We almost had a smartphone in the 90s. Why did it fail?

Summary

Planet Money – "We almost had a smartphone in the 90s. Why did it fail?"

Date: June 26, 2026
Hosts: Erica Barris, Emma Peaslee
Featured Guests: Tony Fadell (former General Magic employee, iPod/iPhone creator), David Epstein (journalist, author "Inside the Box")

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Episode Overview

In this episode, Planet Money investigates the story of General Magic, the legendary 1990s Silicon Valley startup that—decades before the iPhone—tried (and failed) to create the first true smartphone. The hosts explore why General Magic’s groundbreaking vision collapsed, even though it had immense talent, funding, and ambition. Through interviews with Tony Fadell and author David Epstein, the episode unpacks how too much freedom, money, and lack of constraints can stifle innovation, and how these lessons informed later transformative products like the iPod and iPhone.

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Key Discussion Points & Insights

1. General Magic’s Visionary Beginnings

• Setting the Stage (05:30–07:13):

  • In the early 1990s, General Magic set out to build a palm-sized device that could make calls, send messages, buy goods, book travel, and more—a vision strikingly similar to today’s smartphone.
  • The company had everything: top talent from Apple, huge financial backing from industry giants (Apple, AT&T, Sony, Panasonic, Motorola), and a mission to revolutionize how people communicated and worked.

  “We were creating the entire operating system. We were creating all the chips, we were creating the devices, we were creating all the network servers and network server software, all the user interface, all the applications.” — Tony Fadell (06:03)

• Work Culture:

  • The team—self-styled “magicians”—operated in a creative, rule-breaking environment, working long hours in a dorm-like office with a real bunny, Bowser, as their mascot.

  “It was the biggest sandbox, playing with the smartest, coolest geeks.” — Tony Fadell (09:38)

2. Too Much of Everything Means Nothing Gets Done

• No Deadlines, No Product (10:10–10:58):

  • Despite initial optimism and endless resources, General Magic’s project timeline continuously slipped—from an intended 18 months to over four years. They became paralyzed by endless possibilities.
  • Investors grew impatient; eventually, they had to ship something.

  “When I joined, they were like, we are going to ship this product in the next year to year and a half… well, 12 months goes by, and I’m like, okay, we’re shipping a product… then 18 months go by… then 24… Then it was, you know, 32 months.” — Tony Fadell (10:10)

• Release and Commercial Failure (11:12–12:26):

  • The Sony Magic Link, based on General Magic’s technology, debuted with fanfare in 1994. Retailing for $800, it sold fewer than 3,000 units, mainly to insiders.
  • Customers were bewildered; there was no compelling case for why they needed the device.

  “This Magic Link ended up being the biggest flop in Silicon Valley for a decade or more.” — Tony Fadell (12:07)
  “It is not enough to have supply. You gotta have demand.” — Erica Barris (12:22)

3. The Importance of Constraints in Innovation

• Expert Analysis / The Lessons (12:52–19:16):

  • David Epstein’s Take: Too much time, money, and talent can lead to incoherence instead of success.

    “They were a spectacular failure because they had too much. They had too much talent, they had too much time, they had too many resources. They could do anything. And so they did do anything.” — David Epstein (12:58)

  • Three Big Lessons:

    1. Lack of a Real Customer or Problem (13:56–15:20):

       • The team imagined abstract users (“Joe Sixpack”) rather than identifying real needs.
       • “Joe Sixpack… didn’t need email in his pocket because odds are he didn’t even own a computer.” (14:15)
       • Even user testing with Tony Fadell’s mom resulted in confusion about the device’s purpose.

    2. Too Much Investment, Too Many Stakeholders (15:32–17:03):

       • Money came with strings—too many corporate partners, each wanting the product to fit their systems.

       • “General magic probably would have done better to stay really, really, really small.” — David Epstein (16:21)

       • Brooks’ Law: Adding more people to a late project only makes it later. (16:35)

    3. No Managers, No Deadlines (17:37–19:16):

       • Legendary engineers led the company but weren’t equipped to manage, set boundaries, or prioritize.
       • Feature creep ran rampant (e.g., a calendar app that ended up spanning from the Big Bang to the future).

