Did you know that your teenager wasn't the first person to cleverly fool a live zoom call? That distinction belongs to Rudi Kompfner, a brilliant Bell Labs engineer who fifty years ago hacked one of the most hailed technological advances of the day by "positioning a still photograph of himself in front of his Picturephone (the image showed Kompfner to be remarkably attentive and invariably interested in whatever was being said) so that he could move about his office during a chat." (This story, and all quotes below, from "The Idea Factory")

If you're surprised to hear that someone was trolling coworkers using clever background effects fifty years before Zoom hit the market, you're not alone. Why haven't you heard of this groundbreaking device? The Picturephone is a great example of the perils of market research.

“The trouble with market research is that people don't think what they feel, they don't say what they think and they don't do what they say.” - David Ogilvy

Leave it to Ogilvy to perfectly summarize a complicated truth in a pithy quote (one of my all-time favorites is the subject of this earlier post). Its wisdom has been demonstrated countless times in my world, and I love referencing the Picturephone as a shockingly-unfamiliar historical warning.

In 1964, AT&T unveiled their futuristic new product at the World's Fair. People lined up to use the novel machine - it was essentially a dedicated landline Facetime device ~50 years ahead of its time. It was also a categorical failure. But lest we accuse Ma Bell of neglecting to do her homework, please note:

"AT&T executives had in fact decided to use the fair as an opportunity to quietly commission a market research study... researchers asked 700 users of the Picturephone for their reaction to its design and technology; they also asked whether they might want to use the Picturephone in the future. The overall reaction, summarized in a company to report, was termed 'generally favorable'...

A majority said they perceived a need for a Picturephones in their business, and a near majority said they perceived a need for a Picturephones in their home."

Business customers especially seemed willing to pay, as well: 29% said they'd be interested even if the cost was $60-$80 / month. AT&T continued to commission research on the product through fall of 1967 via surveys of 99 corporate and non-profit professionals.

In a speech he gave in 1968, Jim Fisk, then President of Bell Labs, declared "The trials of Picturephone have now progressed to a point where any skepticism as to its interest and utility is only a replay of the skeptical response which greeted Alexander Graham Bell when he tried to promote the telephone over 90 years ago."

What an incredible overstatement. "Within about 12 months, Bell executives saw that the anticipated demand for the Picturephone service was not materializing. In a speech to Bell Labs department heads in March 1972, Julius Molnar went through the results: 'Most of you probably know that attempts to introduce it in Pittsburgh and Chicago have hardly been howling successes. In Pittsburgh after a year and a half there are only eight paying customers with 30 sets in service... After a vigorous sales campaign (in Chicago, including a 50% discount to the service), they had 46 customers with 166 sets in service, with another 128 sets on order.'"

Just a few years later, the same pioneers who invented the Picturephone envisioned mobile phone service as well - you know, a little thing called a cell phone? Alas, the early research wasn't promising... "A marketing study commissioned by AT&T in the fall of 1971 informed its team that 'there was no market for mobile phones at any price.'"

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