We almost had a smartphone in the 90s. Why did it fail?
Planet Money
General Magic, a visionary 1990s startup, built the first smartphone years before the iPhone—but failed due to lack of constraints, unclear customer focus, and excessive resources. Despite having top talent and funding, the company couldn’t ship a viable product. The episode explores how too much freedom can stifle innovation, using the story to highlight the power of constraints in driving creati
Key takeaways
- Too much freedom leads to incoherence
- Clear customer focus is essential
- Deadlines drive execution
Transcript preview
This is planet money from NPR. Okay, how many times have you sat and thought about how much more you could accomplish if you had more, more time, more money, more resources? Like how good your project could be if you had just one more day? Or a bigger budget or more help? Well, this is the story of a company that did have all of that. And they were making something amazing, something most of us touch every day. Or, a smartphone. But, and this is the part that is bonkers, this was happening nearly two decades before the iPhone came out. Before the internet, before Wi-Fi, before mobile data, before cell phones even. Tony Fadell was employee number 29 at that company. Before even email really existed for people. Before anything like Amazon or e-tailing existed. Before, downloadable music existed. All of that stuff. We were creating all the technology that would later become what the iPhone was. Nowadays, Tony is a businessman. He's always been a computer geek. His words, not ours. I was making fake IDs on a Mac in high school because you had a laser printer. And a laser printer was like, oh my God, I could replicate things in the world. So I was making fake IDs on laser printers. You must have been very popular. Oh yeah, I made a lot of money, too. things. I was fixing things. I was changing electrical sockets. You're describing yourself as kind of being like a shop class kind of kid. Yeah, my grandfather taught shot class. Oh, seriously, a shop class kid. Okay. He always had the mantra. If a human made it, a human can fix it and build other things too. Tony's favorite thing to tinker with was computers. It was your own world. You could make anything you wanted. And around the time Tony was in high school, mid-80s. to become cool. And Rolling Stone, there was a huge article by Stephen Levy about the original Mac team. And I was like, oh my God, there's computer guys like me, guys and gals like me, building this thing that I love the Macintosh, and they're in a rock and roll magazine. I'm like, superstars. He's 15 and he became obsessed with these computer engineers. Oh, I could be like that. So they were my heroes. And so I would just track them, talking he could say. Tony went to college, launched a few startups, and he kept reading tech magazines. And then one day he saw something buried in the gossipy type pages in the back of one of those magazines. Tony learned his heroes were working on this top secret project. It was at a brand new company called General Magic. And I was like, General Magic, what? What is this? And he didn't care how he just wanted in. I had no idea what they were doing. but whatever it is I needed to get involved. He found a number, started calling sometimes 10, 15 times a day. This is your favorite band, you're like, I want to get on the road with the band. Yeah, I'll be a roadie, whatever it takes, I just want to be with this band. So after, you know, a six to seven month knocking on the door, getting rejected and pestering the hell out of everyone there, they gave me a job and I went crazy. Tony moved to Silicon Valley to work with his heroes. He was 21, he was 21, as a software engineer in the hardware team at General Magic to make the first smartphone this thing that was going to change the world in 1991. Hello and welcome to Planet Money, I'm Erica Barris and I'm Emma Peasley. General Magic had everything. The vision, the talent, the money, but having everything might have been its undoing. Today on the show, with a push to create the first smartphone can teach us about how genius ideas idea. come to life or don't. creating this ultimate portable interconnectivity device where from your palm you'd call people send them faxes you'd be able to buy things on it book travel navigate yourself around play games and none of this existed Tony was part of the team that was building all of it we were creating the entire operating system we were creating all the chips we were creating the devices we were creating all the network servers we were creating software, all the user interface, all the applications, we were creating... That is a lot! We were creating the touch screen, we are creating everything in this little company, all of it at this company. Research, development, and engineering were all happening at once, and they had the talent to do it. General Magic was started by those rock stars and they handpicked other budding rock stars to work there too. It was so exciting, General Magic even hired an in-house film crew. Oh, smile, you're on candid camera. That ended up making a documentary about the company. So we've seen footage of younger long-haired Tony hunched over a small screen with a bunch of wires connected to a keyboard. I'm hooking up a demo so that we can see keyboards working with the device. He's building an early version of the USB. It's important. If you want to hook up disc drives and things of that nature, yeah. It's really important. and you can figure out where you are whether you're touching tea or whether you're touching a capsule. How small will it finally be do you think? Someday, Dick Tracy Rischwatch. And the money was there to fuel all these experiments. The company's investors included all these telecom and electronics giants like Apple and AT&T and Motorola and Sony and Panasonic to name a few. They literally threw many, many millions of dollars at this silicon. Valley startup because they all wanted a piece of what could potentially be the next big thing. People from those companies would sometimes come visit. They were just like Mesbro, I was like, what is this your building? They had no reference point because it was so different than anything they had seen. So they're like, whoever these people are, they're really geniuses, it's really cool. I don't understand it, but we'll just keep them going because it's clear they think they know what they're doing. The employees called themselves magicians and there was even a bunny Bunny named Bowser because of course magicians need a rabbit and the magicians worked endlessly. Just people programming whatever at all times of the day and night doing things and say come over here and check this out. People would be sleeping there overnight. We were there so often the place smelled. You know people would hang up their dirty clothes on the cubicle walls. Oh gosh. It was like a huge dorm room. Smell like one. And their job was just to come up with a ideas and try everything. And their bosses encouraged that. I'm like, hey, I'm thinking