General Magic MVP Review: Surfing a wave, or boiling the ocean?
So I watched the movie about General Magic and I figure it’s up my alley to analyze how this train wreck happened.
If you haven’t heard the story: Two of the original Apple geniuses, Bill Atkinson and Andy Hertzeld, plus a charismatic business guy named Marc Porat, left Apple in 1990 to start General Magic, a spinoff company making an iPhone-like device using the janky technology of the time. (For context, the first iPhone launched in 2007 and was groundbreaking technology for its time.)
After over four years of R&D, they partnered with Sony to launch Magic Link, an early Personal Digital Assistant (PDA), and got basically zero users. One of the General Magic employees in the movie was saying how he recognized all the names in the list of Magic Link buyers. They were all just friends of the project. No one else ever got the value prop or cared.
They even got their ass kicked by the Apple Newton, which launched earlier (1993) and sold a hundred times more devices than General Magic ever did, and the Newton is itself an infamous $100M market failure due to its high price and bad handwriting recognition.
In 1995, General Magic IPO’d and raised $96M, plus another $200M from strategic partners.
The movie made it seem like the IPO marked the peak of a hype wave which deflated once Magic Link launched, but Wikipedia’s timeline looks more complicated. Somehow the wildly successful IPO happened after Magic Link — I guess it was before Magic Link’s dismal sales were widely known? — and then they chugged along for another five years, sans the original team, before shutting down.
How did it happen?
Imagine: You’re standing on the beach, squinting to see into the distant waters. You think you can see the greatest wave of all time start to gather momentum: Mobile computing. Oh, and also the other biggest wave of all time, digital connectivity (too early to definitively say “the internet”).
If this once-in-a-lifetime wave is really coming, doesn’t it make sense to go all out to ride it?
Ok, but when you’re trying to ride a wave, you have to come at it from the optimal angle. If you just charge at it straight on, you get dunked underwater and you’re struggling to breathe, because you’re actually trying to boil the ocean. (I have no idea what surfing is like ok?)
What I mean is this:
At first glance, General Magic had an amazing Value Prop Story: A cell phone that also had a calculator, contact list, spreadsheets, email, etc.
But in order to have a strong Value Prop Story, you have to be a lot better than the next-best alternative, and that was where the pitch starts to get weaker. In 1990, the next-best alternative for all of those functions was a laptop and a “dumb” cellphone. That alternative was good enough for most people’s needs. Plus, making a portable computing device really good at any one function was painstakingly hard.
If we imagine that General Magic is going to use its R&D superpowers to make a mobile device that’s so functional easy to use that most people prefer it to a laptop (as they do with modern smartphones), then we’re back to having a strong Value Prop Story.
Most bloated MVPs I cover on this blog are ones where the value prop is just not that attractive to the market (compared to already existing alternatives), regardless of future technological progress. This is the first time I’m writing about a technologically-ahead-of-its-time Bloated MVP.
General Magic is interesting because in some hypothetical sense they had a plausible path to making a great product, but in a real sense they didn’t, because the only path was a ten-year R&D path. The consumer technology industry moves fast enough that a ten-year path to release a product is fundamentally a hopeless business strategy. A small team can’t work really hard on a revolutionary device if it takes more than a couple years.
The movie highlights this problem by talking about how while the Internet and the World Wide Web were becoming increasingly mainstream in the ‘90s, the Magic Link team wasn’t paying attention, instead developing their networking capabilities to work on a proprietary AT&T-only network called “PersonaLink”. Their MVP was obsolete when they shipped it — and that was only after four years of R&D, before they could even ship something anything near as good as their original hopes.
The General Magic folks were uncalibrated about what successfully riding a market trend looks like. Contrast Steve Jobs’s famously market-calibrated senses when he came back to Apple and launched the iMac, iPod, iPhone and iPad (although Jobs was less calibrated about building for the market during most of his tenure at NeXT).
