0
Lead to Win
    How to lever open APIs
              May 2009


    Michael Weiss and Peter Carbone



1                  ...
Objective

    • Upon completion of this module, you will know:
       – difference between APIs and open APIs
       – ho...
Agenda

    • How to lever user contributions
    • Using open APIs to your advantage
    • Adding mashups to your toolbox...
Value creation in Web 2.0
                    the business model canvas wall poster
       key •         Web 2.0key basis ...
User participation

    • Value co-creation is a foundation for Web 2.0
    • Users contribute most of your content
    • ...
Flickr

    • Users can upload photos and add metadata,
      organize photos, link to maps, print
    • Freemium business...
Flickr's value proposition

    • Public sharing as default norm (CC-BY)
    • Users can share photos and knowledge: enabl...
Create a user contribution system

    • Participate in user contribution systems
    • Communicate value through small ex...
More examples

    Company      Value creation activities
    Twitter      Provides API that allows external developers to...
Open APIs

     • Range of API motivations and implementation
        – Extend product: plug-ins, application API, and SDK...
Benefits and risks of open APIs

     Benefits                         Risks
     Creates opportunities to        Somebody c...
Design principles for open APIs

     • Learn from other APIs (consider mimicking a big
       API, as this makes it simpl...
Unbundling and IT
 Communications + recombination
                                                                        ...
Ways to lever open APIs

     • Open APIs allow unrestricted experimentation
     • Open APIs can be used by anyone for an...
Mashups

     • A mashup is an application that combines data
       or services obtained from multiple open APIs



     ...
Mashup development model

     Role       Create           Search          Maintenance

     Component Chooses data     Wr...
How mashups can be used

     Use              Description
     Integration      Wrapping around legacy components, extrac...
18   Lead to Win
Issues to watch out for

     • Maintenance (adjust to changes in APIs)
     • Dependencies on APIs (service level, availa...
Key lessons

     • Create value outside your core product by
       exposing your data or functionality
     • Don’t try ...
Further readings




21                 Lead to Win
References

     • Briggs, C. (2009), Web 2.0 business models as decentralized
       value creation systems, chapter 3, 3...
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Day 2 Morning - Open API (Weiss and Carbone)

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Transcript of "Day 2 Morning - Open API (Weiss and Carbone)"

