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July 1, 2018

Innovation thrives with constraints

Summary:

Anyone who thinks innovation is about an “aha” idea, the best partners or great talent should take a look at this article on the history of General Magic. 

It had the best idea, essentially designing an iPhone 6 in the early 1990s. It had the best partners: Founded by Apple, the company had all the major telecommunications companies as investors, from AT&T on down. The talent was off the charts. General Magic was run by the stars of the original Macintosh team and included others who went on to develop the iPod, iPhone and the Android and, as if that weren’t enough, to found Nest and even eBay.

Yet the company sold only 3,000 units to what executives acknowledged were friends and family and burned a $100 million hole in the ground. 

Students of Silicon Valley history will note that this epic bust occurred during the interregnum at Apple, after Steve Jobs was forced out in 1985 and before he returned in 1997. But the genius theory of innovation doesn’t explain the problems at General Magic, either. In fact, the problem was that there were too many geniuses at the company.  

Guy Fraker, our chief innovation officer, says people often think that innovation means thinking outside the box. In fact, he says, innovation efforts need a box, to focus people on the right customer need, the right technologies, the right costs and so on. The trick is to frame the box the best way possible.

“A disparate innovation collection lacking a clear mandate, shared focus and unifying goals,” Guy says, “results in a more chaotic, minimally effective launch and problems with scaling.”

And the General Magic effort was as disparate a collection as could be. At a time when WiFi didn’t exist, when the Internet was still in its formative stages, when few people were even using email — and were using faxes that had to somehow be integrated with the mobile phone being designed — General Magic was trying to do everything at once.

There was no box in sight. In fact, many of the later innovations by team members at General Magic occurred because someone put a box around a particular problem and solved it. The iPod, for instance, occurred because Jobs wondered whether he could put 1,000 songs in someone’s pocket. 

I still love the General Magic name. It drew on the Arthur C. Clarke quote that “any sufficiently advanced technology is indistinguishable from magic,” combined with the belief that in the tradition of General Electric and General Motors there was now room for a General Magic. 

But it’s a harrowing example of how not to innovate.

Cheers,

Paul Carroll
Editor-in-Chief

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About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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