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Real World API Business Models That Worked


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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

Published in: Technology
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Real World API Business Models That Worked

  1. 1. Real World API Business Models That Worked Preliminary findings from a research study into API business models @mgboydcom
  2. 2. What is the secret sauce behind…
  3. 3. Fyndiq (Swedish e-commerce)? API introduced
  4. 4. WePay (platform payments API)? revamped dev pages
  5. 5. TransportAPI (transport data)? Developer numbers
  6. 6. Walgreens (photo printing service API)? +40% of photo printing revenue is from API channel
  7. 7. API Business Models Reviewed • Fyndiq • WePay • TransportAPI • Walgreens Photo Printing • Fitbit • DHL • Pebble • Gengo • Evernote • SeatGeek • Sears Product Details • SchedJoules • Contentful • Indeed
  8. 8. Research Methodology 1. Business Model Canvas Mapping
  9. 9. Research Methodology 2. Plugged in to Thanks Holger!
  10. 10. Research Methodology 3. Identify business model typology
  11. 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. 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. 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
  14. 14. Dev Numbers Don’t Need To Be Huge
  15. 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. 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. 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)
  18. 18. What Next?
  19. 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. 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. 21. Want more? Follow Mark Boyd on ProgrammableWeb @mgboydcom ! ! ! !