The Most Important Company You’ve Never Heard Of
CChris Williamson
Small Business/StartupsManagementComputing/Software
Transcript
00:00:00What was General Magic?
00:00:01Because this was a company that I feel like I should have heard of, but I haven't.
00:00:06I like to call it the most important company nobody's ever heard of.
00:00:08Yes.
00:00:09Not important because of what they accomplished, because they went down in flames, but because of the people that came out of it.
00:00:14So this is a story about the danger of having too few constraints.
00:00:17So this was a company that was so visionary in the early 90s that Goldman Sachs took them public in the first so-called concept IPO in Silicon Valley history.
00:00:28They went public just with an idea, not with a product.
00:00:32Founded by three former Apple employees, two of whom designed the original Mac.
00:00:38The third guy, his job inside of Apple was seeing what's the next frontier after personal computing, named Mark Peratt.
00:00:44Absolute visionary.
00:00:44He was the CEO.
00:00:45I was reading his PhD dissertation during book reporting, 1976 at Stanford.
00:00:51He coins the term information economy on the first page.
00:00:55And this thing is eerie to read.
00:00:57He saw the future in a way that I certainly never have.
00:01:03And not just the promise of technology, but the dangers with automation, with misinformation, et cetera, et cetera.
00:01:10And in 1989, in a big red leather notebook, he draws a thin glass rectangle with no protruding buttons and a touchscreen with rectangular apps on it.
00:01:19That's going to be a phone and a computer and a fax machine and ATM and video games and messaging and everything else.
00:01:26The web didn't exist yet.
00:01:26The web didn't exist yet, right?
00:01:2815% of American households had computers.
00:01:31But this thing is so visionary that money pours in, talent pours in.
00:01:35They form this 17-member alliance of international telecom companies so big that their meetings have to start with an antitrust lawyer listing all the things they're not allowed to discuss.
00:01:47And they can do anything.
00:01:48They have unlimited money.
00:01:49They have unlimited talent.
00:01:50And so they frequently do do anything.
00:01:52Any good idea, they're making this personal communicator.
00:01:54Any good idea that somebody has, they basically do it.
00:01:57They define their customer as Joe Six Pack, which is as good as no definition at all because nobody has met that guy.
00:02:03And so they're doing this incredible innovation, precursors to USB, the precursors to emojis, all these things.
00:02:08But it just keeps growing and growing and growing until it starts to collapse under its own way because they have no focus whatsoever.
00:02:16This incredible amount of resources obviates the need to decide what they should actually be doing.
00:02:23So I interviewed dozens of former employees and I'd say three quarters of them said something to the effect of I just couldn't figure out what not to do.
00:02:32The emblematic interview was with this engineer named Steve Perlman, who was writing a calendar function for the communicator.
00:02:38And he writes it to go from 1904 to 2096.
00:02:41Checks it in, thinks he's done.
00:02:43Then a team leader comes to him and says, Steve, someone might write historical apps.
00:02:46You have to make this thing go back farther.
00:02:48So he opens it up and writes it to go from year one to the future.
00:02:51Done.
00:02:52Then another team comes to him and says, Steve, why are you tying it into this arbitrary religious context?
00:02:56You should make it go back to the beginning of astronomical time.
00:02:59So he opens the calendar function up and writes it to go from the Big Bang.
00:03:02To the future.
00:03:03And it takes months when it would have been four lines of code if they stuck in 1904 to 2096.
00:03:08This is how everything happened at General Magic.
00:03:10They go public in the mid-90s.
00:03:13Mark Peratt said he raised so much money because he wanted to create heaven for engineers, right?
00:03:17Where they were free to create and limited only by their imagination.
00:03:21He said, what more could anyone ask for?
00:03:23I think the answer was less freedom because they could not figure out what not to do.
00:03:28So it totally imploded.
00:03:29You know, stock price doubles first day.
00:03:31Worthless two years later.
00:03:32Wow.
00:03:33But the people that came out of it, especially the young people, were scarred by this and took
00:03:38these lessons about the importance of putting limits in place.
00:03:41And they co-founded LinkedIn and eBay and Nest and created Android and iPod and iPhone and
00:03:48Google Maps, Safari, all these other things.
00:03:53And so I think it became important in that way because the lessons that these other founders
00:03:58took about the need for constraints became incredibly important.
00:04:04One of the important characters in the book, this guy, Tony Fidel, was like the most scarred
00:04:08because it was his first job out of college.
00:04:10And these were his rock star heroes and it goes down in flames and it's like a trauma for
00:04:14him.
00:04:15He goes on to lead the design of the iPod.
