Apidays Paris 2023 - Productizing and Monetizing APIs, Derric Gilling, Moesif

Apidays Paris 2023 - Software and APIs for Smart, Sustainable and Sovereign Societies
December 6, 7 & 8, 2023

Productizing and Monetizing APIs
Derric Gilling, CEO at Moesif
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Transcript

1. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Productizing and Monetizing APIs
2. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Who am I? • CEO of Moesif, the leading API analytics and monetization platform • Helping API first businesses with PLG and developing usage-based pricing • I love IPAs! derric@moesif.com
3. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Manual tasks Value Through UI Full Service Rollout Automation/AI Value Through APIs Targeted Use Cases Selling Traditional SaaS is Much Harder Today
4. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved 2003 On-Prem 2013 SaaS 2023 API Authority of developers Cost of software Buying Power Shifted to Individual Devs
5. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved 5 Let’s first define the business strategy Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
6. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Each API business is different What to charge for Prepaid vs Postpaid Packaging Strategy When to invoice 1 3 4 2
7. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Transaction volume Revenue/cost share Data volume User-centric Resource Customer Cost Aligned to Customer Value
8. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Billing Strategy That Works for Customers Prepaid billing: Customer commits to credits / quota ahead of time before consumption Pros: • Better cash flow • More familiar with traditional contracts Cons: • Friction in onboarding • Harder with PAYG Postpaid billing: Customer only pays for their usage “in arrears” after service is already consumed Pros: • Less onboarding friction • Makes PAYG easier Cons: • Additional credit risk • Can be abused
9. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Packaging Strategy That Works for Growth Tiered: Traditional SaaS tiers with predefined set of features and quota Pros: • Enforces a min spend • Predictable for customer • Easy to implement Cons: • Friction in expansion • Rigid, not aligned to customer value Pay As You Go: Usage-based or consumption-based pricing based on a unit price Pros: • More efficient for customer • Less friction in expansion • Can “appear” cheaper Cons: • Can upset customers with billing surprises • Complex to implement
10. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Invoicing Strategy That Works for Finance Recurring: Customer invoiced on a schedule like each month, quarter, or year Pros: • Easier for revenue recognition/GAAP • More predictable Cons: • Bad unit economics for low cost SaaS • Complex if prepaid Threshold: Customer invoiced only after a credit threshold is met (can be prepaid also) Pros: • Reduced transaction cost • Makes prepaid easier Cons: • Harder for finance to recognize revenue • Company liability
11. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved 11 Growing an API product Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
12. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Developers need buy-in from many stakeholders Legal and Security Project Priorities Finance and Procurement
13. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Self-service reduces initial friction Legal and Security Project Priorities Finance and Procurement Click-through ToS Fast integration Manager’s Credit Card
14. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Land lots of developers first Get developers to realize value and pay a token amount Large adoption funnel Fast time to paying
15. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Then, sell through existing developers Users on Self-Service Enterprise Requirements Expand Usage New Use Cases
16. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Aha Moment Increasing Usage Accelerated Usage Self-Service User Sales Engages Identify New Use Cases PLG Sales Flywheel Sales drives usage-based expansion flywheel
17. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Scaling self-service is hard Issues during onboarding Changing business needs Billing surprises and issues
18. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Reduce support cost with a great self-service experience • Provide visibility and reports on what's consuming their quota • Provide tools to upgrade and manage their account without involving personal
19. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Avoid surprises by over communicating • Automatically notify customers when they approach or breach plan limits • If Pay As You Go, empower customers to set their own usage thresholds
20. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved 20 Measuring KPIs and Metrics Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
21. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Infrastructure metrics align to engineering goals, not product goals. Uptime SLAs Resource Utilization Performance Requests Per Minute Errors 1 2 3 4 5
22. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Product owners should focus on one of three business goals Adoption Engagement Retention
23. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Adoption: Reduce Time to Hello World First Hello World First Working App Sign Up
24. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Engagement: metrics should measure customer value eCommerce SaaS Data API Logistics API Checkout conversion rate Usage of integrations and extensions Match rate/found in database Successful order fulfillment
25. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Retention: Grow long term customers Good product retention curves flatten or look like a “smile”
26. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved 26 End of life Business Strategy Architect Build Publish Grow & Expand Measure KPIs Iterate or Deprecate Business Engineering
27. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Don’t break their stuff. Handle deprecation gracefully Leverage in-app notifications You’re using an outdated SDK
28. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved How to Monetize APIs With Moesif Usage-based billing API Product Analytics Quota Management User Guidance
29. Confidential and Proprietary. © 2023 Moesif, Inc. All Rights Reserved API Analytics and Monetization Derric Gilling derric@moesif.com https://www.moesif.com/casestudies