       “If he had stuck with 1904 to 2096, it would have been four lines of code… because they could do anything, they did, and everything always got bigger.” — David Epstein (19:16)

  • End Result: After years, the Magic Link “never delivered on its most basic promise… didn’t end up having a phone.” (19:36)

4. Aftermath: Insights for Future Innovation

• Tony Fadell’s Reflection (21:42–24:43):

  • Tony turned his failures at General Magic into a playbook for success at Apple (iPod, iPhone).
  • Constraints—tight budgets, clear customer needs, strict deadlines—were crucial to making the iPod and iPhone a reality.
  • Iteration was key: “At Apple, with a limited budget and a clear scope… I looked for ways to build on what was already out there… What are the Lego blocks I can get?” — Tony Fadell (23:09–23:39)
  • At Apple: “We must ship by Christmas.” Setting hard deadlines enabled fast iteration, something impossible at General Magic.

  “You can have too much money, absolutely. Because you don't have constraints to make you think hard… When you know the clock is ticking and the bank account is draining... it focuses people.” — Tony Fadell (22:36) “General Magic, we only got one. We only got one shot because it took so long, so many years.” — Tony Fadell (25:08)

• The Broader Legacy (25:37):

  • Many General Magic alumni went on to create the digital platforms and products that now define modern tech: iPhone (Tony Fadell), Android, eBay, LinkedIn, Nest, Google.
  • David Epstein’s surprise: The thing everyone thinks will help creativity—no oversight, unlimited freedom—is often a recipe for disaster. Real creativity thrives with boundaries.

  “In any way you cut it, in the abstract, people say they want more freedom, and in reality, it’s often not good for them… Our preference for complete freedom is often a mismatch with what actually gets the best work from us.” — David Epstein (26:14)

• The “Green Eggs and Ham Hypothesis” (26:32–27:09):

  • Dr. Seuss wrote one of his most famous books using only 50 words—a constraint imposed by his publisher. The result: greater creativity.
  • “Constraints force you to do something difficult… But it's what psychologists call a desirable difficulty…” — David Epstein (27:09)

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Notable Quotes & Memorable Moments

• On Early Computer Culture:

  “In Rolling Stone, there was a huge article by Stephen Levy about the original Mac team. And I was like, oh my god. There’s computer guys like me… and they’re in a rock and roll magazine. I’m like, superstars.” — Tony Fadell (02:25)

• On The Downfall:

  “They could do anything. And so they did do anything.” — David Epstein (12:58)

  “They very rarely told someone ‘no, you couldn’t do something.’” — David Epstein (17:46)

  “No gods, no masters, but maybe deadlines.” — Emma Peaslee (28:16)

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Timestamps for Key Segments

| Topic | Timestamp | |--------------------------------------------------|------------| | General Magic's origin and ambition | 05:30–07:52| | Work culture and early optimism | 06:39–09:49| | Failure to ship; timeline slips | 10:10–12:39| | David Epstein: too much freedom, not enough focus | 12:52–13:56| | Three key lessons from General Magic’s failure | 13:56–19:16| | Tony Fadell on Apple, constraints, and deadlines | 21:42–24:43| | Product iteration at Apple vs. General Magic | 24:48–25:19| | The Seussian case for creativity through limits | 26:32–27:09| | “No gods, no masters, but maybe deadlines.” | 28:16 |

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Takeaways

• Vision and talent alone don’t guarantee success; innovation flourishes under real-world limits.
• Constraints (time, money, scope) force teams to focus on what matters, solve real problems, and iterate quickly.
• Many pivotal advances in technology and culture—including even the iPhone itself—carry lessons distilled from spectacular failures like General Magic.

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Further Reading & References

• General Magic Documentary: Recommended viewing for deeper insight into the startup’s culture and history.
• Tony Fadell’s book: Build
• David Epstein’s book: Inside the Box

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This episode is essential listening for anyone interested in tech history, innovation, and the paradoxical role of constraints in sparking creativity.

Transcript

[Tony Fadell]

This week on the NPR Politics Podcast, we're digging into the massive wave of tech money flooding the midterms. With a growing appetite in D.C. to regulate AI.

