The company spun out of Apple in 1990 and early employees included future White House chief technology officer Megan Smith, future Android co-creator Andy Rubin, future eBay founder Pierre Omidyar, and future iPod and iPhone co-designer Tony Fadell, among others.
In 1990, General Magic set out to make a pocket-sized computer. The company was set to be huge, but instead became one of Silicon Valley's biggest failures. There were a lot of things that went wrong--but here are the three major mistakes that resonated most to me.
Ignoring shifts in the market.
Following trends can often carry a negative connotation. But when you're founding a company you need to look at what's happening in the market and create a product that aligns around that shift. In doing so, it immediately ensures there's a fit and need for what you're building. The team at General Magic completely ignored the internet mega trend and tried to create absolutely everything from scratch, rather than iterating on what was already out there. They tried to create their own momentum and ignored that the world was not ready.
Losing focus on the customer, or not even knowing who they are.
I grew up building software where you never had direct communication with the customer. We would build methodologies to guess what the customer wanted and then spend years building something that had no feedback loop in place. But we are here to serve our customers. And by putting a constant feedback loop in your process, you can build faster and better products. General Magic, on the other hand, had no customer focus and no idea who the customer even was.
Skipping the critical step of seeking market feedback.
When we founded Drift, we didn't have a product. We had a few ideas and were beginning to lay the groundwork for a sales and marketing platform. We also had some customers testing what we were building. But we knew that we weren't going to launch the product for at least a year. While most companies call this stealth mode, we made the conscious decision to start marketing immediately. Why? Because we wanted to build an audience so that when we were ready to launch, people already knew--and trusted--us. When we were ready to sell, they were ready to listen. We didn't need to then spend all of our time building trust, we could instead focus on getting our first paying customers. General Magic did the opposite. The company was shrouded in secrecy and waited until the last minute to have a big reveal, which meant they had no market feedback before trying to release their product into the market.
General Magic had the best team. The best vision. The best brand. The best partners (Sony, AT&T, Apple). The best funding (they opened on the stock market before even showing a finished product). They had the best of everything but that still couldn't save them.
It goes to show that ideas are powerful, but you can't just create a business on a good idea. It requires that perfect combination of an idea, customer-centricity, a killer team, market fit and timing, testing, and learning.