{"API Evangelist"}

Expanding On My API Monetization Strategy And Research

This is a full walk-through of me trying to distill down my approach to API monetization, in a way that can be applied across not just 30 APIs, but potentially 300, or 3000. There are several things converging for me right now, which includes the maturing of my own infrastructure, as well as conversations I'm having with startups, enterprise groups, federal government agencies, and my own partner(s).

I need to keep hammering on this to help me operate my own infrastructure, but I am also partnering with APIWare to help me deliver on much of the API design, deployment, and management, so I need to have a good handle on my costs. As with all of my areas of research, within the area of API monetization I am just trying to get a handle on the common building blocks, and provide a checklist of considerations to be employed when I'm planning and operating my API infrastructure.

To help me build a base, let's walk through some of the building blocks of my own API monetization strategy.

Acquisition
What do I have invested into any single API. Even if I am building something from scratch, what went into it? Every API I possess has some sort of acquisition cost, even if it is just $14.00 for the two pints of beer I bought while I was brainstorming the idea.

Having a framework for me to think about the acquisition of each API resource I possess, makes it easier for me to think it through when I am brainstorming new API ideas. Something that makes sure I am tracking all details from the moment of inception, to when I commit to actually making it available via an API on my platform.

Development
What does it actually take to stand up an API. There are a lot of moving parts with making an API happen, and not all of them are technical. Am I willing to invest the time necessary to stand up an API or will it require outside investment, as well as resources. What is needed to take an API from acquisition to actual operation?

Historically when it came to APIs, I just dove into writing code with little consideration for what went into it. I'd say this is one by-product of the microservices way of thinking, is that I decoupled the moving parts of each of my APIs, allowing me to approach development in this way. I'm sure I will keep slicing off other elements within the development process as I progress.

Operation
What goes into keeping an API operational, reliable and available? How much do I spend on all aspects of an existing APIs lifecycle to make sure it meets the standards of API consumers. Ideally operational costs go down the more efficient the platform gets with overall operations, reducing overhead, and streamlining across everything.

Ideally the more APIs you operate, the more detail you will get about each of these areas, and some of these areas you should get better deals, the more volume you run through each area listed above. Example of this would be with compute and storage costs going down, as we do more business. The more we understand the details of operations, the more we can optimize operations.

Access Levels
What sort of access levels are we going to provide across ALL APIs, not that all APIs will use all areas, but we should be ready for as many scenarios as we possibly can. We need to be clear of what access is the free layer, as well as the tiers of access, and any wholesale, partner, or re-sellers aspects.

My intent around access levels is to be as transparent as possible. Not all users will access at all levels, and not all APIs, and their endpoints will be available within at all access levels. The goal is to optimize access, remain as open as makes sense, while also sensibly monetizing resources to cover costs, and make a fair profit.

Pricing & Credits
I am employing a universal credit system that will be used by all APIs. The goal is to expand the unit of currencies I employ beyond just API calls, and attach a universal unit of value that can be applied across all APis. API consumers will be given a certain amount of API credits to be used each day, as well be able to buy and sell credits at various rates. 

I envision credits being the lifeblood of the API monetization strategy for my platform, and would love to see it spread beyond any single API ecosystem, and be something that all providers could put to work. The benefits of this would be seen by both API provider, as well as consumers, in helping us establish a currency for the API economy.

Indirect Value Generation
What value is generated via API operations that isn't directly monetized, but driving value in other ways. These indirect value generators are often overlooked, and under-showcased areas of operation, often resulting in API failure--always showcase the buzz.

I could see data and content acquisition grow into an area we can better quantify soon. Putting a base value on each resource in the system, and figure out how much each resource grows in size, and quality over time. Applying value to these indirect areas is something I'd like to expand upon in future iterations.

Partner Revenue Generation
Ideally any platform should be sharing the revenue and value exhaust generated via the ecosystem, providing revenue opportunities for web, and mobile application developers. There are a handful of ways revenue can be shared via API operations.

I will be expanding on these areas in the future, as I play with ways to incentivize content or data creation, or just driving API consumption well into the paid tiers. Right now many API platforms I study are essentially sharecropping plantations, reaping the value generated from developer activity. In the future, developers should be incentivized with cash and credit to help achieve platform monetization goals, which is something I want to explore via my own API resources when I have the bandwidth.

Internal Revenue Generation
Where are we making money? What revenue is generated across the platform, and then what are the breakdowns. I want to understand who my rockstar users and applications are, something that isn't isolated to external users. I am looking to craft all of my applications as individual citizens within the API ecosystem, measuring and limiting what type of access they have, and treat them like any other consumer on the platform.

The goal of my platform is not simply to make money. Sure I like making money, but I'm looking to flush out a reproducible framework for hanging each API, and making sense of it as part of my larger API platform operations. Not all APIs will be created equally, but I should be able to equally measure what it costs to develop, and operate, and apply consistent ways of generating revenue around its use. 

All of this looks intimidating when you scroll back through. However my goal is to produce a standardized pricing page that can exist across all of my API ecosystem(s), which are growing in number, and prompting me to think in this way. I need a better handle on my costs, and ultimately be able to generate more revenue to keep me with a roof over my head, food on the table, and my AWS bill paid.

While I only have a single API portal right now, I'm preparing to deploy a specific collection using APIs.json and publish as version 2.0 of my API Evangelist developer portal. I'm also looking to immediately publish a few other API portals, designed to support various collections or stacks of APIs available in my network (images, API definitions, etc.). I need a standard way to deliver on-boarding, and pricing for the APIs, and this backend framework gives me the v1 approach to that. 

Each API that I launch will have a pricing page, with each of the available service tiers as a box, and within each box it will list how many free credits you get each day, and other features available like per credit rate beyond the daily allowed limit, support elements, and other relevant details to that tier. There should also be links to more detail about partner, re-seller, and wholesale options for each API portal I launch. The API consumer never sees all of this. This framework is for me to hang each API upon, and think through it in context of the overall API lifecycle and platform operations.

I'm applying this outline to the 30 APIs I have in my stack, and then also applying it to a handful of new data APIs I'm working on. Along the way I will flush it out a little more, before I get to work on some of the more advanced pieces like a partner and re-seller programs. I'm not a big fan of advertising, but I do have some single page apps that perform pretty well, and it wouldn't be too intrusive to have some advertising on them. All of these SPAs are driven by my APIs, and they often exist as tools across my API driven content network as well.

This post will be published to my API monetization research, and this list will be published as common building blocks, that can be considered as part of any API monetization strategy. It makes me happy to see this portion of my research finally move forward, and evolve, especially since its based upon my own platform goals, as well as my wider monitoring and review of the space.