Freemium Access For Your API Is Not Bad, It Is Just One Tool In Your Providers Toolbox
01 Dec 2015
I get regular links sent to me, and foiks telling me that freemium API access is a bad idea. That it doesn't help your API sales funnel, and was something that was just a thing, for a brief moment in time. The folks who always bring me these stories, are not API consumers, they are business folks.
I agree, there are some really bad examples of freemium in play across the API space, and with the bad behavior we see from API consumers, I fully understand why stories make their rounds--leaving a bad taste in the mouths of API providers for freemium access.
The disconnect that allows this to happen in my opinion, is folks not thinking through their monetization, plans, and pricing in an API centric way. Folks approach it as a across the board monetization approach, and do not think of it as a tool to apply on a resource by resource basis.
Freemium is just one tool in your toolbox, and should evaluated at every step in the monetization planning for your APIs, and used, or not used, based upon your well planned on-boarding funnel for your API consumers.
Consider educational access to your API resources (also one tool in your toolbox), which is a common offering from API providers. You wouldn't offer this in all scenarios, it just doesn't make sense, but you aso wouldn't just dismiss it as a bad idea--you keep in your toolbox for when it makes sense.
I see API operations let by business folks dismiss freemium as a bad idea because they don't experience on how it influences in the on-boarding process, but I also see API operations let by developers dismiss the need for traditional sales approaches, and hurt themselves in similiar ways.
Ultimately, I recommend iterating through the list of common API monetization building blocks I've aggregated from leading API providers, for each resource you are planning to release. If you have a modern API infrastructure provider like 3Scale, you will be able to define individual plans, using a variety units of value, at different rates, rooted in who you are targeting with your API resources--make sure you have as many tools as possible in your toolbox, don't throw any away.