General Magic: Right Product, Wrong Time

Caemin (0:10)

Morning, folks, and welcome to today's episode. It's called General Magic, Right Product, Wrong Time. And I had heard about General Magic over the years. It was always held up as this almost mythical startup, the company that more or less developed the smartphone, but was years too early. And then just two weeks ago, I came across a documentary on it. The documentary is called General Magic, and it's really good. It's well worth watching. So I did a bit more digging, found great articles, additional interviews with the founders. And this is the story basically of how one guy had this vision for a new handheld device, how he got top talent from Apple to join him, how they got the biggest tech and telecom companies in the world to join them, how they were stabbed in the back by John Skulley, the Apple CEO, and how it all fell apart. This is a cracking story. Enjoy. Now, the story starts with a guy called Mark Porat. And Porat, he wasn't an engineer. He was an economist. He went to Stanford where in 1976 for his doctors, he wrote a dissertation called The Information Economy. So Porat is actually credited with coining the term information economy. Now, his argument was basically that America was moving into a new type of economy, where more and more people were starting to make a living by creating, processing, moving information around. And his dissertation got the attention of the US Department of Commerce. So he goes on to work there for a few years as a senior economist. Then he joins the Aspen Institute. This is basically a think tank where he works on how communications and new technologies are going to affect society. So this is a very, very smart guy who spends a huge amount of his time thinking about the future of technology. He goes on to make a documentary on PBS called The Information Society. He then moves into business. He sets up a satellite communications company that has revenues of more than $20 million by the time he sells it in 1988 So he's made some money. He's pretty comfortable. And then he gets approached by Apple in 1988, the year that he sold his company. They want him to join their Advanced Technology Group. Now, just to note, Steve Jobs is no longer at Apple by this stage. He'd been forced out in 1985 and John Skulley was the CEO. And I know that an awful lot of Apple fans, John Skulley is almost like this Darth Vader. I'm sure there's a lot more to him than that. But in fairness, he doesn't come out of this story looking very good either. And there's a whole story as well behind the whole how Jobs was ousted from Apple. But we're not going to get into that here. Now, Porat took the job at Apple, and his job was essentially to think about what comes after the personal computer. Because, of course, as we said, Porat had been thinking about this very thing for years. And he had a very clear vision. He believed computing was going to move away from the desktop computers and into something much, much smaller. And in 1989, he produced this big red notebook containing his vision for something he called the Pocket Crystal. A small touchscreen device you could use to make calls, send messages, buy things, download software. So really, a smartphone 18 years before the iPhone was launched. Now John Skulley, the Apple CEO, he loved the idea and gave Porat the resources to develop it. And the first thing Porat does is to convince two of Apple's top people, Bill Atkinson and Andy Hertzfeld, to join the project. And if you were a computer nerd back in those days, Atkinson and Hertzfeld were superstars. Because when developing the Apple Macintosh, they more or less invented the visual software and the user interface that every computer, tablet and smartphone still uses today.

Now Porat's idea is much bigger than simply building one Apple branded device.

He wants to develop the software that will become a standard used by lots of different manufacturers. So a bit like what Microsoft had done with Windows on personal computers, or what Android later did with smartphones in 2008 So that means that they need partners like Sony, which makes small portable electronic devices, partners like Motorola, which back then was one of the biggest names in wireless technology. And of course, Porat also needed telecommunication network companies to come on board as partners. Because remember, this was before the internet, kind of as we know it. So if you want a device to send a message, you know, check share prices, do all the things that Porat envisaged, you need to partner with the telecom networks because they already have the communication networks, but they would now have to build new data services on top of the networks to make Porat's idea work.