In the spring of 2024, David Epstein explains (in Inside the Box), he met up with a group of General Magic alumni to discuss their proto-iPhone:
It had been three decades since they went public—with no revenue—in Silicon Valley’s first “concept IPO.”
[…]
On the day of the IPO, Sony’s investment in General Magic instantly appreciated so much that it was more than they had anticipated making in their five-year business plan for the product. “And then it was gone,” Gruzen said. “For a moment, it was fantastic.”
[…]
Professor Tom Eisenmann, author of Why Startups Fail, rolled in a whiteboard so that the General Magic group and the audience could compile a list of what had gone wrong. The board filled up quickly. Too many partners; too early; too little attention to the limits of available technology; too vague a customer; too much making everything on their own instead of building on others; too little management. One audience member, an entrepreneur and mentor to Harvard and MIT students, described at length how watching the film reminded her of her mentees, whose giant visions often get in the way of accomplishing anything at all. Professor Eisenmann distilled her wisdom on the whiteboard: “Do something, not everything.” Laughter and head nods spread around the room.
Steve Jarrett explained to the audience that the software engineers were so skilled that they could imagine and build new things literally overnight. “We just kept inventing new ideas, and it kept making the product bigger, and bigger, and bigger.” The CEO, he said, “would just tell a new story every time there was a new idea.”
Jarrett recounted how one of the third-party app developers he managed, Jeff Hawkins, did what they could not—something, not everything. Hawkins had designed an app called Graffiti that could be used on General Magic’s platform. It allowed users to make quick strokes with a stylus that would be recognized as letters and punctuation. “So Jeff called and said, ‘How many devices have you sold?’ ” Jarrett explained. Jarrett shared the disappointing news, to which he recalled Hawkins replying: “Oh my God.” After that, Hawkins and his small team decided to build their own, simpler product. “When he told us that, we said there’s no way. How are you going to compete with Sony and Motorola?” Jarrett recalled. “And he crushed us, because he took this simple iterative approach to solving problems.”
Hawkins took his one tiny component of General Magic’s giant ecosystem and made it the basis of a much simpler device. It started just with functions for a calendar, contacts, a to-do list, a memo pad, and a calculator. That was the PalmPilot, which became a smash hit in the same era.
[…]
“We had too much on our plate,” Stern told me. “If you don’t whittle it down, you’re not gonna make it. And we kept piling it on. Why did we need sixteen partners? We didn’t. But there was all this FOMO.”
In Why Startups Fail, Eisenmann describes six patterns that account for the vast majority of startup failures:
Bad Bedfellows. Startup success is thought to rest largely on the founder’s talents and instincts. But the wrong team, investors, or partners can sink a venture just as quickly.
False Starts. In following the oft-cited advice to “fail fast” and to “launch before you’re ready,” founders risk wasting time and capital on the wrong solutions.
False Promises. Success with early adopters can be misleading and give founders unwarranted confidence to expand.
Speed Traps. Despite the pressure to “get big fast,” hypergrowth can spell disaster for even the most promising ventures.
Help Wanted. Rapidly scaling startups need lots of capital and talent, but they can make mistakes that leave them suddenly in short supply of both.
Cascading Miracles. Silicon Valley exhorts entrepreneurs to dream big. But the bigger the vision, the more things that can go wrong.