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“A tiny computer, a phone, a very personal object . . . It must be beautiful. It must offer the kind of personal satisfaction that a fine piece of jewelry brings”

General Magic

Probably the most important company in Silicon Valley history that you’ve never heard of.

In 1990, a group of technologists founded a company called General Magic to create what today we would call a smartphone. In 1990 desktop computers were in widespread use (but with no internet yet) and cellular telephones were being used for some voice conversations. The founders of General Magic envisioned a future when those things would come together into a single device.

CEO Marc Porat described the imaginary device:

“A tiny computer, a phone, a very personal object . . . It must be beautiful. It must offer the kind of personal satisfaction that a fine piece of jewelry brings. It will have a perceived value even when it’s not being used… Once you use it you won’t be able to live without it”.

General Magic operated in complete secrecy (“Stealth Mode”, in Silicon Valley parlance), yet they signed-up the largest telecommunications companies in the world as investors and partners, including Sony, Motorola, Matsushita, Philips and AT&T.

Excitement was so high that General Magic had an IPO in 1995 despite the fact that they had no products or revenue — it was Silicon Valley’s first “Concept IPO”.

The company’s stock price doubled the first day.

Unfortunately, the product never really got off the ground, ran into engineering and market problems, and General Magic went bankrupt just a few years later. Too much had changed in a few short years, with the introduction of the internet and mobile data networks. Yet much of what was developed by General Magic is in the products that you now use every day.

Here’s what just a few of the General Magic alumni went on to do:

Tony Fadell went to Apple where he developed the iPod and then he co-invented the iPhone, then he left Apple and founded Nest which he sold to Google for $3.2B.
Andy Rubin went on to be Founder and CEO of Android.
Andy Hertzfeld went on be a lead developer at Google and a founder of the Open Source Applications Foundation.
Pierre Omidyar went on to found eBay and then, after becoming a billionaire at the age of 31, he founded the Omidyar Network.
Kevin Lynch went on to become CTO of Adobe and then joined Apple where he developed the Apple Watch.
Steve Perlman went on to found WebTV, the first interface to connect a home TV to the internet (sold to Microsoft for $425M).
Marc Porat went on to be a leading cleantech entrepreneur and investor.
Megan Smith went on to become the Chief Technology Officer of the United States (the first female to ever hold the position).

Pretty impressive, right? And there are many many other General Magic alumni scattered all over Silicon Valley today, continuing to create many of the leading-edge products and services that we use every day.

General Magic wasn’t around long as a company, and it ended up being a complete failure commercially. Yet in the history of Silicon Valley the company still looms large.

Also see my brief history of Silicon Valley.

Below is the trailer for a documentary about General Magic.

Written by

I’m a Silicon Valley guy. I teach entrepreneurship at Stanford, coach startup CEO’s at Miller Center, and run the 4thly Startup Accelerator. Also, I love tacos.

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