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The Illusion of Magical Thinking

By Rachel Fox

It’s been called “the most important company to come out of Silicon Valley that no one has ever heard of.” A future-focused Apple spinoff 20 years ahead of its time, General Magic  accurately predicted what technology consumers of the future would find essential. General Magic’s founders, Marc Porat, Andy Hertzfeld, and Bill Atkinson—all members of the original Mac team—envisioned both a personal computing device that would evolve into the smartphone and the services that would be integral to the experience of using it.

Like Apple, media and industry lore shot General Magic into mythic territory. It led to the team raising $96 million before a product ever saw the light of day, and an IPO with a valuation of $834 million. General Magic was so convinced of the guaranteed success of their innovative products, they were blinded by unfocused ambition and ultimately destined to financial ruin. The founders’ limited prospective was met with other disastrous missteps and setbacks:  the inability to juggle complicated corporate partnerships and being undercut by the company its founders abandoned, Apple, which beat it to market with the similar-looking Newton PDA.

In the early 1990s, mobile phones were still in their infancy and the concept of communicating via a machine outside of the home or office was completely foreign to most consumers. When it came time to release General Magic’s first device, the Sony Magic Link, in 1994, the company envisioned a smashing success. When plugged into a telephone jack, the Magic Link was a portable device that could handle e-mail, make calls, and even send instant messages to other devices—complete with proto-emojis. It had an app store where users could download music, games, and programs that could do things like track expenses or check the stock market. It could take photos with an attached camera, and prototype even included a touch screen. Adoption turned out to be a bit trickier than design: the Magic Link didn’t appeal to users as particularly fun or useful, and the $800 price tag was too high for a novelty item.

While General Magic may have been ready to change how the world communicates, the world of the early 1990s wasn’t ready for General Magic. The founders’ extreme focus on their core product and original vision allowed them to be blindsided by the technological shift customers were paying attention to: the web.

General Magic engineer Kevin Lynch, who would go on to head the Apple Watch team, recalls the moment he realized the company was missing something. Lamenting in the 2018 documentary, General Magic, Lynch says, “We were so focused on the future we were missing what was going on around us.” “An intern came in and was telling us, ‘You guys are totally missing it–the web is where it’s at.’ This was in late ’94 or early ’95.”

Brands must have a customer’s perspective to understand the needs that exist in the market. While they might believe otherwise, technological innovators are often not the same as their customers—they tend to think much further into the future than a consumer’s current needs. Understanding the customer journey and perspective demands a framing mechanism that clearly articulates what’s valuable to a brand’s audience. Story provides a strategic framework for organizations to think outside themselves and embrace a customer-centric approach.

Without this framework, the General Magic Founders suffered from an Innovator’s Dilemma, a concept described in the eponymous book in which outstanding, innovative companies with genius products can seemingly do everything right and still fail. Harvard professor and business leader Clayton Christensen warned that the companies who don’t listen to customers or carefully track competitor’s actions will fail to seize the next wave of innovation in their industry.

General Magic founders Porat, Hertzfeld, and Atkinson were all visionary engineers—brilliant minds that envisioned a world of continuous innovation. They were several steps ahead of the market, and while that was revolutionary in the technical sense, it got them so far ahead of their customers than it prevented them from gaining widespread market adoption. While the General Magic team was working around the clock and sleeping under their desks to develop their products, the world was still slowly finding its footing in the internet era.

General Magic expected the Field of Dreams affirmation—“if you build it, they will come”—to be their reality.  While the firm was well-resourced and surely had access to market research data and other information to help shape its products, the failure to shape those inputs into a single, coherent narrative kept it from becoming the central point of the business, which meant the customer’s views were supplanted by those of the internal team.

General Magic created concepts that delighted their friends, tech colleagues, and themselves. By nature of their training and expertise, technologists are innovators—those most likely to embrace new ideas. The customers that make a product successful, however, lag behind: the nearly 70 percent of people who comprise the early and late majority of markets are rarely represented inside a startup.

“This is our early vision for the product. A tiny computer, a phone, a very personal object. It must be beautiful. It must offer the kind of personal satisfaction that a fine piece of jewelry brings. It will have a perceived value even when it is not being used. It should offer the comfort of a touchstone. The tactile satisfaction of a seashell. The enchantment of a crystal. Once you use it, you won’t be able to live without it. It’s just not another telephone. It must be something else.”

Marc Porat’s words describing General Magic’s initial vision are technologist poetry. While beautiful, the words fail to identify the common, necessary problem General Magic’s potential customers suffer from. And while it’s a passionate ode to product, the customer who uses it is notably absent.

MagicLink sold just under 3,000 units, and most of the buyers were people the company knew personally. What it had in foresight to what the customers of the future would want, the firm lacked in comprehensive understanding of their audience.

After the initial disaster of the MagicLink, General Magic pressed on to create Telescript in 1996, an agent-oriented programming language that would automatically search the internet for airline prices and stock quotes. Just a year later, it pivoted to a completely new direction: voice recognition. Again, the team of self-professed code wizards and hardware ninjas set out to create products that were cutting edge, exciting and innovative—and not marketable.

Products like Portico, General Magic’s virtual assistant technology, which could access the web and email through voice commands, and MyTalk, which allowed users to receive voice messages and email over phones, again missed what people actually wanted from mobile technology in the mid-1990s. With each innovative product the company launched, founders Porat, Hertzfeld, and Atkinson continued to see themselves as their customer.

Like Polaroid and Blockbuster, General Magic failed to dedicate themselves to the present needs of their customers and keeping them central to everything that matters. Having a brand story as a framework becomes a touchstone for businesses to turn to when making every business decision—and when story overlays those decisions, it solves the Innovator’s Dilemma.

This story is necessary to focus a brand’s vision and keep their entire operation aligned with their core purpose.

While Apple may be able to create products that its customers don’t realize they yet need, they are the exception and not the rule. They have vision and laser-like product focus—but they also have a brand story and mission centered on innovative technologies that provide simple solutions. When a company is customer-focused, they will always have an audience to cater to, new problems to solve, and products and services to put out in the market. But when the focus is on creating an incredible product, both audience and company may well disappear.


Rachel Fox is a manager at Woden. Whatever your storytelling needs may be, Woden can help. Read our extensive guide on how to craft your organization’s narrative, or send us an email at to discuss how we can help tell your story.