Kin Lane

API Evangelist


Business Models for your API as a Start-Up


API Days - November, 2012

I have an idea for a great startup!

  • SMS Service
  • Communicate within small groups
  • Send and receive small messages
  • Limitations of SMS - 140 characters

Last night I worked and put up a simple web site!

Over the next week I get validation for my idea


People start asking for new features...

  • Mobile apps
  • Desktop apps
  • Widgets
  • Buttons
  • Raw Data

Lets launch an API!

People can build their own features!

  • Crowdsource
  • Community
  • Developer power!
  • Ecosystem



"I should have an API for my business model, not a business model for my API. DOH!


I didn't think of how I will make money.


And I won't want to look stupid later on for not having a clear business model.

Which business models?

  • Advertising?
  • Premium Features
  • Free (as in beer)
  • Free + Premium = Fremium

Pay as You Go

  • Content storage
  • Bandwidth usage
  • Premium widgets
  • Account analytics
  • Company accounts
  • Verified accounts

Tiered Packages

Reduce confusion about pricing

  • Basic
  • Pro
  • Enterperise

We have a business model!


Lets launch our API!

Developers embrace API

  • Basic
  • Data Scientist
  • Enterprise

Incentive quality API usage

  • Developer affiliate program
  • New user - Credits
  • New premium user - Revenue share
  • Pay as you go - % Revenue share

This works great!

  • Gaming system
  • Fake users
  • New user - Credits
  • New premium user - Revenue share
  • Pay as you go - % Revenue share
  • Affiliate tiers - 5%, 10%, 15%

Platform is growing!

Venture capitalists want more!

  • Advertising
  • Promoted accounts
  • Promoted messages
  • Developer revenue share
  • Competitive PPC

Business model is working!

  • 1000's of users
  • 1000's of developers
  • 1000's of applications
  • Revenue - $$$

Developers with higher needs

  • More data
  • More support
  • More revenue share
  • Partner program

Partner program

  • Identify needs
  • Invest in developers
  • Reduce usage costs
  • Higher revenue
  • Incentivize right behavior

Operational costs

  • API usage is 75% of infrastructure costs
  • Developers are funding the costs
  • More demand on API
  • More they pay
  • Reward positive behavior
  • Unwanted behavior pays

Business Model

  • Free users
  • Paid users
  • Free developers
  • Paid developers
  • Partners

Investment

  • Partners who should be features
  • Partner talent acquisition
  • Deeper investment in partners
  • Incubation
  • Acquisition
  • Communication
  • Further incentivize developers

Business Model

  • Free users
  • Paid users
  • Free developers
  • Paid developers
  • Partners
  • Incubation

Indirect Value

  • Marketing Vehicle
  • Brand Awareness
  • SEO Traffic
  • Social Traffic
  • Evangelism

I am happy!


VC are happy!


Developers are happy!


Users are happy!

This is all hypothetical of course!


The End


By Kin Lane (@kinlane)