[Emma Peaslee]

AI companies and AI interests really want to be involved in picking who is going to write that kind of legislation.

[Tony Fadell]

We break down a proxy battle over the future of AI regulation this week on the NPR Politics podcast.

[Erica Barris]

This is Planet Money from npr. Okay. How many times have you sat and thought about how much more you could accomplish if you had more. More time, more money, more resources, like

[Emma Peaslee]

how good your project could be if you had just one more day or

[Erica Barris]

a bigger budget or more help?

[Emma Peaslee]

Well, this is the story of a company that did have all of that, and they were making something amazing, something most of us touch every day. A smartphone.

[Erica Barris]

But, and this is the part that is bonkers, this was happening nearly two decades before the iPhone came out, before

[Tony Fadell]

the Internet, before WI fi, before mobile data, before cell phones even.

[Emma Peaslee]

Tony Fadell was employee number 29 at

[Tony Fadell]

that company, before even email really existed for people, before anything like Amazon or E Tailing existed, before downloadable games or downloadable music existed. All of that stuff we were creating, all the technology that would later become what the iPhone was.

[Emma Peaslee]

Nowadays, Tony is a businessman. He's always been a computer geek. His words, not ours.

[Tony Fadell]

I was making fake IDs on a Mac in high school because you had a laser printer, and a laser printer was like, oh, my God, I could replicate things in the world. So I was making fake IDs on laser printers.

[Erica Barris]

He must have been very popular.

[Tony Fadell]

Oh, yeah, Yeah. I made a lot of money, too.

[Erica Barris]

Tony was brought up in the 70s and 80s to build things.

[Tony Fadell]

I was fixing things. I was changing electrical sockets.

[Erica Barris]

You're describing yourself as kind of being like a shop class kind of kid.

[Tony Fadell]

Yeah, my grandfather taught shop class.

[Erica Barris]

Oh, seriously? A shop class kid. Okay.

[Tony Fadell]

He always had the mantra, if a human made it, a human can fix it and build other things, too.

[Erica Barris]

Tony's favorite thing to tinker with was computers.

[Tony Fadell]

It was your own world. You could make anything you wanted.

[Emma Peaslee]

And around the time Tony was In high school, mid-80s, computer geeks actually started to become cool.

[Tony Fadell]

In Rolling Stone, there was a huge article by Stephen Levy about the original Mac team. And I was like, oh, my God. There's computer guys like me, guys and gals like me building this thing that I love, the Macintosh, and they're in a rock and roll magazine. I'm like, superstars.

[Erica Barris]

He's 15, and he became obsessed with these computer engineers.

[Tony Fadell]

Oh, I could be like that. So they were my heroes. And so I would just track them obsessively. Yeah, stalking me, you could say.

[Erica Barris]

Tony went to college, launched a few startups, and he kept reading tech magazines. And then one day he saw something buried in the gossipy type pages in the back of one of those magazines. Tony learned his his heroes were working on this top secret project. It was at a brand new company called General Magic.

[Tony Fadell]

And I was like, general Magic, what? What is this?

[Emma Peaslee]

And he didn't care how, he just wanted in.

[Tony Fadell]

I had no idea what they were doing, but whatever it is, I needed to get involved.

[Emma Peaslee]

He found a number, started calling, sometimes 10, 15 times a day.

[Erica Barris]

This is your favorite band. You're like, I want to get on the road with the band.

[Tony Fadell]

Yeah, I'll be a roadie. Whatever it takes. I just want to be with this band. So. So after a six to seven month knocking on the door, getting rejected and pestering the hell out of everyone there, they gave me a job and I went crazy.

[Erica Barris]

Tony moved to Silicon Valley to work with his heroes. He was 21. His dream had come true. He was hired as a software engineer in the hardware team at General Magic to make the first smartphone. This thing that was going to change the world in 1991. Hello and welcome to Planet Money. I'm Erica Barris.

[Emma Peaslee]

And I'm Emma Peaslee. General Magic had everything. The vision, the talent, the money. But having everything might have been its undoing.

