You know what good developers do when a competitor launches?
Add new features. Improve the product. Make it do more. Make it kick ass. Put more work in. Make it scale better. Make sure your product is far better than the competition. Integrate it with other useful tools... etc etc. Maybe tackle a few "hard" problems.
Bad developers whine and complain that their product has been stolen.
The funniest thing about 37signals' Campfire coup is watching people trying to deny that it worked, or complaining about how unfair it was. As if there was some sort of moral obligation to remain meek and silent in the face of your competition.
Many people seem obsessed with the fact that Campfire is so much easier to write than, say, Mathematica. And so it is, particularly after 37signals gave away the toolkit to do so. But if you're trying to make money with a chat app, building it is the least of your problems: There's probably thirty or forty chat apps sitting on Sourceforge right now. Your biggest problem is Metcalfe's Law: nobody wants to use a chat app which their friends aren't using. What you need is publicity. Ideally, you want to convince half the readers of Techcrunch to try out your chat app in the course of a single week.
Google handed 37signals that publicity on a plate, and they ran with it. Complaining about your product's imminent extinction at the hands of a mean, nasty corporate behemoth might be a good idea even if your competition is Microsoft -- obviously, your odds of getting those guys to back down are infinitesimal, but at least people might hear of your existence, it might be better to burn out than to fade away, and you never know: Maybe there will be room for more than one company in your product space, and if you play your PR cards right you might emerge with a reputation as the "classic", "alternative" brand and be able to ride Microsoft's coattails to fabulous wealth. Or modest wealth, anyway. This is how Apple Computer managed to stay alive long enough to be rescued by Steve Jobs.
But 37signals got extra lucky because their opponent was Google, which treasures its reputation as a kinder, gentler company that is certainly not mean like Microsoft, and is unwilling to tarnish that reputation over what (to them) is a simple demo app. So, when challenged, Google folded immediately and left 37signals in possession of the field. More importantly, Campfire is now a household word, at least in households where people read Techcrunch or Digg.
Meanwhile, you're welcome to try to compete with Campfire yourself. Bolt on features, make it do more, add plenty of nifty-looking toggle switches and a skinnable interface, make it scale so well that it runs on a netbook, etc. Go nuts. Don't skimp on the work if you don't want to: Work day and night! Just don't come crying when you can't make any headway in the market because it turns out you've been working on the wrong things.
There's almost no discernable network effect for Campfire; a Campfire room can only support a limited number of users, so even if your friends use Campfire, you're probably not talking to them over it.
In the world of chat, Campfire is pretty small. It's pretty funny for you to say they are in possession of the field - they've only done 10m chat messages since they started!
Some random math:
Been going almost 3 years - 1000 days odd
10m messages sent! (From website)
That's an average of ONE message every 10 seconds.
I've always sort of wondered who uses Campfire... Don't get me wrong, I'm not saying it's a bad product, but it's never struck me as something that was really missing from either my work life or my personal life.
It only makes sense if you are in the 37Signals work universe already... If you have Basecamp, and you spend a lot of your time on your Basecamp page, using Campfire to chat with others who are in your Basecamp page makes a lot of sense - especially if you are behind various corporate firewalls that might block other chat/IM clients.
Strong disagree; most of the Matasano people who use Campfire have little or no exposure to other 37signals products.
It's just a very solid, inexpensive private web chat that we don't have to host ourselves. It works everywhere, unlike IRC, SILC, and AIM, which almost everyone filters. It is completely brilliant for conducting meetings. We're all smart people; could we have built a substitute? Sure, if we wanted to be in the chat business.
Fair enough, although it raises the question - is its obscurity its entire comparative advantage? I suppose additionally, since it is a paid product (with the free version having severe limitations) it is unlikely to be popular enough to draw the ire of the IT folks, and everyone has a client installed already (browser).
