Real World API Business Models That Worked

Preliminary findings from a research study into API business models

@mgboydcom programmableweb.com

What is the secret sauce behind…

Fyndiq (Swedish e-commerce)?

API introduced

http://nordicapis.com/fyndiqs-private-partner-and-public-apis-drive-business/

WePay (platform payments API)?

https://siteanalytics.compete.com/wepay.com

revamped dev pages

TransportAPI (transport data)?

Developer numbers

Walgreens (photo printing service API)?

http://www.slideshare.net/apigee/getting-digital-ready-day1-ceo-keynote

+40% of photo printing revenue is from API channel

API Business Models Reviewed• Fyndiq

• WePay

• TransportAPI

• Walgreens Photo Printing

• Fitbit

• DHL

• Pebble

• Gengo

• Evernote

• SeatGeek

• Sears Product Details

• SchedJoules

• Contentful

• Indeed

Research Methodology1. Business Model Canvas Mapping

Research Methodology2. Plugged in to Launchd.io

Thanks Holger!

Research Methodology3. Identify business model typology

http://www.slideshare.net/jmusser/j-musser-apibizmodels2013

Research Methodology4. 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

Research Methodology5. 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!)

Initial FindingsBeing 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

Dev Numbers Don’t Need To Be Huge

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”

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)

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)

What Next?

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…

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

Want more?Follow Mark Boyd on ProgrammableWeb

@mgboydcom !!!!

markboyd@mgboyd.com