Out of the debris, General Magic’s all-star team of engineers and inventors soared to incredible success at companies like Google, Apple, Microsoft, Amazon, Samsung, eBay, Linkedin, and even the office of the President of the United States. This leads us back to the first of the film’s many poignant points: “Failure is not the end, it is the beginning.” For many, perhaps most of the characters in the film, this turned out to be true.
“One of my proudest, greatest reflections is that Andy Rubin and Tony Fadell, who between them are responsible for every single smartphone in the world, three billion devices, sat next to each other at General Magic,” Porat said as we concluded our call.