[Erica Barris]

Today on the show, what the push to create the first smartphone can teach us about how genius ideas come to life. Or don't.

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[Emma Peaslee]

General Magic was creating basically an iPhone, but in the early 90s.

[Erica Barris]

At that time I was carrying quarters around to use payphones. Computers were in like 15% of American homes.

[Emma Peaslee]

And yet here was General Magic creating this ultimate portable interconnectivity Device where from your Palm. You'd call people, send them faxes, you'd be able to buy things on it, book travel, navigate yourself around, play games. And none of this existed. Tony was part of the team that was building all of it.

[Tony Fadell]

We were creating the entire operating system. We were creating all the chips, we were creating the devices, we were creating all the network servers and network server software, all the user interface, all the applications. We were creating.

[Erica Barris]

That is a lot.

[Tony Fadell]

We were creating the touchscreen. We were creating everything in this little. All of it at this company.

[Emma Peaslee]

Research, development and engineering were all happening at once. And they had the talent to do it. General Magic was started by those rock stars. And they handpicked other budding rock stars to work there too.

[Erica Barris]

It was so exciting. General Magic even hired an in house film crew. Oh smile, you're on Candid Camera. Thep ended up making a documentary about the company. So we've seen footage of younger, long haired Tony hunched over a small screen with a bunch of wires connected to a keyboard.

[Tony Fadell]

I'm hooking up a demo so that we can see keyboards working with the device.

[Emma Peaslee]

He's building an early version of the usb.

[Tony Fadell]

Is it important if you want to hook up disk drives and things of that nature? Yeah, it's really important.

[Emma Peaslee]

Another employee, Megan Smith, was working on a touch screen. You can figure out where you are, whether you're touching T or whether you're touching a caps lock.

[Tony Fadell]

And how small will it finally be

[Emma Peaslee]

to you, like someday. Dick Tracy wristwatch.

[Erica Barris]

And the money was there to fuel all these experiments. The company's investors included all these telecom and electronics giants like Apple and AT and T and Motorola and Sony and Panasonic to name a few. They literally threw many, many millions of dollars at this Silicon Valley startup because they all wanted a piece of what could potentially be the, the next big thing. People from those companies would sometimes come visit.

[Tony Fadell]

They were just like mesmerized, like what is this you're building? They had no reference point. Cause it was so different than anything they had seen. So they're like, whoever these people are, they're really geniuses. It's really cool. I don't understand it. But we'll just keep them going because it's clear they think they know what they're doing.

[Erica Barris]

The employees called themselves magicians. And there was even a bunny in

[Emma Peaslee]

the office, an actual bunny named Bowser because of course, magicians need a rabbit. And Bowser, the magicians worked endlessly.

[Tony Fadell]

Just people programming whatever, at all times of the day and night, doing Things and say, come over here and check this out. People would be sleeping there overnight. We were there so often. The place smelled. You know, people would hang up their dirty clothes on the cubicle walls.

[Erica Barris]

Oh, gosh. Ew.

[Tony Fadell]

It was like a huge dorm room. Smelled like one.

[Emma Peaslee]

And their job was just to come up with ideas and try everything. And their bosses encouraged that.

[Tony Fadell]

I'm like, hey, I'm thinking about this. Yeah, that's a good idea. Go work on that. I'm like, okay. And then I'd show them. They're like, well, maybe a little bit more of this, maybe more of that, and then go off and do it.

[Erica Barris]

And the funders, those giant companies, they also had ideas. Tony would travel as far as japan to meet with Mitsubishi or sony, and those companies wanted the general magic device to work with their systems. So Tony would come back to the office, and they'd all keep tinkering.

[Emma Peaslee]

They had so much Cash that in 1994, they traveled around the country by private jet to show off their product. And they got lots of press attention.

[Tony Fadell]

Some say it's revolutionary. Others simply say it's magic.

[Erica Barris]

It was quite possibly the wildest. The money est the most creative company of its time, and Tony was right at the center of it.

[Tony Fadell]

It was the biggest sandbox, playing with the smartest, coolest geeks. You see our founders skipping through the hall and singing.

[Erica Barris]

So this sounds like ideal. Like, this sounds like the dream.

