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In the HuddleChat Debacle, a Lesson for Web 2.0 Startups

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Google’s decision to release HuddleChat — a ripoff of Campfire, the chat application created by 37Signals — and the kerfuffle that ensued almost overshadowed the release of its Apps Engine platform that HuddleChat was meant to showcase. Worried that it would be perceived as a Goliath (or as Mathew Ingram says, a bully), they decided to pull the app.

As far as I’m concerned, they shouldn’t have taken it down — the damage was already done. Secondly, a chat app is a chat app. HuddleChat may have looked like Campfire, but its functionality isn’t that remarkably different from chat apps of the past. IRC has been around forever. Todd Cochrane puts it best when he writes, “I have been using Web Based chat clients for years and they all look about the same. It’s not that complicated. Their are only so many ways you can spin something.”

What the folks from Google should have done was acknowledge 37signals for the design and UI, and thanked them for their vision. End of story. Why? Because 37signals is a company that adheres to the spirit of sharing and thanking folks who inspire them.

More importantly, what HuddleChat did was expose the soft underbelly of Web 2.0 applications — and by extension, many of the Web 2.0 startups. “Hi, a couple of our colleagues wrote HuddleChat in their spare time as a sample application for other developers to demonstrate the power and flexibility of Google App Engine,” is how the Google Apps Engine team describe their effort. Like Campfire, any Web 2.0 app can be easily replicated by a developer(s) in his/her spare time.

As open source takes hold — in the form of software, platforms and even the development environment itself — the ability to imitate will only increase. In such an environment, the only meaningful defense for Web 2.0 app developers and startups is their ability to build a community in large numbers. The data of a community is the only defense, and perhaps the only real value, in a Web 2.0 company. And unless they can achieve this quickly, many Web 2.0 apps/startups are going to meander into mediocrity, only to see their ideas inspire larger players to roll out their own versions of their apps.

Imitation is part of Silicon Valley’s history. Microsoft has done it many times, so has Apple. Why is anyone surprised that Google did it? I wasn’t. I fully expect Google, Facebook and other big platform owners to roll out their own apps and leverage their audience. Why shouldn’t Facebook release its own chat application and compete with some app developer? If HuddleChat had been made available for a few months, who’s to say it wouldn’t have lured Campfire users — both present and potential?

On the contrary, Google shareholders should be asking the company to imitate all of 37Signals apps. Jason Fried’s baby seems to be making a good living offering great SaaS apps. Google has enterprise ambitions, so why not offer their own twist (if not a Xerox copy) on what seems to be a proven suite of products to a larger audience? I think the HuddleChat episode should serve as a reminder for the Web 2.0 startup community at large: Google is in this to make money just like everyone else.

HuddleChat is just the canary in the coal mine.

18 Responses to “In the HuddleChat Debacle, a Lesson for Web 2.0 Startups”

  1. Om:

    I might have jumped to a conclusion, but I didn’t miss the point of your story. I have no basis to know that 37Signal would have been satisfied with open acknowledgement. I took your word for it. I was suggesting that having recognized their mistake, Google took a self punitive action, which tacitly recognized 37 Signal’s contribution.

    I am personally aware that how easy it is for an idea to be ripped. That was my point as evidenced by a recent post in GigaOm. I want you to recognize, even if you fail to recall, the idea was shared with the principals during Nov/Dec 2005, a prototype was shown a few months later, invitation based trial was rolled out a year later and the site is operational under open registration since last October. But the post talked as if a new idea is under development. Given the nature of technology, I am willing to settle for mere recognition. Even that is not forthcoming. For me that is the irony of this post. It is not clear whether you recognize this or not.

  2. Simmons

    I agree that imitation is commonplace and I don’t really have a problem with Google making a Campfire knock-off.

    However, I think everyone is missing the point of why Google took down HuddleChat. Google said it themselves: “…rather than divert attention from Google App Engine itself, we thought it better to just take HuddleChat down.”

    What makes a juicier story — a new webapp platform, or “Google steals ideas from small companies!!!”? With the media’s love of sensationalism, they’d be squeezing the HuddleChat story for weeks, instead of reporting on App Engine.

  3. Om, I agree that this is the canary in the mine for web 2.0 companies to wake up and realize that a business must have some real barriers to entry in order to succeed in the long term and you rightly point out that one of those is a large community base.

    This web 2.0 era is too similar to the dot-com boom in the 90’s where common business sense was thrown out the door for so many ventures. That is the real moral of the story but too many people are focusing on the smaller picture.

  4. Om, your first and second paragraphs contradict one another. I am a huge fan of 37Signals, but what “work’ are we acknowledging exactly? How would one visually distinguish a web-based chat application. 37Signals would do better to focus their attention on the multiple Ruby-based look-alike task managers out there competing against Backpack.

  5. @ Aswath,

    Clearly you missed the point. The point is that they should have acknowledged the work of 37Signals. Did you miss that bit before jumping to conclusions.

    What the folks from Google should have done was acknowledge 37signals for the design and UI, and thanked them for their vision. End of story. Why? Because 37signals is a company that adheres to the spirit of sharing and thanking folks who inspire them.

    The big issue here is not that Google built a copy cat and then pulled it. The big problem for all little companies is that their ideas are so easily rippable. This wasn’t the case in non-consumer web tech start-ups where there was something to defend. In this case, why shouldn’t Google offer something and let the market decide. In my opinion, the market always does decide.

    YouTube won over Google Video and Google had to pay $1.6 billion to buy simplicity.

  6. This dismissive position is consistent with the industry prevalent thinking. One can not imagine that academic world will tolerate non-attributing culture. Chat may have been there before. Supposing they were indeed inspired by 37 Signals’ UI. Many people seem to agree that they are not patentable. But it would have been a nice gesture to openly recognize that. Especially when you are a big banana.

    Supposing you are talking about turning the concept of address book on its head when there is an implementation of it already. Isn’t it fair to recognize that implementation? Such a misstep will not be tolerated in the publishing world. For sure it has happened before in the business world. But Internet is supposed to be different. Google is to be commended that they punished themselves to the extreme for a “small” misstep. I only wish GigaOm follows that lead.

  7. With a zillions of PhDs that Google have, Can they be different than a 10-odd army?

    Why does Google need an imitation art?

    HuddleChat puts Google in a wrong corner, not because of choosing imitation but not putting enough innovation in their first Enterprise showcase.

  8. @ Adnan

    in continuing “agree” chain, I agree. But I think the problem is bigger than just Huddle Chat. I think this is going to happen more and more often in the near future.

  9. Usually I do not leave comments which only say “I agree”, but here I have to. However, I feel that here Google made the bigger mistake of pulling down the app and implying admission of guilt. What is going to be their policy regarding such applications and complaints in the future? Are they going to leave it to the developers to take down the app or are they going to do it themselves. The message at is signed “The Google App Engine Team”!

    Of course, TC already says the same thing

  10. The “Look and Feel” wars were fought in the 80’s and 90’s (Apple-Microsoft-Borland-Lotus etc.). Nobody ever won that argument unless someone was stealing source code or scraping a substantial amount of identical text.

    37Signal’s looks ridiculous to be complaining about someone else “copying” their product. Let your product speak and stand for itself. If someone can offer more value at a lower price, your product doesn’t deserve to win.

    I think Google should have also released the Huddle Chat source code; let a thousand flowers bloom by letting the 10,000 developers who got AppEngine accounts make HuddleChat derivatives.