00:04:17And then he co-founds Nest, the smart thermostat company, where he, when I first interviewed
00:04:21him, by the way, he was like, I'm interested in constraints.
00:04:23And Bill Gurley, the venture capitalist, had connected me with him.
00:04:26He's been on the show, front of the show.
00:04:27And Bill had told me when I said I was interested in constraints that he said, we have a
00:04:32saying in venture that more startups die of indigestion than starvation.
00:04:35He says, you got to talk to my friend, Tony.
00:04:37I talked to Tony.
00:04:37Tony says, that's my saying.
00:04:38I say that.
00:04:40And I've got to interject here.
00:04:41Do you know what Churchillian drift is?
00:04:43No.
00:04:44So any unattributed quote over time is more likely to be attributed to Churchill.
00:04:49Okay.
00:04:50But it's kind of, if nobody can define who said it first, it's almost everybody's.
00:04:54I think dogs are sort of like that.
00:04:56If you've got a child with you, I can't go up and pet your child.
00:04:58If you've got a dog with you, that is a gift of humanity.
00:05:01An unattributed quote is kind of the same thing that the public intellectuals.
00:05:04That's fair.
00:05:04Okay.
00:05:04I would have thought, see, my first thoughts would have been you attribute either Yogi Bear
00:05:09or Mark Twain.
00:05:11Mark Twain.
00:05:11There's definitely a Twainian drift as well.
00:05:13I don't think he said almost any of the things that he has actually said on the internet.
00:05:15That's the position you need to get into though.
00:05:17Okay.
00:05:18One of my favorite things is to be accused of having said great quotes that I didn't.
00:05:23Yeah.
00:05:23I'm like, this is the freest plagiarism that I can ever do.
00:05:28I'm culpably deniable.
00:05:29Are they good quotes though?
00:05:31The ones that are bad.
00:05:32Okay.
00:05:32I mean, that is the entire, he said this thing and I didn't, and now I'm getting castigated
00:05:36for it.
00:05:37A lot of the time, they're pretty good.
00:05:39A lot of the time, they're not sloppy.
00:05:40That's nice.
00:05:40I have a quote.
00:05:41So I have a different quote problem with this one quote where I gave it for an article once
00:05:47and I thought I was taking it from someone else.
00:05:50And I sort of told the reporter, like, I can't remember who said this, but the quote
00:05:53was, I was talking about how expert performers often don't know how they do what they do.
00:05:56Like, they'll give an explanation, but they actually often don't know how they do what they do.
00:05:58Don't tell me that you quoted yourself and forgot.
00:06:01So I said the quote was, just because you're a bird doesn't mean you're an ornithologist.
00:06:06Just because you fly doesn't mean you know how you're doing it.
00:06:07Yeah.
00:06:08And neither she nor I have ever been able to find another source.
00:06:11I swear I was taking it from somewhere, but I've never been able to find another source.
00:06:14So she ended up attributing it to me, and I still am skeptical.
00:06:17Well, that's okay.
00:06:18I feel like originality is just undetected plagiarism.
00:06:22And if it wasn't detected, then it means that you got away with it.
00:06:24Okay.
00:06:24I've never been able to find it.
00:06:25However, if you forget-
00:06:28Someone watching this is going to find it now.
00:06:29It'll be funny.
00:06:30Leave me in the comments.
00:06:30Yeah, the internet's going to get it.
00:06:31Yeah, yeah.
00:06:31Find out who it is.
00:06:33If you say, I can't remember who said this quote, but this, this, this thing, and it later
00:06:39turns out that you said it, that's an additional level of embarrassment.
00:06:43Not knowing who said it is moderately embarrassing, especially if you say it a lot, but not knowing
00:06:48who said it and finding out that it was you is a sort of dementia that should be reserved
00:06:52for all days.
00:06:53It doesn't bode well.
00:06:54Yeah.
00:06:54Yeah, yeah, yeah, yeah, yeah.
00:06:56Bill Gurley, indigestion.
00:06:58Tony Fidel.
00:06:59Okay.
00:06:59So at Nest, this was kind of the apotheosis of his fervor for constraints, where he forced
00:07:04the team to work inside a literal box, where he made them prototype the packaging before
00:07:09the product, because he said, this is what the end user is going to see.
00:07:12On a shelf.
00:07:13If we can't fit it here, this thing that we're trying to tell them, it's not a priority and
00:07:17we're putting it on the back burner.
00:07:19And so it's, I think that's what useful constraints can often do is force you to clarify your priorities
00:07:23in a way you wouldn't otherwise.
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00:08:21Thank you very much for tuning in.
00:08:23If you enjoyed that episode, another one that I know you'll love, it's just here.