[Tony Fadell]

Yeah.

[Erica Barris]

And. And, yeah. Okay. So you're living the dream.

[Tony Fadell]

Living the dream.

[Erica Barris]

Tony was having the time of his life, But a few years in, he started to think there might be problems. Like they had not made anything yet. Nothing actually existed, and there was no real schedule, no real deadlines.

[Tony Fadell]

When I joined, they were like, we are going to ship this product in the next year to year and a half. Okay, sounds great to me. Well, 12 months goes by, and I'm like, okay, we're shipping a product. I'm just trusting everyone. I guess this is how you ship a product. I don't know.

[Erica Barris]

These guys should know.

[Tony Fadell]

I'm 22. Yeah, these guys know. They've done it before. So I'm just going to follow the lead. Then 18 months go by, and I'm like, wait a second. We're not even close to shipping anything. And then it was 24 months, and I'm like, what? Then it was, you know, 32 months.

[Emma Peaslee]

12 months turned into four years, and they still hadn't actually finished the product they had set out to build. And at that point, there started to be pressure Sony and Panasonic and Motorola and all those companies were like, hello, where is the product that we invested in?

[Erica Barris]

They had to get a product to market. So in fall of 1994, they finally did. And in true tech fashion, the company's leaders, the tech rock stars, held a big splashy show for its debut.

[Tony Fadell]

So welcome to the first public demonstration

[Emma Peaslee]

of General Magic's technologies.

[Tony Fadell]

I want to talk a little bit about.

[Erica Barris]

The device existed, the Sony Magic Link. Powered by General Magic, it was like a mini tablet, but chunkier. You could choose apps from a touchscreen while holding it in your hands and almost fit it in your pocket. General Magic played a promotional video and all.

[Tony Fadell]

It's a new way to reach just about anyone, anywhere, anytime, you're only a press of a button away. Sony Magic Link. And what it takes off your desk is only matched by what it takes takes off your mind.

[Emma Peaslee]

The future was here. The magicians, they had delivered. You could send a fax, track your checks, read a book, play a game

[Erica Barris]

like solitaire, all for the price of $800 in 1990s dollars. And there was just one minor issue.

[Tony Fadell]

This Magic Link ended up being the biggest flop in Silicon Valley for a decade or more.

[Erica Barris]

Yeah, they ran into a very econ 101 problem.

[Tony Fadell]

When customers press and everybody looked at it and they go, what is this?

[Erica Barris]

It is not enough to have supply. You gotta have demand.

[Emma Peaslee]

Less than 3,000 Magic Links were sold, mostly to family and friends of the Magicians. And within a few years, this company that was going to change the world became a distant Silicon Valley memory.

[Erica Barris]

How did that happen? How did this visionary idea become a nothing product? Well, that whole story you just heard, that whole story was the reason it became a nothing product.

[Emma Peaslee]

At least that's the theory of one guy who spent years researching what happens when people have too much freedom.

[David Epstein]

They were a spectacular failure because they had too much. They had too much talent, they had too much time, they had too many resources. They could do anything. And so they did do anything.

[Erica Barris]

David Epstein is a journalist and he says years later, when he got his hands on the thing, General Magic built this iPhone before the iPhone was actually pretty fun.

[David Epstein]

I mean, I played with a Sony Magic Link and it's definitely cool. But part of the problem was there was so much that it was incoherent. I mean, it shipped with a 200 page manual. Can you imagine getting a device like a phone book?

[Erica Barris]

Essentially, we first learned about General Magic from a book David wrote called Inside the How Constraints Make Us Better. David studied what made Dr. Seuss and Dr. Martin Luther King Jr. And Isabel Allende and NASA and Pixar successful. And his big theory that cuts across all of them is that to be creative, to be successfully creative, you need limits.

[Emma Peaslee]

David says what happened at General Magic is a great example of why people need constraints. And you can basically distill his takeaways into three lessons. Number one, they didn't have a clear customer in mind. They didn't have a problem they were fixing or a need they were filling. Basically nothing to guide what they were making.

