Where do APIs and Business model innovation meet? The business model canvas is used as a framework to plot the relevance of APIs for businesses and business innovation. All segments of the business model are discussed from an API perspective. For almost all of the successful tech giants that have come into existence in the past 10 years, APIs play a significant role in their success. Many of these companies Uber, AirBNB, Alibaba, Google, Apples, Amazon, Facebook, etc. are platforms where supply and demand meet, they are multi-sided business models that own the customer interface, have high valuations but do not have (the burden of) a lot of physical assets. They play a different game and use APIs to gain a competitive advantage. In this slide deck I tell the story of APIs and API management solutions through the business model canvas lens. I conclude the story with a summary and next steps to start exploring how APIs can add value to your business. This slide deck was used in a presentation at the 1st Dutch API community Meetup organized by AppyThings (www.AppyThings.nl) p.s. If you are interested in joining the Dutch API community, do not hesitate to join us at http://www.meetup.com/Dutch-API-Community/

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

3. “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

4. 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 offer
What your customer needs
What you offer
Add that
What your customer needs

5. 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

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

7. “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/

8. Value proposition and APIs
What 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

9. Channels and APIs
How 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

10. Customer segment and APIs
Which 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 API
http://developer.<yourbusiness>.com
End consumers

11. Customer relationships and APIs
What relationships are you establishing with each
segment? What makes them come back for more?
Customer lock in
Personalization
Analytics

12. Key resources and APIs
Which 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

13. Key activities and APIs
Which 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

14. Key partners and APIs
Which 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

15. Revenue streams and APIs
What 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)
Free
Developer
pays
Developer
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

16. Source: http://www.slideshare.net/jmusser/j-musser-apibizmodels2013
Some more ways to monetize APIs

17. 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 APIs
What is the resulting cost structure? Which key
elements drive your costs?
APIs, API team, API mgt platform

18. 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

19. 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

20. Let’s create!
Thank you
ANY QUESTIONS?