In a larger organization, you inevitably have a more hierarchical management structure, as well as multiple projects going in parallel. Prioritization and scope creep become significantly more difficult to manage. Only a small and specialized group of people talk directly to customers, which breaks the feedback loop you're talking about. And it's much easier for an individual engineer to go down an unproductive technical rabbit hole.

Many product categories are not well matched to the rapid iterative development style you are describing for your server side chat system, due to the significant costs involved in updating products that are already deployed.