[Erica Barris]

They did have an imaginary customer in their heads named Joe Sixpack. Basically a guy lazing on his couch with a beer, watching tv. What they didn't think about was what problem they were solving for him. Like, he didn't need email in his pocket because odds are Joe Sixpack didn't even own a computer.

[David Epstein]

Is Joe Sixpack gonna read a 200 page manual? I mean, I've read a lot of the manual. It's elaborate.

[Emma Peaslee]

They did test the magic link on a few real people, like Tony's mom.

[Tony Fadell]

My mom was a user tester. So my mom came to visit me. My mom sat in user testing. She's like, I don't get it. What is this thing for? It didn't work. Was it me? Did I do something wrong? I don't understand why I even need this thing. I was like, wait a second.

[Erica Barris]

Moms always know.

[Tony Fadell]

And I was like, yeah, who is going to purchase this? What problems are we going to solve for them with this? Why are they going to want to put their money down?

[Erica Barris]

Tony and David agree. Sure, the technology may have been ahead of its time, but David says a big part of what tripped them up was not having a clear picture of their customer.

[David Epstein]

It was a problem because it didn't tell them what to do and more importantly, what not to do. So if they had a very specific customer in mind and they identified some real customer problems, they would have had priorities.

[Emma Peaslee]

And the fact that they weren't listening to what customers needed was compounded by who they were listening to. That's the second problem David identified. Too much money. See, General Magic's idea was so revolutionary that it attracted the attention and money of a lot of powerful partners. You know those companies Tony was flying to visit, like Sony, Mitsubishi, Motorola, Philips, AT&T?

[David Epstein]

They covered so much of the communications technology world that whenever they had meetings, the meetings had to begin with an antitrust lawyer listing all of the topics that they were not allowed to discuss so they wouldn't run afoul. Of antitrust regulations.

[Erica Barris]

But what they were talking about was this product that they were locked into because they had so much investment from all these companies.

[David Epstein]

General magic probably would have done better to stay really, really, really small. It might seem inefficient to stay small for years, but that's when you're laying the groundwork and setting the boundaries and not letting the costs explode.

[Erica Barris]

Like, they hired way more people after Tony.

[Emma Peaslee]

There's this principle called Brooks's law. It's named after Fred Brooks, who was a computer scientist. He led the development of the operating systems that NASA used in the space program. And Brooks's law essentially says that when you add people to a project that that's already late, it's going to be even more late.

[David Epstein]

They spent a lot on people. They spent on offices. They had a gigantic bush in the shape of a bunny Even when they

[Tony Fadell]

were already having problems.

[Emma Peaslee]

The essentials.

[David Epstein]

Yeah, the essentials.

[Erica Barris]

And they spent a lot on materials. General magic was pretty much building everything from scratch. Like, at one point, Tony reinvented the technology that connected the remote to a tv. Even though that had been around for

[David Epstein]

many years, they were never forced to look around at the technological environment and say, what's realistic and what can we borrow and build on?

[Erica Barris]

I mean, what was the problem with all that?

[David Epstein]

The problem was because they had time, they had money, they really ended up kind of building for each other, almost. The engineers sort of trying to impress one another.

[Emma Peaslee]

Which brings us to the third and final big lesson General magic's failure teaches us. It's hard to make magic when you have no bosses and no deadlines.

[David Epstein]

Everyone who had a good idea, they did it. Like, they very rarely told someone, no, they couldn't do something.

[Erica Barris]

David says what they had were leaders.

[Emma Peaslee]

What was the difference between a leader and a manager?

[David Epstein]

To them, the leaders were legendary programmers. And so I think it was. We're going to listen to these people who are. Legends are our icons. But those people were not equipped to be giving them deadlines and help clarifying what they should be doing and priorities and all those things, either. They were off doing things that they thought were cool, but that weren't the priorities.

[Emma Peaslee]

Also games, emojis, sound effects.

