Summary
Overview
This Planet Money episode explores the spectacular failure of General Magic, a company that created a smartphone-like device in the early 1990s—nearly two decades before the iPhone. Despite having unlimited resources, the most talented engineers in Silicon Valley, and backing from tech giants, the company failed spectacularly. The episode examines how having too much freedom, money, and talent actually hindered innovation, and how the lessons learned from this failure helped shape successful products like the iPod and iPhone.
The Genesis of General Magic
Tony Fadell, a self-described computer geek who made fake IDs in high school, became obsessed with joining General Magic after learning his heroes from the original Mac team were working on a secret project. After months of persistent calls, he landed a job at age 21 as employee number 29. The company was creating the impossible: a device that could make calls, send faxes, buy things, navigate, and play games—all from your palm, before the internet, Wi-Fi, or even email existed for most people.
- Tony Fadell made fake IDs on laser printers in high school and was always tinkering with computers
- He became obsessed with the original Mac team after reading about them in Rolling Stone magazine at age 15
- Tony called General Magic 10-15 times a day for six to seven months before getting hired
- General Magic was creating a smartphone with calling, faxing, shopping, navigation, and gaming capabilities in 1991
" If a human made it, a human can fix it and build other things too. "
" 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! "
" I had no idea what they were doing, but whatever it is, I needed to get involved. "
Building the Impossible in the Early 1990s
General Magic was essentially creating everything that would later become the iPhone—operating systems, chips, devices, network servers, touchscreens, and even USB technology. The company attracted rock star engineers who worked around the clock in what felt like a massive dorm room. With massive funding from tech giants like Sony, Motorola, AT&T, and Mitsubishi, the team had unlimited resources to experiment and innovate, creating a playground for the smartest geeks in Silicon Valley.
- General Magic created operating systems, chips, devices, network servers, touchscreens, and applications all in-house
- The company hired an in-house film crew to document their work
- Engineers worked around the clock, sleeping at the office which smelled like a dorm room with dirty clothes hanging on cubicle walls
- Funding came from tech giants and meetings required antitrust lawyers to list forbidden discussion topics
" 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 and network server software, all the user interface, all the applications. We were creating the touchscreen. We were creating everything in this little company. "
" It was the biggest sandbox playing with the smartest, coolest geeks. "
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