How epic failure changed the world

Heard of Steve Jobs? Bill Gates? Steve Wozniak? Marc Porat? Likely not the last on the list but that’s about to change.

On a 2016 trip to Silicon Valley with a group of 12 female entrepreneurs, I sat next to Brit, Sarah Kerruish. She told me about a side project she was working on. Having left the Isle of Man in the late 80s to take up a place at an American university, she scored her first job at a now failed startup called General Magic.

General magic is a story about how great vision, astounding perseverance and epic failure changed the world

More than thirty years later, she was gathering footage about this company that none of us had heard of to make a full-length documentary about a fascinating but cautionary business tale. 

Fast forward to 2020 and despite being number one on iTunes (with zero marketing budget), despite the film winning Tribeca and a host of other major film festivals and despite Forbesdescribing the company as “The most important dead company in Silicon Valley” …. odds are you haven’t heard of it yet.

What’s all the fuss about?

General Magic is a story about how great vision, astounding perseverance and epic failure changed the world as we now know it – from the smartphones that sit in our pockets to an array of technologies we now take for granted today. Many of the ideas that now dominate the tech industry and our day-to-day lives were born in 1989 at this Silicon Valley start-up just outside of San Francisco, believe it or not. 

The first smartphones; social media; e-commerce; touch screen; USB; even the beloved emoji. They all stem from this one company. And this was before the internet, before 3G, beforeGoogle, before most people had mobile phones. 

Did you know that 98 percent of the world’s smartphone market can be traced back to two people who sat no more than 10 feet apart at General Magic? That’s Tony Fadell (iPod, iPhone and founder of NEST) and Andy Rubin (Android, so called because Andy loves robots aka droids, in case you were wondering).

So too in that office sat the original Macintosh engineer Andy Hertzfeld, Apple’s first head of marketing Joanna Hoffman (played by Kate Winslet in the Steve Jobs movie), Kevin Lynch aka the man behind the Apple Watch, the former CTO of the USA, Megan Smith, and Curtis Sasaki now head of product and innovation at Samsung – and a host of names who went on to great success and today are considered some of the best and brightest minds in business.

Watching footage of Marc Porat on screen, their visionary CEO, describe how we’d all one day be holding small devices which would combine a phone, fax and personal computer was mesmerizing – and predicting that one day it would all be available on a watch too, was surreal. He knew exactly what was coming. Here was a man who saw the future and led a team who came within a hair’s breadth of changing it at the time – and carved the path for the phones we all live and die by today. 

So why did it fail and what can we learn?

The film is a master class in the importance of ensuring diverse thinking at the table, the part timing can play, managing egos, understanding the market you are serving and how learning from your mistakes is the best training. It’s a lesson for everyone building a product, a team or a business. But the film’s success is proof that it’s a lesson for life; how epic failure can be a precursor to your greatest success.

The company floated in 1995 and the stock spectacularly soared then rapidly nosedived. General Magic had an extraordinary team, the best of the best from the Apple of the 80s and 90s who knew what was coming but were ahead of their time. But was that the only reason it failed? 

Timing played a part in that the world was not ready to hold the world in its hands when their handheld intelligent phone launched in the mid-90s. They spent too much time making a product with too many features. Too complex and expensive for the consumer, they had not considered whether the public was ready for so much change so fast.

Remember the iPod and how a new version came out every year? The first version was basic with barely any storage capacity in 2001, then came a touch sensitive wheel in the next version, a coloured screen in the next version. There was the shuffle, the mini, the classic and the touch. After the failure of General Magic, Tony Fadell knew that the key to success was getting a product to market fast and iterating – and the rest is history. Apple sold 400 million iPods.

Fierce competition and heartbreaking betrayal dominated behind the scenes too. There was an unhealthy hubris under their roof. The Magicians had an utter conviction that they were right about their uncompromising vision, by virtue of the fact that they had such an exceptional team.

The lessons learnt at general magic were instrumental in the creation of the iPod, iPhone, Android and eBay

And whilst the team was remarkably diverse compared to today’s world of business and technology, respect for differing opinions was the Achilles heel of General Magic. For example, they ignored the intern who said ”hey everybody, the internet is coming.” They dismissed the developer who came up with the idea of an online auction (Pierre Omidyar actually started eBay while working at General Magic). What if they had listened to more diverse voices or pivoted towards the internet? Would it have succeeded?

Food for thought

Many of us read books, keep abreast of industry thought leadership, skim newspapers, attend conferences, listen to podcasts and generally try to learn from lessons of the past and present to help our collective personal and professional futures. We are interested in innovation, disruption, technology and how the future will be shaped. 

Watch the film. Show it at work events. Watch it with your family or friends. There aren’t many films that have a vein of business threading through their story. Wall Street and Working Girl are two of my favourites but they’re fiction – and 30 years old! General Magic is a timeless and true story of how easy it is to fail. It is the lesson that without diverse voices at the table, the best and brightest talent doesn’t necessary equate to success. 

But equally important is that while some never recovered from the failure that accompanied its downfall and bankruptcy, others went on to soar. The lessons learnt at General Magic were instrumental in the creation of the iPod, iPhone, Android, eBay, even in the corridors of President Obama’s White House. And although General Magic died, those concepts and the people who worked there went on to change how the world connects today.

The documentary tracks the progress of anytime, anywhere communication from a thing of science fiction to our modern-day reality. It’s quite incredible what has happened in thirty short years and a reminder that ordinary people can do extraordinary things when they work together.