[David Epstein]

Can I give an example of what I think was an emblematic case inside of General Magic? The engineer Steve Perlman, who was charged with creating a calendar function. And Steve wrote the calendar function to go from 1904 to 2096. And he checks it in and thinks he's done cool. And then one of the leaders of the company comes to him and says, steve, somebody might write historical apps. You have to write this calendar to go back farther. So he opens it up and writes it to go from year one to the future, okay? Checks it in, thinks he's done. Then another team comes to him and says, steve, why are you tying it into this arbitrary religious context? You should make it go back to the beginning of astronomical time, right? So that's how Steve Perlman ends up opening up the calendar function and writing it to go from the big bang

[Erica Barris]

to the future on a device that maybe doesn't yet exist.

[David Epstein]

And as he said, if he had stuck with 1904 to 2096, it would have been four lines of code and he could have moved on. But because they could do anything, they did, and everything always got bigger.

[Erica Barris]

Meanwhile, the magic link, what was supposed to be the first smartphone never delivered on its most basic promise.

[David Epstein]

This thing that was going to be a phone and a computer and more, didn't end up having a phone.

[Erica Barris]

And we can look at the magicians and go, wow, what a disaster. What a wreck, Too bad and move on. Or we can look at general magic the way Tony Fadell did as a blueprint for what not to do.

[Emma Peaslee]

After he left the company, Tony applied what he learned to future projects, like big projects, including the real iPhone. And in the most iconic features of those products he helped create, you can actually see and touch the lessons Tony learned. That's after the break.

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[Emma Peaslee]

In the years after leaving General Magic, Tony did a lot of reflecting about what went wrong, what made this company that had all the best people, all the money, all the possibility fail. He ended up writing his own book. It's called Build, where he talks about his time at General Magic and all the lessons he took away. He kind of turned what happened there into a list of everything not to do.

[Erica Barris]

A few years after leaving General Magic, he was hired by Apple to work on this idea. He had a portable MP3 player. When he had a prototype, Steve Jobs

[Tony Fadell]

saw it and he was like, oh, this is great. I really want to do this thing. Now you have to remember this is March 2001. Apple was $500 million in debt. Steve goes, I'm green lighting this project. We need to do this.

[Emma Peaslee]

But they were going to have to do it on a budget. And Tony says that ended up working in his favor.

[Tony Fadell]

You can have too much money, you absolutely. Because you don't have constraints to make you think hard. When. When you know the clock is ticking and the bank account is draining and you have to really understand what it is you're building, it focuses people.

[Erica Barris]

Right at the outset, Tony says he and his team knew what they were making and had a very specific customer in mind who wanted a very specific thing.

[Tony Fadell]

I want to take all my digital music with me everywhere I go. I want to take a thousand songs in my pocket. We knew exactly what that product needed

[Emma Peaslee]

to do at Apple. With a limited budget and a clear scope, Tony says he looked for ways to build on what was already out there.

[Erica Barris]

You didn't completely build it from scratch.

[Tony Fadell]

Yeah, I went to all the different big companies and small companies around the world doing MP3 to find the right processors, ground level software necessary, the right batteries, the screens, and everything else. So he's like, what are the Lego blocks I can get? Stick them together, add a bunch of software, add a bunch of things to make this thing work.

[Emma Peaslee]

Everything from the interface software to the chips to the batteries to the hard drive. Even the design in building the ipod. Tony thought of this Danish cordless phone he admired.

[Tony Fadell]

So I ran right to bang and Olufsen bought a couple, tore them apart and go, oh, yeah, yeah, that's just the optocoupler. Da, da da da. Like, I can just do that, no problem.

[Erica Barris]

The result was the classic ipod design with the wheel and the button in the middle. The lesson, literally, you do not have to reinvent the rotary wheel.

[Emma Peaslee]

And to make it, Tony gave his team deadlines. He was not just a leader, he was a manager. So day one, he told them, we're

[Tony Fadell]

going to need to do this by Christmas, which was less than eight months away. Why? Because Sony was the number one in every audio category. I knew how Sony worked. They're going to come out with something this Christmas, and if it does, that means Apple is going to be canceling this project. I was like, this is is going to have to work. We must ship by Christmas.

[Emma Peaslee]

And he says that big deadline wasn't the only constraint he set.

[Erica Barris]

Up.

[Emma Peaslee]

Lots of little deadlines, Tony and Apple got the ipod done and debuted it in months.

[Tony Fadell]

When we launched the product to world at Apple, literally two hours after that launch was done, Steve called me in and said, let's talk about the next one.

