Source: http://pandawhale.com/post/61574/something-interesting-is-happening-tom-goodwin-on-uber-facebook-alibaba-and-airbnb

“Uber, Facebook, Airbnb, Alibaba, PayPal. All of them drive their core operations on internet platforms and have astronomically high valuations without any notable physical assets. (…)

These companies are indescribably thin layers that sit on top of vast supply systems (where the costs are) and interface with a huge number of people (where the money is).

And every time a user interacts with these companies’ platforms, cleverly designed APIs absorb valuable information.

To the customer, the interface these companies offer, is the service.

There is no better business to be in.

Based on: http://techcrunch.com/2015/03/03/in-the-age-of-disintermediation-the-battle-is-all-for-the-customer-interface/

Source: http://pandawhale.com/post/61574/something-interesting-is-happening-tom-goodwin-on-uber-facebook-alibaba-and-airbnb

a. Unbundling of propositions

b. Rebundling in the API economy (listen to what your customer needs and see if there is an API you can use to improve your proposition)

The unbundling and rebundling of everything

Get rid of that Keep this

What you offerWhat your customer needs

What you offer

Add that

What your customer needs

a. Unbundling of propositions

b. Rebundling in the API economy (listen to what your customer needs and see if there is an API, you can use to offer a better proposition)

The unbundling and rebundling of everything

Get rid of that Keep this

What your customer needs

What you offer

Add that

What your customer needs

What you offer

Put on your business model canvas glasses and discover where APIs add value in your business model

“A Business Model describes how an organization creates, delivers and captures value for its stakeholders”

You are familiar with the business model canvas… right?

The business model canvas is a tool that helps you describe and discuss your Business Model

http://www.businessmodelgeneration.com/

Value proposition and APIsWhat are you offering them? What is that getting

done for them? Do they care?

b. Your proposition relies on APIs, APIs are the building blocks

a. Your value proposition is the API that others use for their value proposition

“TripAdvisor App Now Helps Travelers Get A Ride With Uber In More Than 40 Cities Worldwide”(Source: http://techcrunch.com/2014/08/20/uber-api-part-deux/http://ir.tripadvisor.com/releasedetail.cfm?ReleaseID=867037)

Location

Payment User authentication

Transport

Company DNA

Channels and APIsHow does each customer segment want to be reached? Through which interaction points?

More than 75% of Twitter traffic is API traffic.

Extend your online presence with Open APIs

APIs are the way to make data and functionalities available to customers and partners

Reach

Agility

Collaborate

Innovate

Internal/private/dark API

Partner API

Open API

Customer segment and APIsWhich customers and users are you serving? Which jobs do they really want to get done?

Businesses (BIG and small) that use your API

Developers that use your APIhttp://developer.<yourbusiness>.com

End consumers

Customer relationships and APIsWhat relationships are you establishing with each segment? What makes them come back for more?

Customer lock in

Personalization

Analytics

Key resources and APIsWhich key resources underpin your business model? Which assets are essential?

API capabilities are a strategic resource

Maturity of API capabilities

API management platforms offer additional capabilities, e.g.

• Security mediation• Traffic Management• Partner Customization• Mobile Optimization• Versioning

• Analytics• Monetization• Onboarding• API Documentation• Developer Authentication• Transformation

Key activities and APIsWhich activities do you need to perform well in your business model? What is crucial?

APIs have there own lifecycle and need to be managed API Management platforms can help you manage your APIs An API team matches APIs with developer and business needs

API TEAM

Source: http://apigee.com/about/resources/videos/digital-transformation-how-create-right-team-0

Key partners and APIsWhich partners and suppliers leverage your model? Who do you need to rely on?

APIs reshuffle value chains and redefine industries

Be an attractive partner!

Your Connectedness

Good Average

Your Quality of

assets

Good ATTRACTIVE Watch out!

Average Watch out!NOT INTERESTING!

GAME OVER

Partner to market new propositions fast

Choose your partners wisely

Collaborate to succeed

Revenue streams and APIsWhat are customers really willing to pay for? How? Are you generating transactional or recurring revenues

Salesforce.com generates 50% of its revenue through APIs, Expedia.com

generates 90%, and eBay, 60%. (source: https://hbr.org/2015/01/the-strategic-value-of-apis)

FreeDeveloper

paysDeveloper gets paid

Indirect

APIs

API revenue streams, e.g.: Freemium Tiered pricing Pay per use Unit based pricing Transaction fee Revenue share Affiliate As an upsell

Source: http://www.slideshare.net/jmusser/j-musser-apibizmodels2013

Source: http://www.slideshare.net/jmusser/j-musser-apibizmodels2013

Some more ways to monetize APIs

API capabilities have a price

API capabilities can greatly reduce costs

Shorter time to market

Lower development costs

Reusability

Productization of (backend) services

Self service

Cost structure and APIsWhat is the resulting cost structure? Which key elements drive your costs?

APIs, API team, API mgt platform

So…

APIs open up new channels

APIs enable new revenue streams

APIs extend partnerships or reshuffle your business ecosystem

APIs enable a better customer experience

APIs increase an organizations flexibility

APIs accelerates (open) innovation and shorten time to market

APIs enable Business model innovation

Business model innovation & APIs

GET STARTED

Understand your current business context and business model (including customers!)

Build your value proposition, looking at your own core assets and complementary partner assets.

Experiment with this proposition, is this what your customers want? (Build, measure, learn)

Define a strategy to capture the value most effectively and scale up

Let’s create!Thank you

ANY QUESTIONS?