This document discusses API business models and value exchange in API ecosystems. It describes common business model patterns for APIs like "manufacturer-supplier", "retailer-wholesaler", and "aggregator" that are based on the exchange of value between participants. Specific examples of these patterns in industries like banking, maps, and travel are provided. The document emphasizes that successful API business models require understanding the ecosystem and exchanges of value that drive profitability for all participants.

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Matt McLarty, Global Leader of API Strategy
@mattmclartybc
Value Networks in
Open Banking
API Business Modeling through
Value Exchange

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What is an API Ecosystem?
2
API
Partners
3rd Party APIs
Support &
Platform Teams
Underlying
Assets
Application
Developers
Customers
/End Users
Tools
Applications

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API
API
API
API
API
API Ecosystem: An External View

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API Products in the Ecosystem
4
The primary goal of API products is to
establish and continuously improve a
sustainable business model that serves
groups of customers and drives
profitability for the product company

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API business models
5
From API Business Models: 20 models in 20 minutes by John Musser (https://www.infoq.com/presentations/API-Business-Models/)

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API Ecosystem: Macro View
6
API
API
API
API
API
Internal API Internal API
Pay-per-use
Pay-per-use
Free to use

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Business model
7
“A business model is how an
organization creates, delivers,
and captures value.”
Alex Osterwalder, creator of the
Business Model Canvas

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Value network
8
“The collection of upstream
suppliers, downstream channels to
market, and ancillary providers
that support a common business
model within an industry.”
Clayton Christensen, The Innovator’s Dilemma

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From Escaping the Build Trap by Melissa Perri (https://www.oreilly.com/library/view/escaping-the-build/9781491973783/)
Value exchange

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Value exchanges in business models
10
https://www.thevalueengineers.nl/download/a-business-model-of-the-facebook-ecosystem/
Dr. Jaap Gordijn
Dr. Roel Wieringa

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Value exchanges in business models
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Newspaper
(media)
Product
company
Readers ReachMoney
Content
Advertising
money
Freelance
journalists
Content Money/exposure

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Value exchanges in business models
12
Facebook
Product
company
Users Targeted
reach
Data, content,
relationships,
money
Content
Advertising
money
App
developers
Content,
games Money

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API value exchange
13
End users
API
consumers
API
provider
Products
&
Services
Data Exposure Time

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“API manufacturer-supplier” business model
14
End users
Mobile &
web apps
Google
Maps API
Unique data,
best-of-breed
functions
Money, data
Location-enabled
services

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“API manufacturer-supplier” business model
15
End users
TPP
(e.g. Yolt)
Banks
Account info (data)
payment initiation
(service)
Fees (money)?
Customer interactions
(data)?
End-to-end
financial
process
Funds & fees
(money)?
Customer info &
interactions (data)
Some ideas from https://thepaypers.com/reports/the-open-banking-report-2019-insights-into-the-global-open-banking-landscape-2/r780814

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“API manufacturer-supplier” business model
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End users
Bank
(e.g. Starling)
Fintechs
Unique products &
services
Money, reach
Consolidated
services,
security
Money, data

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“API retailer-wholesaler” business model
17
End users
Mobile &
web apps
Twilio API
Global telco
services,
time-to-market
Money
Money
Telco
Carrier
APIs
Money
Regional telco
services

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“API retailer-wholesaler” business model
18
End users
Mobile &
web apps
Plaid API
Aggregated
account info,
time-to-market
Money
Money
Banks
Money
Account
information

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Content
(rental listings),
data
“Aggregator” business model
19
Renters/
vacationers
Airbnb
mobile &
web app
Airbnb API
Aggregated
property listings,
security
Money,
attention,
data
Multiple
listing
service Reach,
moneyProperty
owners

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Payment targets
“Service aggregator” business model
20
Payors
TPP
Payment
Aggregator
(e.g. TransferWise)
Payment services,
aggregated targets
(reach)
Money, reach
Banks
Money
Payees

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Data (mortgage
rates), products
(mortgages)
“Product Aggregator” business model
21
Home buyers/
owners
Mobile/
web app
Mortgage
Aggregator
(e.g. intelliMortgage)
Aggregated
mortgage offers,
time
Money,
attention
Banks
Exposure,
moneyMortgage
underwriters

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API Business Models in Open Banking
API business models
• Standalone API business model: API product companies
• Composite API business model: APIs enable the broader business model
Business model patterns
• “Manufacturer-supplier”
• “Retailer-wholesaler”
• “Aggregator”
• More: payments broker, data hub
Ecosystem thinking
• Map the ecosystem and help it thrive
• Don’t be an invasive species!
22
End users
API
consumers
API
provider

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More info on value exchange business models...
Blog:
https://blogs.mulesoft.com/biz/management/api-business-modeling-through-value-exchange/
Podcast:
https://soundcloud.com/mulesoft/apis-unplugged-episode-6-api-business-models-value-exchange
The Value Engineers:
https://www.thevalueengineers.nl/

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Strategy Workshop
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