Silicon Valley is littered with the corpses of "next big things" that turned out to be nothing. But once in a generation, a company fails not because they were wrong, but because they were right too early. General Magic is the ultimate example of a venture being head of its time, a company that basically built the iPhone in 1994 and then watched the world shrug its shoulders.
It’s a wild story.
Imagine it's 1990. The world is beige. Computers are heavy boxes that sit on desks and make screaming noises when they connect to phone lines. Yet, inside a spun-off skunkworks from Apple, a group of geniuses was already designing a handheld device that could send emojis, buy plane tickets, and fit in your pocket. They called it a Personal Intelligent Communicator. We call it a smartphone.
The Team That Built the Future
If you look at the roster of General Magic, it looks like a Hall of Fame list. You had Andy Hertzfeld and Bill Atkinson, the guys who basically birthed the original Macintosh. Then there was Tony Fadell, who would later go on to create the iPod and co-found Nest. You had Pierre Omidyar, who wrote the code for eBay on a General Magic terminal. Even Andy Rubin, the architect of Android, was there.
They weren't just making a gadget. They were trying to invent a new way of living.
Marc Porat, the CEO, had this vision of a "cloud"—he actually used that word in the early 90s—where data would live and be accessible from anywhere. He drew sketches in his notebook of people sitting in cafes, checking messages on tiny screens. In 1990, this sounded like Star Trek. To the engineers at General Magic, it was just the logical next step.
They worked in a fever dream. The office was filled with rabbits (literally, they had pet rabbits) and engineers sleeping under desks. They were creating a programming language called Telescript and a user interface called Magic Cap. It didn't look like Windows or Mac OS. It looked like a literal room. To check your mail, you clicked on a mailbox on a desk. To go to the "store," you walked down a virtual hallway.
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Why Being a Head of its Time is a Business Curse
Honestly, the tech was incredible. The Sony Magic Link, which was the first hardware to run their software, had a touch screen. It had an on-screen keyboard. It had a way to send "stickers" which were basically early emojis.
But there was a massive problem.
The internet happened.
General Magic was building a proprietary universe. They wanted to partner with AT&T and Sony to create a walled garden where everything was controlled and secure. While they were polishing their beautiful, bespoke icons, the World Wide Web was exploding. Tim Berners-Lee’s invention was messy, ugly, and free. General Magic was expensive and closed.
You've probably heard the phrase "the pioneers get the arrows, the settlers get the land." General Magic took all the arrows.
The Sony Magic Link launched in 1994 for about $800. In 2026 dollars, that’s nearly $1,700. It required a specific data subscription. It was slow because the processors of the mid-90s couldn't handle the ambition of the software. And the biggest kicker? It didn't have a killer app because the "app store" concept didn't exist yet. It was a beautiful, expensive brick that could send a digital postcard to the three other people who owned one.
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The Ghost in the iPhone
If you look at the 2007 iPhone launch, you aren't just seeing Steve Jobs' genius. You're seeing the refined, matured version of what General Magic tried to do thirteen years earlier.
The DNA is everywhere.
Tony Fadell has been very open about how his time at the company shaped the iPod. He learned that you can't just have a great device; you need the infrastructure. He saw the failure of the Magic Link and realized that for a handheld to work, the world had to be ready for it. The battery tech had to catch up. The screens had to get better. The networks had to be faster than a dial-up crawl.
There's a specific irony in the fact that Apple, the company that birthed General Magic and then abandoned it, ended up being the one to fulfill the prophecy. John Sculley, Apple’s CEO at the time, actually announced the Newton MessagePad while General Magic was still in development. It was a direct betrayal. The Newton was also head of its time and also a commercial flop, but it sucked the oxygen out of the room for General Magic.
What We Can Learn From the Failure
Software is easy. Timing is hard.
Most people think startups fail because the idea is bad. Usually, they fail because the ecosystem isn't ready. If you try to stream 4K video in 1998, you're a failure. If you do it in 2015, you're Netflix.
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General Magic spent years trying to solve problems that hadn't even become problems for the general public yet. They were worried about how to organize 1,000 digital photos when most people didn't even own a digital camera. They were perfecting mobile commerce before people felt safe putting a credit card into a desktop computer.
They were right about everything. The "cloud," the "smartphone," "emojis," "mobile apps," "e-commerce." They just weren't right then.
Real-World Takeaways for Innovators
If you’re working on something that feels like it’s years ahead of the curve, General Magic’s story offers some pretty sobering lessons. It’s not enough to be a visionary. You have to be a pragmatist.
- Check the Infrastructure: Is the hardware actually capable of running your dream software without lagging? If the answer is "not yet," you’re building a museum piece, not a product.
- Walled Gardens Die: Don't bet against open standards. General Magic bet on AT&T’s proprietary network; the world chose the open internet. Open usually wins because it scales faster.
- The "Good Enough" Rule: The World Wide Web was worse than Telescript in almost every technical way in 1994. But it was accessible. Don't let the "perfect" version of your vision prevent you from launching a "functional" version that people can actually use today.
- Watch Your Back: Your partners and investors are often your biggest competitors. Apple's decision to launch the Newton while being a primary investor in General Magic is a classic case study in corporate friction.
Building something head of its time is a badge of honor in history books, but it’s a death sentence for a balance sheet. The engineers at General Magic didn't lose; they just gave the rest of the world the blueprints for the future and went bankrupt in the process.
To really understand this, go find the 2018 documentary titled General Magic. It features the original footage of these kids in their 20s talking about how they were going to change the world. You’ll see them holding prototypes that look eerily like the device in your pocket right now. It’s a haunting reminder that being first rarely means being the winner.
If you are an entrepreneur or a creator, look at your current project. Ask yourself: am I building for the world that exists, or am I building for a world that won't arrive for another decade? If it's the latter, make sure you have enough cash to survive the wait. Most don't.