In the HuddleChat Debacle, a Lesson for Web 2.0 Startups

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.