Apidays Paris 2023 - Software and APIs for Smart, Sustainable and Sovereign Societies December 6, 7 & 8, 2023 Productizing and Monetizing APIs Derric Gilling, CEO at 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/

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Productizing and Monetizing APIs

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Who am I?
● CEO of Moesif, the leading API
analytics and monetization
platform
● Helping API first businesses with
PLG and developing
usage-based pricing
● I love IPAs!
derric@moesif.com

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Manual tasks
Value Through UI
Full Service Rollout
Automation/AI
Value Through APIs
Targeted Use Cases
Selling Traditional SaaS is
Much Harder Today

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2003
On-Prem
2013
SaaS
2023
API
Authority of developers
Cost of software
Buying Power Shifted to Individual Devs

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Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
5
Let’s first define the business strategy
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering

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Each API business is different
What to charge for
Prepaid vs Postpaid
Packaging Strategy
When to invoice
1
3
4
2

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Transaction volume
Revenue/cost share
Data volume
User-centric
Resource
Customer Cost Aligned to Customer Value

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Billing Strategy That Works for Customers
Prepaid billing: Customer
commits to credits / quota
ahead of time before
consumption
Pros:
● Better cash flow
● More familiar with
traditional contracts
Cons:
● Friction in onboarding
● Harder with PAYG
Postpaid billing: Customer
only pays for their usage “in
arrears” after service is already
consumed
Pros:
● Less onboarding friction
● Makes PAYG easier
Cons:
● Additional credit risk
● Can be abused

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Packaging Strategy That Works for Growth
Tiered: Traditional SaaS tiers
with predefined set of features
and quota
Pros:
● Enforces a min spend
● Predictable for customer
● Easy to implement
Cons:
● Friction in expansion
● Rigid, not aligned to
customer 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

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Invoicing Strategy That Works for Finance
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

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Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
11
Growing an API product
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering

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Developers need buy-in from many
stakeholders
Legal and
Security
Project
Priorities
Finance and
Procurement

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Self-service reduces initial friction
Legal and
Security
Project
Priorities
Finance and
Procurement
Click-through ToS Fast integration Manager’s Credit
Card

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Land lots of developers first
Get developers to realize value and pay a token amount
Large adoption
funnel
Fast time to
paying

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Then, sell through existing developers
Users on Self-Service
Enterprise
Requirements
Expand Usage New Use Cases

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Aha Moment
Increasing Usage
Accelerated Usage
Self-Service User
Sales Engages
Identify New Use Cases
PLG Sales
Flywheel
Sales drives usage-based expansion flywheel

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Scaling self-service is hard
Issues during
onboarding
Changing business
needs
Billing surprises and
issues

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Reduce support cost with a great self-service
experience
● Provide visibility and
reports on what's
consuming their quota
● Provide tools to
upgrade and manage
their account without
involving personal

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Avoid surprises by over communicating
● Automatically notify
customers when they
approach or breach
plan limits
● If Pay As You Go,
empower customers to
set their own usage
thresholds

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Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
20
Measuring KPIs and Metrics
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering

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Infrastructure metrics align to engineering
goals, not product goals.
Uptime SLAs
Resource
Utilization
Performance
Requests
Per Minute
Errors
1 2 3 4 5

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Product owners should focus on one of three
business goals
Adoption Engagement Retention

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Adoption: Reduce Time to Hello World
First Hello
World
First Working
App
Sign Up

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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

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Retention: Grow long term customers
Good product retention curves flatten or look like a “smile”

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Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
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End of life
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering

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Don’t break their stuff. Handle deprecation
gracefully
Leverage in-app notifications
You’re using an outdated SDK

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Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
How to Monetize APIs With Moesif
Usage-based billing
API Product Analytics
Quota Management
User Guidance

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API Analytics and Monetization
Derric Gilling
derric@moesif.com
https://www.moesif.com/casestudies