[Erica Barris]

Oh, wow.

[Tony Fadell]

Literally, we had not even shipped the one. He's like, I wouldn't even want to

[Emma Peaslee]

talk to you about the next one iteration. They kept tinkering with the ipod, kept releasing new models. Tony worked on 18 of them.

[Tony Fadell]

General Magic, we only got one. We only got one shot because it took so long, so many years. We had no more money, and so we never had the chance to make another go at it at Apple.

[Erica Barris]

All those iterations of the ipod eventually led to the iPhone, and Tony worked on that too. The first three iterations. Now we're up to the iPhone 7.

[Emma Peaslee]

After the iPhone, Tony went on to invent the Nest thermostat. And that was also wildly successful and kicked off an Internet of things revolution.

[Erica Barris]

A lot of Tony's colleagues at General Magic emerged out of that chaos to do big techie things. Some of them were early employees at Google. One of them invented the Android phone. Another one created ebay. One founded LinkedIn.

[Emma Peaslee]

David Epstein says when he first started researching for his book, the thing that most surprised him was was how the exact thing we imagine will get in the way of creative success can be the thing that makes it possible.

[Erica Barris]

Isn't it like what everyone says they want is no oversight, no deadlines. Like, we could be so free and so creative if we could just, you know, fling sand into the air and make something out of nothing?

[David Epstein]

Yeah, it's interesting because in any way, you cut it in the abstract, people say they want more freedom, and in reality, it's. It's often not good for them. Our preference for complete freedom in the abstract is often a mismatch with what actually gets the best work from us and makes us the Most satisfied.

[Erica Barris]

In David's book, he writes about Theodore Geisel, better known as Dr. Seuss. One of his most famous books came from a simple constraint. An executive at the publishing company told him he could use no more than 225 words from a vocabulary list for first graders to help them learn to read. Dr. Seuss picked the first two that rhymed and created the title for the Cat in the Hat.

[Emma Peaslee]

And this concept is a hallmark of his work. This constraints idea has been called the Green Eggs and Ham Hypothesis. That book has just 50 words. And the idea is when you have limits like that, you can do work that's more creative.

[David Epstein]

Constraints force you to do something difficult, right? You have to give up something or you have to find a way to do something that you haven't done it before. And that's difficult. But it's what psychologists call a desirable difficulty because you get the best out of yourself.

[Emma Peaslee]

We asked David, if constraints are so desirable, why do we humans so often think we want unbridled freedom?

[Erica Barris]

The idea of, like, you know, ideas will come to you if you just kind of run through a big field or whatever and just have all the money pouring down on you. Like, why does that, like, idea persistent?

[David Epstein]

Yeah, it's a good question.

[Erica Barris]

David says there's lots of ways to answer it, but there's one that really caught me because it's about how we're wired to want more.

[David Epstein]

Humans have something called additive bias. This is a cognitive bias that's probably a result of the fact that for most of human history, the main problem was having too little, not too much. And so it's likely that we are not well equipped to even understand when to intuitively say, like, oh, this is too much, and to cut back, you

[Erica Barris]

sort of have to force yourself to impose constraints in your life.

[Emma Peaslee]

No gods, no masters, but maybe deadlines.

[Erica Barris]

Listeners, we need your help. We want to know how the economy is working for you. Does it feel like things cost more these days? Groceries, gas, going on dates? And if it does feel that way, have you found any great life hacks that are maybe high, helping you get by? We want to hear from all of you. Send us an [e-mail] and maybe we'll call some of you up to chat.

[Emma Peaslee]

This episode of Planet Money was produced by me, with help from Sam Yellow Horse Kessler and James Sneed. It was edited by Marianne McCune and fact checked by Charlotte Isidore. It was engineered by Jimmy Keeley with help from Timofredo. Alex Goldmark is our executive producer.

[Erica Barris]

Big thank you to Sarah Caroush. Her documentary is called General Magic. Tony's book is called Build, and David's is called Inside the Box. I'm Erica Barris.

[Emma Peaslee]

I'm Emma Peaslee. This is npr. Thanks for listening.

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