The Business of APIs

by Manish Bhargava on October 21, 2010 · 0 comments

in Legal marketing,,social media for lawyers,Web 2.0

Image via Google Images

Last Tuesday I was in NY city attending the much awaited The Business of APIs Conference organized by Mashery, the leading provider of API management services. It was a sold out crowd and why not? APIs are becoming increasingly popular and part of many companies core business strategy. Speakers included representatives from leading names in the API ecosystem including Netflix, Yellow Pages Group, USA Today, Associated Press, The Guardian and many more. They had a pretty interesting Developers panel as well.

For starters, APIs or Application Programming Interfaces are nothing more than a set of basic functions that expose a company’s data and logic to the outside world. They allow 3rd party applications to uniformly access your data and logic and built innovative mashups. Some of the famous APIs out there include Google Maps, Flickr, YouTube, Twitter and Facebook APIs. They enable developer communities to build mashups like HousingMaps which is powered by APIs from Google Maps and Craigslist. The history behind, as I learned in the conference through Oren Michels‘s (CEO of Mashery) presentation on ‘A Complete History of APIs’, is a pretty interesting one. A user, who happened to be a developer, while looking for apartments often looked at for open apartments and then look up its location on Google Maps. This was a process he would do for every apartment listing. Something clicked in his head and after looking at the code of each site, he came up with an idea of combining the two data sets. Voila – The first mashup was born. This was April 2005. Although this mashup was made possible by some form of screenscraping, it eventually made Google realize that there is a market of APIs. Google Maps API was born. Today, there are over 350,000 sites that are powered by Google Maps API. The developer was eventually hired by Google. Today in the market there are over 5301 mashups as reported by programmableweb.

Marc Perrish (VP, Barnes & Noble) highlighted couple of insights. It took over 8 yrs to build the first 1000 APIs. It took only 2 yrs to build the next 1000 APIs. Imagine whats next? Another interesting tidbit I learned was related to the change in the mind set of Companies. It was like going through a complete circle.

In 1995 Companies were saying “Why should we have a web site?” In 2000 Companies were saying “Ofcourse we have a web site”.

In 2005 Companies were saying “Do we need APIs?” In 2010 Companies are saying “Ofcourse we have APIs”

The question still remains. Why in the world would a company expose their rich set of data and logic for others to use and exploit? After all they have spent ‘real’ dollars to massage and maintain the data for their end users. Very valid point. The answers hands down were – because it will strengthen your brand, because it will increase traffic to your site, because it will increase indirect revenue via alternative stream, because it will create loyal user base, because smartest people are always somewhere else, because you will be able to convert competitors into partners, because it will increase your web foot-print/reach by having presence in every corner of the internet, because it will help you retain or even increase your customer base, because it will …. The last point is often forgotten. If you are in the business of providing marketing for your customers, having APIs will give legs to your customer’s content. After all they are paying you to syndicate their content and have it in front of targeted audience.

Gartner (IT) expects that sales of mobile devices/smartphones to outpace sales of PCs by 2012 (also mentioned by The Guardian). Apps on mobile devices like iphone, droid, ipad are becoming increasingly popular and to power these app, you need to have APIs. It won’t be long when traffic coming from these mobile devices will overshadow the organic traffic coming to your websites.

I’d like to share some of the learnings I had which may or may not be new to you but never the less here they are -

  • Documentation is key to success – When the Developer Panel was asked a question on what is the single most important aspect of a new API launch, consensus was documentation. Without proper documentation, developer will quickly loose interest and will walk out on you. He needs to be able to quickly scan the documentation and get an idea on how to use the API and get the data he can leverage
  • Eat your own dog food – An API is not only meant for external partners but also for you. You can be the biggest proponent of your API if you can showcase the power of it. Netflix does it the best. Its website is actually powered completely by their external APIs. Eat that!
  • REST over SOAP – REST based APIs are becoming increasingly more popular and desirable than SOAP based APIs. This resonated quite clearly in the conference
  • Don’t forget JSON – Its the fat-free alternative to XML. If you want someone to create a mobile app on top of your data/logic, JSON is the preferred response format over XML due to increase performance. JSON maps more directly onto the data structures used in programming languages.
  • Monitor key metrics to measure success – Without metrics everything is subjective (@jgrahamthomas). You need to measure your return on your investment and there is no better way than to look at key metrics like traffic from 3rd party application for instance.
  • Business Developement 2.0 – Business development 2.0 is about taking potential leads via your API platform and converting them into paid customers. Its a whole new way of getting more customers and doing business development.
  • Go small and built it over time – Walk before you can run. Get something out there for the developer community to consume. Make sure it has robust use case and documentation.
  • Set incentives for adoption - If you want the developer community to leave everything they are doing and start using your APIs, you need to give them something in return. This can be in the form of a contest which could give them some cash prize in addition to name recognition or you could even share the revenue collected via their mashups.

To get a list of complete tweets related to the Business of API conference, see #bapi. It was amazing to see how ‘real time’ the reviews really were! Mashery has the same conference coming up in San Francisco with yet another set of stellar speakers. I would highly encourage those who are in the business of APIs or considering to have one to attend it.

So what do you think of APIs in general? Would you like us to open our data and logic and build a Martindale-Hubbell Developer Platform? What would you do with our APIs? We’d love to hear your thoughts.!/jgrahamthomas
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