More than a decade before Apple’s (AAPL) first iPhone arrived in 2007, a band of Apple engineers set out to build a pocketable computer with a vivid user interface that would be almost always connected. Their efforts crumbled but were not totally in vain because they arguably set the stage for the mobile-computing revolution.
“General Magic” is a remarkable documentary movie of the computer company of the same name, founded in 1990.
I had the pleasure of viewing the film in a private screening for press the other day, the guest of honor being General Magic’s chief counsel at the time, Michael Stern, who is the film’s executive producer.
Following a premiere at the Tribeca Film Festival in the spring, a screening is planned for July 26 at the California theater in San Jose, Calif.
It’s sure to please the local crowd: This movie is as good as it gets for telling the startup saga, seen through tons of footage from those days. Writer, director, and producer Sarah Kerruish was in the offices of General Magic back then to film what was supposed to be promotional material of the then white-hot startup. She captured vivid vignettes of dedicated staff sweating every technical detail and sleeping at the office to try to get it done.
It is gripping material, deftly edited by Claire Ferguson and Anna Mellor, as it moves swiftly and surely through the incidents of the story, and backward and forward between archival material and contemporary interviews. The 90-minute runtime does not drag.
General Magic is a cautionary tale for tech investors: it was a spin-off from Apple, with a gold-plated management team that included legendary software developers Andy Hertzfeld and Bill Atkinson of the original Macintosh team, and Marc Porat, another Apple exec who in the 1990s was a tech icon of Steve Jobs‘ caliber.
The founders’ credibility led to the first “concept IPO,” with no revenue and a lot of losses but also incredible buzz, in February 1995. A Goldman Sachs banker captured on film eagerly strips off his clothes in a meeting with management, as a show of fealty to win the banking business.
General Magic raised $96 million in that IPO, and a total of $200 million with investments by sixteen strategic partners, which nowadays seems a pittance.
Porat started with sketches of something that looks remarkably like a modern smartphone, a sleek gadget you could slip into a pocket that had groovy icons and did all kinds of neat things for the time, like letting you send email.
But just about every calamity hit General Magic: It was before its time in the sense that the thing the company was building didn’t have the electronic components to make it run smoothly. Ubiquitous network connectivity was years away. General Magic fell into the trap of partnering with big companies such as Sony (SNE) and Motorola and AT&T (T) that threw the startup all over the mat, demanding unreasonable ship dates.
Above all, the quest was quixotic in focusing on a mobile-computing device at a time when most people were happy to surf the still-novel World Wide Web from their perfectly capable home PCs. This was long before anyone could conceive of the entire population staring fixedly into a handheld device while walking into traffic.
Those of us who remember using the “Magic Link” portable computer, a chunky brick of an object with a black and white screen, can only shake our heads. I had one. I also had a Motorola “Envoy,” the version that came with a whip antenna for wireless internet access. The devices were clunky, they were slow, they had terrible battery life.
And anyway, who wants a portable device that still requires you to go hunting for a phone jack?
The concept was clearly worthwhile but the product was trying to run before it could even crawl, as acknowledged by the various executives interviewed for the piece.
The totality of the company’s errant mission is nicely summed up by Kara Swisher in the film: “It was like inventing the TV in the 1880s.”
Worse, the youngest engineers told them they were so busy building the next great object of lust after the Mac that they were missing the real revolution, the consumer Internet. A young customer service engineer named Pierre Omidyar had a fledgling side project, an auction site called eBay (EBAY), which the General Magic crew generally scoffed at as being nonsensical.
Within two quarters of the IPO, Porat and company were realizing initial sales would add up to fewer than 3,000 units. To twist the knife, Stern, the chief counsel, could recognize friends and family members’ names in those initial purchases.
“We don’t have a business here, we are not going to make it,” Stern realized.
“What am I going to tell Goldman?” was a dread that came over him.
“It was a massive disaster,” he reflects, “I felt sick.”
The company filed for bankruptcy in 2002.
Employees wiped the company name from their resumes when they looked for their next job. Maketing guru Joanna Hoffman, an Apple star, never joined another tech startup. Porat saw his company and his marriage fall apart in the same year; the film is the first time he has tried to explain to his children the torment of those days.
“I felt a profound feeling of humiliation, of shame,” says Porat in a contemporary interview. “I brought everyone along and then couldn’t deliver.”
To be fair, those were the times, a period of premature infatuation by techies with all things mobile computing. Before General Magic, there was the failure of GRID Computing. And there was Apple’s own flop, the Newton.
And yet others had success with more modest attempts, such as Palm Computing.
One young General Magic employee, Tony Fadell, would go on to work with Steve Jobs to invent the iPod and the iPhone. It’s testimony to how revolutions in tech can involve so many factors beyond just brilliance and vision, things such as rigorous focus, well-defined goals of reasonable scope, numerous existing technologies in place, and the kind of easy funding available in current capital markets.
All of which you could sum up as timing, timing, timing.
As futurist Paul Saffo puts it in the film, being a tech startup is a bit like being a surfer. You may see the wave coming before many others, but “if you start paddling too early, the wave will slide right under you and leave you behind.”