IRC is an ancient, rickety piece of crap, and a disproportionate amount of IRC server functionality addresses problems most people do not have, like synchronizing multiple relay servers. I grew up on IRC, have spent a lot of time in the ircd source code, and I can't imagine why anyone would waste time using it in 2009.
So, I think along with "time" and "expertise", you should also add "tolerance for needless pain".
You know, last time I checked, the BSD devs were still using icb. Maybe Campfire is also for the people without the time or expertise to set up icb. =)
You're on crack. IRC is not the most used groupchat protocol on the Internet. Most Internet users have never heard of IRC, but the overwhelming majority of them have an IM address somewhere that does group chat.
By "in use on millions of websites", I presume you're cheating by saying that any website that mentions IRC is "using" IRC.
If you were building a website, would you use HTML, which completely sucks and is an abomination, or would you create a fantastic new system with its own browser?
I'm doing some IRC stats for langpop.com, and if you want technical help, someplace like Freenode is still the place to be. Where can you get Ruby help on IM?
It's not my fault you're building a company on a protocol from 1989. =)
You know, I made the same mistake in 1998; we started (and got funded) a company that basically took IRC and:
* Added arbitrary TLV encoded data to messages
* Used link state routing to solve the netsplit problem
* Used FEC to provide reliability over the resulting mesh network
But even though you've kept current on IRC and I wrote it off a long time ago, I'm pretty sure I can still win an argument that IRC is archaic and ready to go.
Oh I totally agree, the world did not need a BitTorrent/IRC combination in 1999, or in 2009.
But the world certainly wants to be able to upload files and images into group chats. No user cares about IRC; they want group chat to be easy as using a website.
My 1999 startup did not fail because I made the wrong bet about the ancient IRC protocol. IRC isn't "growing" just because you stuck a web front end on it and started counting page views. Like I said, the overwhelming majority of your users could care less what the protocol is behind it.
You are the opposite of right; IRC is dying, and will be replaced with web chat systems with backend protocols nobody thinks about.
Why would I count page views? Counting profit is much more fun.
I think you'll see an explosion in online webchat this year and next, and IRC will be one of the clear winners.
I don't like the protocol, it's a complete mess to be honest, but that's what'll happen.
It's pretty funny for you to say they are in possession of the field
Ah, I should have gone ahead and written "the field of battle", which is what I meant. Which, in this case, was their own small piece of turf, not the entire world of online chat. Obviously they don't dominate the world. Nor do they seem to want to. They seem perfectly content to own their particular chat niche, and they probably would be happy even if that niche were little more than "users of other 37signals products talking to each other".
You are right. Although the guys at 37s are good developers, their business is not writing software. It is to write as little as possible and to squeeze as much money as possible from the result through their promotional materials. Nothing wrong with that, but they cannot be compared to Google or MS as a software development company.
Presumably then in your universe, Microsoft's goal is not to squeeze as much value out of their software as possible. Also, apparently, the business of converting lines of code to money is not the business of writing software.
"Meanwhile, you're welcome to try to compete with Campfire yourself. Bolt on features, make it do more, add plenty of nifty-looking toggle switches and a skinnable interface, make it scale so well that it runs on a netbook, etc. Go nuts. Don't skimp on the work if you don't want to: Work day and night! Just don't come crying when you can't make any headway in the market because it turns out you've been working on the wrong things."
"You know what good developers do when a competitor launches?..."
Good Internet entrepreneurs might do this. Good developers might be good Internetentrepreneurs but then again , they might not be. I know I'm a pretty good developer and I have some ideas about cool web applications which might make some money and some ideas about the most effective ways to compete. But, you know something? I won't kid myself that my development skills or my native intelligence would automatically tell me how to respond to competition. I respect marketers, managers and investors who literally make it their business to know how to compete.
Add new features. Improve the product. Make it do more. Make it kick ass. Put more work in. Make it scale better. Make sure your product is far better than the competition. Integrate it with other useful tools... etc etc. Maybe tackle a few "hard" problems.
Bad developers whine and complain that their product has been stolen.