Innovation Heroes: The failed startup that shaped modern technology

In the early 1990s, General Magic emerged as a Silicon Valley startup with a clear vision: invent a personal communication device that would revolutionize how people connect and share information. Their early prototypes included what would eventually become staples in modern technology, such as touchscreens, emojis, and even USB connections.

This idea attracted heavy investment from tech giants like Sony, Motorola, and AT&T. But despite its groundbreaking innovations, General Magic failed to bring its device to market. The technology was simply too far ahead of its time.

As Michael Stern recounts, “Everything we take for granted about social, mobile, and e-commerce was developed at Magic – we were just too soon.”

While General Magic may have folded, its innovations lived on, paving the way for future technologies. Stern, who served as the company’s general counsel, points out that voice recognition technology developed at General Magic was adapted for use in OnStar, and several of the company’s alumni went on to play pivotal roles with tech giants like Apple, Google, and eBay.

Challenging the traditional Silicon Valley narrative

In 2018, a documentary about General Magic’s rise and fall, appropriately titled General Magic, premiered at the Tribeca Film Festival. One of the core themes of the film – which went on to win best documentary awards at seven festivals – is how the company’s story challenges traditional Silicon Valley success narratives.

“One of the reasons the filmmakers wanted to make this film was because when people think of Silicon Valley, they often think of icons like, you know, Steve Jobs, Bill Gates – one person,” says Veronica Miles, COO of General Magic Workshops. “But it’s actually never one person. It’s a team… On the inside of Silicon Valley, people embrace failure. They try lots of things. They take lots of big risks. There’s lots of money going in and out. Whereas on the outside, you think that if you just show up and breathe the air of Silicon Valley, you will be successful… When, in reality, failing is way more common than success.”

The documentary also clearly highlights the importance of teamwork within any organization.

“I had never met anyone as compelling as the three founders,” says Stern. “Marc [Porat] was such an extraordinarily charismatic visionary, and Bill [Atkinson] and Andy [Hertzfeld] were so overflowing with ideas and creativity about how to do this new thing. I had never experienced anything like it. It felt like we were working on a moonshot.”

While the company’s collapse had a major impact on its employees, the documentary highlights the resilience of the team and their ability to bounce back.

“People watching the film are inspired by how the team worked together,” says Miles. “They ask us, ‘How did they build a team like that?’ and ‘How did they create such a passionate, creative culture?’”

The answer lies in the company’s open, risk-embracing environment.

“One of the most powerful lessons from General Magic is that failure is not the end,” says Miles. “Their product may not have succeeded, but the ideas and people behind it went on to shape so much of the technology we use today.”

Lessons in leadership and innovation

For Stern and Miles, General Magic’s lessons have deeply influenced their perspectives on leadership and innovation. Stern, who was known as “Dr. No” during his time at the company for his role in mitigating risks, shared how the experience changed his outlook.

“What I learned at General Magic was to look beyond risk and focus on opportunities,” says Stern. “It made me a better counselor to startups, helping them see how to turn challenges into opportunities.”

For Miles, the experience of working on the film and now leading General Magic Workshops has been transformative: “Storytelling is so powerful for letting go of the shame around failure. I think the act of making the film and sharing the story with the world has been incredibly healing for the Magicians. It has also taught me that failure is just another opportunity to learn.”

The story of General Magic is one of vision, resilience, and the power of failure to spark future innovation.

“Yes, we failed, but we also left something behind that was worthwhile,” says Stern. This sentiment, echoed by both Stern and Miles, is a reminder that failure is often just the beginning of something bigger.

Listen to the full conversation here. You can also find episodes on SHI’s Resource Hub, Spotify, and other major podcast platforms, and on YouTube in video format.

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