One of our customers is a YC company, that moved their group chat from a IRC based system to our XMPP based group chat product, because IRC did not work well for them. After they started using us, we figured that some people still preferred IRC and some wanted the ease of use of XMPP. The solution was a simple bot that will bridge the messages between the IRC channel and the group chat. This is now working out very well for them.
They now have benefits of both IRC and XMPP on their website. I'll be happy to talk more details and possibly collaborate. My email in profile.
 - https://groups.gaglers.com/
Makes less sense to blame the people, rather than lay blame to what they did (or did not) do.
It sounds to me like you are judging the founder. Not that I would disagree with you.
Don't get me wrong, I think Leah is awesome. She just builds up companies for soft landings/aquihires and pockets some money along the way. There is no reason a viable company couldn't exist on the grove model.
Some people go live on a farm and herd sheep, I herd servers.
Another thing I took away from that is that closed source software dies with their author. Open source lives forever.
What I mean is this: A lot of people I want to invite into chat, it's an experiment for them and they aren't really committed.
Oh, I have to install IRC software? Sorry, too much work.
Oh, I can't access it from AIM/gchat/etc? Sorry, too much work.
These are the people I want to onboard, so they can see the value in participating in my chat room.
What is the tool that allows me to attract anyone to the chat room, without them installing new software?
I would wonder if it's possible to support people using their own desktop client, while others alternatively use a webpage on the site which connects into the same IRC channel.
I think web based, non IRC, solutions have that covered really well.
2. Being a standard open protocol makes IRC better than any alternative anyway. Can you use Hipchat on a graphing calculator? You can use IRC on one.
Though I love IRC, I do wish it has some features present in things like Hipchat.
shameless plug: We're offering hosting for Quassel(cores), a distributed IRC client that enables access to the same user/backlog from multiple different devices: http://woboq.com/quassel.html
Whether you market it as "IRC++" (like Grove), or "HipChat with IRC support", is another question, but I'd love a service that had a great IRC (and maybe XMPP) interface, plus all of those features.
The CTCP portion of IRC makes it possible to do just about anything you want, as long as both parties are using clients that support the action.
TRC offers persistence via ZNC. Some of the other points are offered by some clients.
File sharing is a work in progress for TRC, but a very important feature to me.
Inline media, file uploading/sharing, mobile messaging, persistence, log searching, APIs, etc, etc can all be achieved with IRC and is actively being developed with the kiwiirc.com client that this startup is using giving it a great start.
http://trash.io/room/whatever_you_want to make a new room
realtime, drag and drop images, youtube, vimeo and multiplayer html5 games.
ws, redis, on top of a rails app on heroku.
Of course, if you care enough about that you shouldn't be using any exterior service.
I like the IRC style of chatrooms as it's familiar to me, but as others have already stated, I would prefer a service that provides additional features (ala HipChat or Campfire) such as file sharing, searchable history, and allows attendees to jump on a video call. Bonus points if you allow users to join over the phone as well.
We use Google Hangouts for video conferencing with my team of 3 (all remote), but we have to keep a campfire session open for sharing files and links relevant to the discussion. Even with this set up I'm missing a way to join our ad-hoc conference calls over the phone when I'm away from my computer.
This might actually be useful sooner rather than later.
One thing I'm working on is file sharing. This already works in the web client. Desktop is going to be tricky, involving DCC probably.
Currently my search/history story is not so strong, but that's also being worked on: https://github.com/znc/znc/pull/325
Word of advice: don't all pick demo1.
On the web client you can upload files to S3. Logs are stored on local disk though.
Web interface for logs is being worked on: https://github.com/znc/znc/pull/325
At 10 people, it's already cheaper than other services, which usually charge a few bucks per user.
This is bad. You're throwing resources away and increasing your management overhead. It would make more sense to have some sort of bouncer-type proxy to determine the source then route through to a dedicated ircd instance on a shared box (e.g. x ircd instances, one per customer).
I love this idea, though. I just feel that your approach of giving a full VPS is a bad idea. People who want a full VPS will buy a full VPS for much cheaper than the 20GBP you're offering it for.
What you need to do is multi-tenant your hosts, and isolate them from each other. Then you'll get costs savings that you can pass on to your customer; which will put you in line competitively with the likes of HipChat and Campfire.
Great idea, can't wait to see what comes of it!
also what authentication options are available I can't seem to find a mention on the site
A great many companies are "bootstrapped", which means the founders kick their own money in initially (or scrounge from friends and family). Many big companies, a recent example being GitHub, were started this way.
"Have you quit your day job?"
Many people wait until they see some traction before quitting. Doesn't make it any less of a startup. Consider it a consulting gig while launching the business (unless you don't consider it a startup if people consult on the side)
"Are you seeing startup like weekly growth?"
You are falling into this paradigm trap. Not all companies see hockey stick growth initially nor do they aim to. Most sustainable businesses I can think of started slow and gradually grew up. Nothing wrong with that.
According to "The World Defined by Btipling". Most of us haven't read that book and don't care.
Have you talked to investors?
Who cares? Maybe he's self-funding it. Having outside investors isn't an absolute requirement to be a startup.
Have you quit your day job?
Who cares? Maybe he's bootstrapping the startup in his spare time while still working a dayjob. Maybe not. What f%!#ng difference does it make?
Are you seeing startup like weekly growth?
There is no such thing as "startup like weekly growth". Not all startups are going to fit the exact same model in terms of revenue growth, user growth, or whatever other metric you care to pick. And as far as that goes, he may be pre-revenue altogether. But none of that changes whether or not his thing is a "startup".
Edit: I think you also misunderstand the value proposition for your customers: you mentioned above that you should buy because you get "a full VPS, maintained by me", which is very odd.
You could argue that he isn't competing against Hipchat, etc., but competing to convert current non-users of this kind of technology.
If they come out targeting other startups and technology companies, then I'd agree the odds are long. But come out targeting textiles manufacturers or transformer manufacturers, or shipping / trucking / railroad companies, or any of a bazillion other industries, and they may just have a shot at establishing a beach-head. Especially if they are willing to provide some vertical specific aspects to specifically appeal to customers in specific niches.
I'm curious though: how big are you guys? I only mentioned HipChat and Campfire as they appear to be pervasive, and while I've been hearing more and more people mention Flowdock, it doesn't seem like you're an 800 pound gorilla that he should be afraid to compete against (yet!).