  1. 1. Lead to Win How to lever open APIs May 2009 Michael Weiss and Peter Carbone 1 Lead to Win
  2. 2. Objective • Upon completion of this module, you will know: – difference between APIs and open APIs – how to lever user participation and benefit from exposing data and functionality – lever mashups and issues to be aware of • And you will be able to: – determine how to use open APIs as part of your offer 2 Lead to Win
  3. 3. Agenda • How to lever user contributions • Using open APIs to your advantage • Adding mashups to your toolbox 3 Lead to Win
  4. 4. Value creation in Web 2.0 the business model canvas wall poster key • Web 2.0key basis for business modelscustomer as value centered customer partners proposition segment around decentralized value creation relationship activities what key activities do you what type of relationships Customer your customer does need to perform in your business model and how expect you to establish easily can? and maintain with him? what can partners do which one of your what are your custom better than you or at a customer’s problems are needs, problems, des lower cost (and thus you solving and which leverage your business Create value key Extract and needs are we satisfying? distribution Locus of value and ambitions? model)? resources create value channels (Relations) Company Product Locus of value what key resources does through which means your business model does your customer want require? to be reached and Briggs (2009) addressed by you? 4 Lead to Win cost revenue structure
  5. 5. User participation • Value co-creation is a foundation for Web 2.0 • Users contribute most of your content • You provide a context for interaction: eg tools for sharing and organizing content • Contributions can be active (uploads, resources) and passive (clickstreams, transactions) • Examples: Flickr (photos), YouTube (videos), Skype (resources), InnoCentive (R&D) 5 Lead to Win
  6. 6. Flickr • Users can upload photos and add metadata, organize photos, link to maps, print • Freemium business model: free + premium • Low marketing costs, low operating cost + ad revenue, revenue from premium services • Network: number of users (amateurs, bloggers, editors, professionals), traffic, and feedback • API turns Flickr into a platform: users can create mashups, third parties build applications 6 Lead to Win
  7. 7. Flickr's value proposition • Public sharing as default norm (CC-BY) • Users can share photos and knowledge: enables community members to learn from each other • Users create categories, events, and groups • Flickr meets needs of underserved users (photo storage, knowledge pool, ...) • Value increase is natural by-product of use • Value proposition evolved: introduce open API, add mapping feature, enable mobile use 7 Lead to Win
  8. 8. Create a user contribution system • Participate in user contribution systems • Communicate value through small experiments • Let enthusiasts lead the effort • Provide a sandbox for experimenters • Inhibit your natural control instincts (letting outsiders contribute can be scary) • Use your existing customer base to jump-start • Let users vote, early and often Cook (2008) 8 Lead to Win
  9. 9. More examples Company Value creation activities Twitter Provides API that allows external developers to invoke functionality and contribute data SalesForce Provides API that allows external developers to build applications within the platform Digg Allows users to create and annotate content Threadless Allows users to design products Briggs (2009) 9 Lead to Win
  10. 10. Open APIs • Range of API motivations and implementation – Extend product: plug-ins, application API, and SDK – Externalize capabilities: web services, and open APIs – Unrestricted use or pre-approved only • These are all different and require different business approach (eg Google loosely coupled APIs intended to attract users to monetize via distinct business model vs Apple App Store) • An open API allows anybody to access the data or services of a platform (eg Google Maps) 10 Lead to Win
  11. 11. Benefits and risks of open APIs Benefits Risks Creates opportunities to Somebody could obtain your benefit from the creativity of data and replicate the service others (large design space) (make it hard to replicate) Allow users to meet their own Aggregators become primary needs since your resources are interface to users (incent users limited (long tail of needs) to come back for more) Drive traffic to your site or You do not generate revenue application and create ways of from free services (charge for monetizing your data finite resources, eg scale) Users expect to get access to Legal grey zone around how their data (no lock-in) service/data can be used (state terms of use in a license) 11 Lead to Win
  12. 12. Design principles for open APIs • Learn from other APIs (consider mimicking a big API, as this makes it simpler for consumers) • Make the API easy to learn (documentation, toolkits for different languages) • Use your own API on your application • Don’t try to control your API • Consider open sourcing your application • Embrace REST as it lowers barriers to entry for developers and leverages web’s scalability 12 Lead to Win
  13. 13. Unbundling and IT Communications + recombination PJCI Greater than the Sum of the Parts Communications Building Blocks IT Applications Subscriber Call Presence Location Purchasing Profile History E-Mail Fulfillment Click-to- Conf- Order Text-Chat Video Imaging SAP Call erencing Entry Voice Sharing Web Billing Energy Any Comms Healthcare Mgmt Vertical New Tools to create new value Carbone (2009) 13 Global Competitors New Values Technology New Tools Lead to20 Win
  14. 14. Ways to lever open APIs • Open APIs allow unrestricted experimentation • Open APIs can be used by anyone for any purpose (inhibit your desire to control) • Open API providers appropriate value through complementary offers (eg scale) • Open API lower the barrier for composition and integration with other APIs 14 Lead to Win
  15. 15. Mashups • A mashup is an application that combines data or services obtained from multiple open APIs Harvest Enrich Manage Assemble 15 Lead to Win
  16. 16. Mashup development model Role Create Search Maintenance Component Chooses data Writes Adds features developer source & formats description Stable interface Designs API Publishes Meets SLAs Mashup Mashes up Discovers and Follows composer components (tool selects Monitors SLAs or manual) Mashup Uses mashup Specifies need user or discovers Daniel, Matera, & Weiss (2009) 16 Lead to Win
  17. 17. How mashups can be used Use Description Integration Wrapping around legacy components, extract APIs from components without one Situated Create one-off applications for a particular applications user and purpose (new spreadsheet) Quick prototype Prove a concept to justify investment Collaboration Connect people who need information with ones who have it through ad hoc communities Sensemaking Uncover patterns in observations Ogrinz (2009) 17 Lead to Win
  18. 18. 18 Lead to Win
  19. 19. Issues to watch out for • Maintenance (adjust to changes in APIs) • Dependencies on APIs (service level, availability) • Licensing (use compatible with API licenses) 19 Lead to Win
  20. 20. Key lessons • Create value outside your core product by exposing your data or functionality • Don’t try to do everything yourself by allowing customers and partners to create value • Capture value by giving away infinite resources for free, and charging for finite resources 20 Lead to Win
  21. 21. Further readings 21 Lead to Win
  22. 22. References • Briggs, C. (2009), Web 2.0 business models as decentralized value creation systems, chapter 3, 37-52, in Lytras et al. (2009) • Daniel, F., Matera, M., & Weiss, M. (2009), Web mashups: towards user-generated applications for the Web on the Web, submitted to IEEE Computer (posted on wiki) • Cook, S. (2008), The contribution revolution: let volunteers build your business, Harvard Business Review, October, 60-69 • Lytras, M. et al. (2009), Web 2.0: The Business Model, Springer • OSBR.ca, special issue on open APIs, April 2009 22 Lead to Win
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