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Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Productizing and Monetizing APIs
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Manual tasks
Value Through UI
Full Service Rollout
Automation/AI
Value Through APIs
Targeted Use Cases
Selling Traditional SaaS is
Much Harder Today
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
2004
On-Prem
2014
SaaS
2024
API
Authority of developers
Cost of software
Buying Power Shifted to Individual Devs
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Confidential and Proprietary. © 2024 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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Each API business is different
What to charge for
Prepaid vs Postpaid
Packaging Strategy
When to invoice
1
3
4
2
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Transaction volume
Revenue/cost share
Data volume
User-centric
Resource
Pricing Aligned to Customer Value
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Billing Strategy That Works for Customers
Prepaid billing: Customer
commits to credits / quota
ahead of time before
consumption
Pros:
● Better cash flow especially
when high cost like AI apps
● 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 as
no commit needed
● Makes PAYG easier
Cons:
● Additional credit risk
● Can be abused
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Invoicing Strategy That Works for Finance
Recurring: Customer invoiced
on a schedule like each month,
quarter, or year
Pros:
● Easier for revenue
recognition/GAAP
● Predictable revenue AND
cost
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:
● Reduces transaction
overhead cost
● Makes prepaid easier
● Better for variable usage
Cons:
● Harder for finance to
recognize revenue
● Company liability
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
11
Growing an API product
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Developers need buy-in from many
stakeholders
Legal and
Security
Project
Priorities
Finance and
Procurement
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Self-service reduces initial friction
Legal and
Security
Project
Priorities
Finance and
Procurement
Click-through ToS Fast integration Manager’s Credit
Card
Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Land lots of developers first
Get developers to realize value and pay a token amount
Large adoption
funnel
Fast time to
paying
Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Then, sell through existing developers
Users on Self-Service
Enterprise
Requirements
Expand Usage New Use Cases
Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
Aha Moment
Increasing Usage
Accelerated Usage
Self-Service User
Sales Engages
Identify New Use Cases
PLG Sales
Flywheel
Sales drives usage-based expansion flywheel
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Scaling self-service is hard
Issues during
onboarding
Changing business
needs
Billing surprises and
issues
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
20
Measuring KPIs and Metrics
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering
Confidential and Proprietary. © 2024 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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Product owners should focus on one of three
business goals
Adoption Engagement Retention
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Adoption: Reduce Time to Hello World
First Hello
World
First Working
App
Sign Up
Confidential and Proprietary. © 2024 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
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Retention: Grow long term customers
Good product retention curves flatten or look like a “smile”
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
26
End of life
Business
Strategy
Architect
Build Publish
Grow &
Expand
Measure KPIs
Iterate or
Deprecate
Business
Engineering
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Don’t break their stuff. Handle deprecation
gracefully
Leverage in-app notifications
You’re using an outdated SDK
Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved
Monetize Your APIs With Moesif
Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved
API Analytics and Monetization
Derric Gilling
derric@moesif.com
https://www.moesif.com/casestudies

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Productizing and Monetizing APIs - Derric Gilling, Moseif

  • 1. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Productizing and Monetizing APIs
  • 2. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 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
  • 3. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Manual tasks Value Through UI Full Service Rollout Automation/AI Value Through APIs Targeted Use Cases Selling Traditional SaaS is Much Harder Today
  • 4. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 2004 On-Prem 2014 SaaS 2024 API Authority of developers Cost of software Buying Power Shifted to Individual Devs
  • 5. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2024 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
  • 6. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Each API business is different What to charge for Prepaid vs Postpaid Packaging Strategy When to invoice 1 3 4 2
  • 7. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Transaction volume Revenue/cost share Data volume User-centric Resource Pricing Aligned to Customer Value
  • 8. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Billing Strategy That Works for Customers Prepaid billing: Customer commits to credits / quota ahead of time before consumption Pros: ● Better cash flow especially when high cost like AI apps ● 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 as no commit needed ● Makes PAYG easier Cons: ● Additional credit risk ● Can be abused
  • 9. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 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
  • 10. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Invoicing Strategy That Works for Finance Recurring: Customer invoiced on a schedule like each month, quarter, or year Pros: ● Easier for revenue recognition/GAAP ● Predictable revenue AND cost 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: ● Reduces transaction overhead cost ● Makes prepaid easier ● Better for variable usage Cons: ● Harder for finance to recognize revenue ● Company liability
  • 11. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 11 Growing an API product Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
  • 12. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Developers need buy-in from many stakeholders Legal and Security Project Priorities Finance and Procurement
  • 13. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Self-service reduces initial friction Legal and Security Project Priorities Finance and Procurement Click-through ToS Fast integration Manager’s Credit Card
  • 14. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Land lots of developers first Get developers to realize value and pay a token amount Large adoption funnel Fast time to paying
  • 15. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Then, sell through existing developers Users on Self-Service Enterprise Requirements Expand Usage New Use Cases
  • 16. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Aha Moment Increasing Usage Accelerated Usage Self-Service User Sales Engages Identify New Use Cases PLG Sales Flywheel Sales drives usage-based expansion flywheel
  • 17. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Scaling self-service is hard Issues during onboarding Changing business needs Billing surprises and issues
  • 18. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 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
  • 19. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 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
  • 20. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 20 Measuring KPIs and Metrics Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
  • 21. Confidential and Proprietary. © 2024 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
  • 22. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Product owners should focus on one of three business goals Adoption Engagement Retention
  • 23. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Adoption: Reduce Time to Hello World First Hello World First Working App Sign Up
  • 24. Confidential and Proprietary. © 2024 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
  • 25. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Retention: Grow long term customers Good product retention curves flatten or look like a “smile”
  • 26. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved 26 End of life Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
  • 27. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Don’t break their stuff. Handle deprecation gracefully Leverage in-app notifications You’re using an outdated SDK
  • 28. Confidential and Proprietary. © 2024 Moesif, Inc. All Rights Reserved Monetize Your APIs With Moesif
  • 29. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved API Analytics and Monetization Derric Gilling derric@moesif.com https://www.moesif.com/casestudies