Real World API Business Models That Worked
Mark Boyd, Writer, ProgrammableWeb
What business revenue models are most successful for API providers seeking to build active third-party developer communities? How much can an API act to leverage revenue growth and market share, and what timeline for success is realistic? This presentation goes beyond the theory to share some initial data on what businesses are experiencing when implementing an API strategy.
This presentation summarizes the critical success factors from 15 API business case studies including:
- Type of business model used and revenue-share data against cost estimations
- What developer engagement strategies grew API usage the fastest
- What factors reduced churn rate amongst third-party developers
- Developer onboarding timeframe
- What factors influenced internal support for an API strategy
6. Walgreens (photo printing service API)?
+40% of photo
printing revenue is
from API channel
http://www.slideshare.net/apigee/getting-digital-ready-day1-ceo-keynote
10. Research Methodology
3. Identify business model typology
http://www.slideshare.net/jmusser/j-musser-apibizmodels2013
11. Research Methodology
4. Desktop research: Calculate size of dev audience
• Active devs in Support Forum
• Tally of applications/devs mentioned in all blog
posts
• Any marketplace listings of apps built with API
• Twitter, FaceBook, YouTube followers/views
• GitHub followers
12. Research Methodology
5. Other indicators
• Current positions vacant for API developer team
• Developer feedback on “Time to Hello World”
• Any revenue data eg. App Annie stats
and…
• Whatever the API providers are willing to share
(i.e. not much!)
13. Initial Findings
Being confirmed with APIs studied and industry leaders
1. Developer numbers don’t need to be huge
2. Have a clear business model with revenue-sharing
arrangements described
• Strong dev engagement culture more
profitable
3. Some best practices are still on the to do list
15. Have a Clear Business Model/Rev-Share
• Developer Pays = Pay as You Go on API Calls
• Developer Gets Paid = Rev Share
• Developer Pays = Freemium
• Developer Pays = Transaction Fee
• “Free for now and we will see what happens”
16. Those with a Clear Rev Share Model Also
Have…
• Early adopter policy: very early beta testing
approach with partners
• Quicker to start splintering dev engagement
between partners (commercial consumers) and
third party devs (innovation/experimental cases)
• Showcase pages/Marketplace that increase dev
revenue (qualified leads)
17. Best Practices On To Do List
• Developer Market Funnel Analytics: what resources/
support do commercial devs use most?
• Discoverability low:
• Limited use of description languages
• Limited use of SEO or PPC
• Some signs of move towards naming all APIs as if for
external consumption from the get-go (customer can
understand intuitively)
19. Stay Tuned!
• Confirming individual datasets with each of the API businesses
analyzed
• Reviewing overall study with API industry stakeholders to
confirm analysis/summary findings
• Ebook from ProgrammableWeb
• Interactive tool to help devs assess whether to consume an
API based on the API provider business model and
likelihood of revenue generation!
• Building up longitudinal study of progress for each API and
adding more…
20. Thanks to…
• Holger Reinhardt
• David Berlind
• Joe Rago
• Ronnie Mitra
• Sangeet Paul Choudary
• John Musser
• Emer Coleman
• Podio Team
• Chris Traganos
• Michael Skok
• Bruno Pedro
• Jack O’Hurley
• Manfred Bortenschlager
• Nicole Castillo
21. Want more?
Follow Mark Boyd on ProgrammableWeb
@mgboydcom
!
!
!
!
markboyd@mgboyd.com