API Business Models
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The document presents a concise overview of various API business models and strategies discussed by John Musser at the API Strategy Conference in 2013. It highlights the importance of integrating business models into APIs, different ROI types, and how organizations utilize APIs to drive innovation and revenue, exemplified by successful case studies like Expedia and NPR. Furthermore, it notes that internal use may represent a major segment of API utilization, indicating that businesses need to tailor their API strategies to their specific needs.
![Content Acquisition
3rd
party
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built
on
60%
of
all
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came
from
the
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Open
PlaTorm
3rd
party
clients
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accounOng
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in
Gross
Merchandise
Volume
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Kumar Kandaswamy, May 31, 2012 Ryan Sarver, Chirp Conference, April 4, 2010](https://image.slidesharecdn.com/jmusserapibizmodels2013-130222072356-phpapp02/85/API-Business-Models-26-320.jpg)
API Business Models
- 1. API Business Models 20 models in 20 minutes John Musser, ProgrammableWeb @johnmusser API Strategy Conference, 2013
- 2. yea rs 7 Is ,000 AP tor ies 8 new s s 3 ,000
- 4. Why API? Many reasons… Drive innovation BizDev / LeadGen Marketing channel User acquisition New line of business Upsell opportunity API as Product Increase footprint Device and mobile support Distribution channel Partner opportunities Content acquisition Drive traffic Increase stickiness Accelerate internal projects Extend product
- 5. ET #1 I SECR A P An API strategy is not an API business model
- 6. A very brief history of API business models…
- 7. API Business Models, 2005
- 8. API Business Models, 2013
- 9. ET #2 I SECR A P Most APIs have >1 type of ROI
- 10. Free
- 11. Developer Pays
- 12. Pay as You Go “Pay only for what you use. There is no minimum fee.”
- 13. Tiered Pricing
- 14. Freemium
- 18. Transaction Fee 2.9% + 30¢ per transacDon
- 20. Affiliate Revenue Share: CPA + = $
- 22. APIs, now a billion $ business = $2 billion/year Affiliate Network “90% of what we do is business through APIs” John Wa9on, Expedia Affiliate Network, TravoluGon.co.uk, April 2012
- 23. Recurring Revenue Share • 3% of $9.99/month per “Unlimited” subscriber • 2% of $4.99/month per “Rdio Web” subscriber Affiliate Program • 7% of purchase price for each MP3 purchased Recurring revenue every month for as long as a subscriber recruited by you remains an Rdio subscriber
- 24. ET #3 I SECR A P You need to bake your business model into your API
- 25. Indirect
- 26. Content Acquisition 3rd party applicaOons built on 60% of all tweets came from the [eBay] Open PlaTorm 3rd party clients [2010] accounOng for $6.9 billion in Gross Merchandise Volume (GMV) in 2008. Kumar Kandaswamy, May 31, 2012 Ryan Sarver, Chirp Conference, April 4, 2010
- 28. API as SaaS upsell
- 29. APIs, the glue of SaaS 200 SaaS companies with API success stories: “We find that if our customers use any single integraOon, they are three Omes as likely to convert to paid.” Sunir Shah, FreshBooks Blog, Aug 25, 2010
- 30. ET #4 I SECR A P API business models are not 1 size fits all
- 31. NPR: Internal use = API growth NPR Music Facebook Integration iPhone app NPR iPad app Relaunched NPR mobile site Player 2.0 NPR News Android app NPR Music Homepage NPR Blogs Remix Improvements Made API Friendly Story Page Improvements Source NPR. Shown in millions via Ominture. Last updated September 23, 2010.
- 32. Evernote: 99% internal calls External usage API usage from internal apps
- 33. Netflix platform: 800 devices Daniel Jacobson, Netflix Engineering Blog, July 9, 2012
- 34. ET #5 I SECR A P Internal use may be the biggest API use case
- 36. Thank You QuesOons, ideas, comments? jmusser@gmail.com @johnmusser