Chris Anderson recently gave a TED talk on Crowd Accelerated Innovation that contains fantastic insights on one of the reasons enterprises should open their businesses via Web APIs.
In essence, Chris observes that three ingredients can drive tremendous innovation:
- A (large) crowd… a group of people with a common interest to create an ecosystem around something
- “Light”, clear visibility of what is possible, and
- Desire to achieve and excel
While Chris illustrates how these three ingredients work in tandem in online video to drive innovation in disciplines as diverse as dance or science, this phenomena is exactly what drives innovation on a company’s business via open APIs.
If while watching Chris’s talk, you replace “online video” with your service, platform or network exposed via a web API, you can understand how to open your business to drive amazing innovation.
An open API draws a crowd of developers with an affinity to what you do. They might be interested in movies, location, music, mobility- anything. Some developers will innovate on your API out of a love for what you do, but you’ll get *a lot* more innovation if you find a way for those developers to win (desire to achieve and excel). Winning could be 70% of the proceeds from selling applications, or it could be affiliate payouts, or a huge winner-takes-all innovation prize. Shining a light on cool things your devs are doing will inspire others with what is possible. You can also look across what is happening on your APIs and learn about your own assets and be inspired. Thus the flywheel of innovation gathers momentum.
An obvious example of this is Apple’s iPhone. The APIs are open, and there is an easy way to make money (desire), and everyone can see (light) the interesting ideas in the App Store and do the math on the payout on those successes, so a large crowd has gathered and innovation has flowed from that platform. The virtuous cycle has begun and the innovation wheel is furiously accelerating. Compare that to the wireless app market prior to the iPhone, or to cable television. Prior to the iPhone, devices were controlled by the service providers, crowds were limited and desire was squashed with difficult terms. A (much smaller) crowd existed, and much smaller innovation resulted. In the case of cable, there is nearly no openness, no desire, and no crowds. Innovation has been limited.
Companies from Twitter to PayPal to Netflix to Best Buy to Ameritrade have opened their businesses to developers, given developers incentives and visibility, and seen tremendous crowd-sourced innovation. In an era of tight budgets and cost justification, it is difficult to fund even a handful ideas, much less the dozens or hundreds of ideas necessary to uncover new opportunities and discard those which do not work. That is Crowd Sourced Innovation on your business via an open API.