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One of tech’s most successful inventors never made a cent

April 11, 2013, 2:15 PM UTC

Dave Smith should be a billionaire or, at least, a mega-millionaire well into early retirement. He should be hitting the links three times a week, taking his yacht out into The Bay, and “dabbling” in angel investing in his spare time. In Silicon Valley — where finding a successful tech entrepreneur is easier than finding a Starbucks — Smith should be one of the legends. But he isn’t.

It was Smith who co-created the Musical Instrument Digital Interface in 1983, simply known as MIDI to the musical world, along with Ikutaro Kakehashi, the founder of Roland. MIDI allows electronic instruments and synthesizers to communicate, meaning a user can control multiple electronic instruments from one synthesizer or computer. It’s this connection that forms the basis of most digital music. While the technology is used by composers and musicians in creating award-winning compositions and movie scores, it’s MIDI’s versatility that really matters. Making a home video on Apple (AAPL) iMovie? MIDI has been in the MacOS since 1995. Do you carry around a smartphone? (Humor us.) MIDI technology is in that, too. It powered the first wave of musical ringtones. Video games like Guitar Hero boast MIDI technology, as do the Bellagio Fountain and Treasure Island Pirate shows on the Las Vegas Strip.

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It’s ironic, then, that MIDI’s widespread success is also the very reason Smith isn’t sitting on a fortune: He made the technology free. It’s hard to fathom today, but when Smith collaborated with a handful of Japanese companies — including Roland and Yamaha — to bring MIDI into the world 30 years ago, he skipped the licensing fees, instead offering up his idea for the world to steal. “We wanted to be sure we had 100% participation, so we decided not to charge any other companies that wanted to use it,” says Smith. It’s nearly impossible, then, to determine the technology’s monetary value, but its value to the music industry cannot be understated, says Tom White, President of the MIDI Manufacturer’s Association, who believes MIDI is the most important technology in the history of music. “[MIDI] hasn’t earned any revenue,” he added, “but by putting the technology in products, it makes the products more valuable.”

As electronic synthesizers and keyboards were beginning to take off in the late ’70s and early ’80s, Smith realized that there was a major issue: Technology from different manufacturers couldn’t communicate, meaning collaboration between musical minds could be roadblocked if one user had a Roland while another had a Yamaha. Smith was operating his own company at the time, Sequential Circuits, and had created a synthesizer known as the Prophet 5 in 1978. (Even this technology was groundbreaking: The Prophet 5 was one of the first commercial instruments with a microprocessor, allowing musicians to save sounds and play multiple notes at the same time.)

After calling for a universal digital interface at the 1981 Audio Engineering Society Convention in New York, Smith created a rough version of what he hoped the new product would look like, calling it a Universal Synthesizer Interface, or USI. He then held a meeting for all those interested in actually building a product at the 1982 National Association of Music Merchants (“NAMM”) Show in Anaheim. “I basically said, ‘Everybody needs to come together and design something,’” says Smith. “’It doesn’t have to be [USI], this is just a starting point, but we have to do something.’” Only a handful of people showed up, but among them was Kakehashi. One year later at the 1983 NAM Show in January, Smith displayed the collaborative result in a low-key demonstration at his company’s booth: He connected Sequential Circuit’s Prophet 600 to Roland’s Jupiter 6. MIDI was alive.

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Now 30 years later, MIDI continues to operate the same way it did back in 1983, a jaw-dropping feat considering the rate at which technology standards are scrapped or eclipsed. Instruments may be connected by USB cables now instead of bulkier cords and plugs, but the technology inside remains unchanged. Smith, too, remains unchanged in a lot of ways. He still works in the manufacturing business — his new company, Dave Smith Instruments, started in 2002 and has eight employees in a small second-floor office in San Francisco’s Little Italy neighborhood. They begin shipping their newest product, the Prophet 12, in May. (Smith sold Sequential Circuits to Yamaha in 1988 to avoid bankruptcy.) Of course, his MIDI connection still offers a few significant perks. Smith, alongside Kakehashi, received his first-ever Grammy at this year’s awards ceremony for his creation of MIDI. He met his favorite band, Radiohead, backstage at a recent concert, and even watched on as Taylor Swift’s keyboardist used his new Prophet 12 during the singer’s Grammy performance in February.

Smith at times questions his decision to forgo licensing fees for MIDI, but ultimately comes back to the same conclusion. “It seemed like an obvious thing to do at the time,” he says, “and in hindsight, I think it was the right thing to do.” In the world of technology, that makes Smith a different kind of legendary.