We’ve looked at internal, partner, and customer API initiatives. This time we’ll look at the Open API initiative, probably the most familiar of strategies given the success of companies like Twitter, Foursquare, Facebook . . .
A lot of companies are inclined to start with an Open API using Twitter, Foursquare, or Facebook as the archetype. We generally recommend against this approach. Rather, we recommend an open strategy after a business has learned lessons and mitigated risks by executing an internal or partner model first.
After the API team has learned from internal and partner projects there will be a vast amount of institutional wisdom and courage for opening the API to the world of innovative developers.
Anatomy of an Open API Initiative
There are no absolutes and it doesn’t always work out that the flow is from internal to partner to open. Netflix has seen huge success by starting with an open API, then working with partners who were building streaming services for specific connected devices, and are now using their API more and more internally as well. For example, internal developers re-engineered their private streaming API by using the public API.
Here are some of the use cases served by an open API initiative.
This is the most common of all use cases and a well-known paradigm given the successes of companies like Twitter, Foursquare, or Facebook. This is the case for innovation by leveraging the creativity and know-how of 100s of 1000s of developers around the world using your API to create cool apps and make big breakthroughs.
If you target an Open API initiative, chances are that your internal or partner strategies will go well too. It is important to be careful about setting expectations. A lot of things need to go right to get huge numbers of developers successfully creating apps on your APIs.
A company may have a geographical or demographic niche that represents a nice new value proposition for the business. But it may not have the resources or the budget to get the value proposition into those niches. With an open API program, a developer can create an app that would represent enough revenue to be a change in her lifestyle and at the same time impact the original business in a positive way. A win-win!
Netflix started with a directed approach. They ran a contest in the academic researcher marketplace and offered a substantial dollar reward to incent researchers to use the Netflix API to create a better movie recommendation system. We’ve seen a similar approach - inspiring research to help solve a problem - used successfully in the automotive industry. It extends R&D budgets and resources beyond the borders of your business and spurs innovation on a broad scale.
The Enterprise API Engine
We've observed that many successful API initiatives are done in stages starting Internal and expanding to partners and customers and then possibly open, each stage building on the preceding one.
But again, there are no absolutes, and generally when you know you need an API, you should start where you have the most amount of pain. Start where the business drivers are - which might be Internal if you are meeting demand for mobile and social apps, or Partner if you need to innovate with partners to deliver on a backlog of business development opportunities, or Open if you need to inspire a broad community of app developers to innovate and create growth and new opportunities.
When a business gets all four scenarios working together it creates a strong enterprise API engine.
You are on the road to having a robust platform that allows you to compete in the world of ubiquity but where budget and resources to keep up with that ubiquity are not keeping pace. An API strategy future-proofs your business.