apidays New York 2023 APIs for Embedded Business Models: Finance, Healthcare, Retail, and Media May 16 & 17, 2023 How to treat your APIs as a Product Derric Gilling, CEO Moesif ------ Check out our conferences at https://www.apidays.global/ Do you want to sponsor or talk at one of our conferences? https://apidays.typeform.com/to/ILJeAaV8 Learn more on APIscene, the global media made by the community for the community: https://www.apiscene.io Explore the API ecosystem with the API Landscape: https://apilandscape.apiscene.io/

1. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Productizing & Monetizing APIs

2. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Who am I?
● Co-founder and CEO of Moesif,
the leading API analytics and
monetization platform
● Focus on API first strategy,
growth, and PLG
● I love IPAs!
derric@moesif.com

3. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
3
Shipping an API Product
Business Model Architect
Build
Publish
& Serve
Grow &
Monetize
Measure KPIs
Iterate or
Deprecate
Business
Engineering

4. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Each API business is different
What to meter usage?
Prepaid vs Postpaid
Tiered vs Pay As You Go (PAYG)
When to invoice
1
3
4
2

5. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Business Model aligned to Customer Value
Name Example When to use
Transaction volume Number of API Calls, Messages
Sent
APIs and event-based
platforms such as SMS and
analytics
Revenue/cost share % of revenue, transaction fee Platforms focused on money
such as payments or expense
reporting
Data volume Gigabytes sent, Minutes made Platforms focused on data such
as logging or storage
User-centric Monthly unique users that are
active
A modern version of charging
per seat or per user
Resource Compute Units, active hours Compute infrastructure such as
a database or virtual machine

6. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
1. Billing Strategy
Prepaid billing: Customer
purchase credits / quota ahead
of time that is then later
consumed
Pros:
● Better cash flow
● More familiar with
traditional enterprise
Cons:
● Friction in onboarding
● Harder with PAYG
Postpaid billing: Customer
only pays for their usage after
service is already consumed
Pros:
● Less onboarding friction
● Makes PAYG easier
Cons:
● Additional credit risk
● Can be abused

7. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
2. Packaging Strategy
Tiered Pricing: Traditional SaaS
pricing with predefined suite of
features/capacity for each tier
Pros:
● Enforces a min spend
● Predictable for customer
● Easy to implement
Cons:
● Friction in expansion
● Rigid, not aligned to value
Pay As You Go: Usage-based or
consumption-based pricing
based on a unit price
Pros:
● More efficient for customer
● Less friction in expansion
● Can “appear” cheaper
Cons:
● Can upset customers with
billing surprises
● Complex to implement

8. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
3. Invoicing Strategy
Recurring: Customer invoiced
on a schedule like each month,
quarter, or year
Pros:
● Easier for revenue
recognition/GAAP
● More predictable
Cons:
● Bad unit economics for low
cost SaaS
● Complex if prepaid
Threshold: Customer invoiced
only after a credit threshold is
met (can be prepaid also)
Pros:
● Reduced transaction cost
● Makes prepaid easier
Cons:
● Harder for finance to
recognize revenue
● Company liability

9. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
9
Metrics for API Products
Business Model Architect
Build
Publish
& Serve
Grow &
Monetize
Measure KPIs
Iterate or
Deprecate
Business
Engineering

10. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Infrastructure metrics align to engineering
goals, not product goals.
Uptime SLAs
Resource
Utilization
Performance
Requests
Per Minute
Errors
1 2 3 4 5

11. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Product owners should focus on one of three
business goals
Adoption Engagement Retention

12. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Adoption: Reduce Time to Hello World
First Hello
World
First Working
App
Sign Up

13. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
What to measure?
A developer could stay in a single stage for days. You should
track both:
Conversion rate
for each step
Time to reach
next step

14. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Engagement: metrics should measure
customer value
eCommerce SaaS Data API Logistics API
Checkout conversion rate Usage of integrations and
extensions
Match rate/found in
database
Successful order
fulfillment

15. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Retention: Grow long term customers
Good product retention curves flatten or look like a “smile”

16. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
1
6
Growing an API Product
Business Model Architect
Build
Publish
& Serve
Grow &
Monetize
Measure KPIs
Iterate or
Deprecate
Business
Engineering

17. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Selling to developers is hard
Individual developers have a lot more autonomy
and authority
Developers can be skeptical of sales and marketing
Buying is much more decentralized than before
Not invented here syndrome (NIHS)
Developers can build it themselves!
1
3
5
4
2

18. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Sales focus on high ROI opportunities
Customer already seen value before sales engages
Growing usage, automatic expansion
Consultative, how to get more value
Help meet certain requirements
1
3
4
2

19. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Developers need buy-in from many
stakeholders
Legal and
Security
ROI vs Risk/Cost
Finance and
Procurement

20. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Self-service reduces friction
Legal and
Security
Product
priorities
Finance and
Procurement
Click-through ToS Fast integration Manager’s Credit
Card

21. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Then, sell through developers
Developer on a
self service
Enterprise requirements
Increase usage
Other teams / use cases

22. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
The pitfall of self-service…
Account management is not scalable
Issues during
onboarding
Changing business
needs
Billing surprises and
issues

23. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Reduce support time with self-service
management
● Provide visibility and
reports on what's
consuming their quota
● Provide tools to
upgrade and manage
their account without
involving personal

24. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Avoid surprises with self-service account
communication
● Automatically notify
customers when they
approach or breach
plan limits
● If Pay As You Go,
empower customers to
set their own usage
thresholds

25. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
2
5
Growing an API Product
Business Model Architect
Build
Publish
& Serve
Grow &
Monetize
Measure KPIs
Iterate or
Deprecate
Business
Engineering

26. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Don’t break their stuff. Handle deprecation
gracefully
Leverage in-app notifications
You’re using an outdated SDK

27. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
API Analytics and Monetization
Derric Gilling
derric@moesif.com
https://www.moesif.com/casestudies