Moesif’s Podcast Network: Providing actionable insights for API product managers and other API professionals.
Joining Mike Amundsen is Derric Gilling, currently the CEO of Moesif, the leading API analytics and monetization platform. Gilling is also a regular speaker at developer conferences, including API World, Developer Week, and APIDays.
As a CEO, Derric shares his experience and thoughts on how to build API products to be more beneficial to your business.
Table of Contents
- 0:50The Aha Moment
- 2:12Pricing API Products
- 4:03Developer Driven Sales
- 5:07Communication and Deprecation
- 6:39Helping Developers
Mike: Hi, Mike Amundsen here again with API Strategy for Decision Makers. As you know, I recently got a chance to sit down with Derek Gilling, CEO of Moesif, the leading API analytics and monetization platform. We were talking about the whole process of the API lifecycle; this notion of discovery, adoption, designing for that first hello and for strategic applications. Then figuring out the pricing strategy, how you sell to developers, and then working through the full cycle of eventually deprecating old APIs for new. Let’s pick up when we were talking about this notion of the developer moment, the “aha moment”. Let’s listen in.
The Aha Moment
Mike: Yeah, you know, I think when we were talking about the API, the continuous API management book with the API Academy, we talked about this “aha” moment. I forget who taught it to us, whether it was Twilio or somebody else, they called it the “Neo moment”, when somebody goes, “whoa”. I’s like they suddenly get that sort of rush. You’re exactly right in the sense that that very first “aha” moment app is often not native to whatever your environment is. It’s not integrated into your own platform yet. It’s not solving a direct problem, but you kind of get this buzz of, “hey, this thing works!”.
And I know Twilio does this, and we talk about it a little bit in the report, and I know you do this in your product space, really monitoring that whole experience along, like finding out who signs up, you know, you’re working that funnel. That funnel is really important all through the developer experience of using that API until you finally can get them to some kind of integration step. So I think that’s really incredible.
Now, assuming that you’ve got their interest, you can monetize this experience in some kind of way. That leads you to pricing, and I think that was actually one of the, another one of the really enlightening sections in the report where you talk a lot about, there’s a lot to think about in the pricing space, isn’t there?
Pricing API Products
Derric: There is, and so this goes back to what you mentioned around landing developers first. So you’re not trying to sell to the developer itself. What you’re trying to do is get them to pay a token amount, maybe it’s $50 a month, maybe it’s $100 a month, because at that point, they already see value in the platform, and they had the audacity to go ask their manager for the credit card.
So by the time that sales is getting engaged, a lot of times the developer’s already paid for a couple months worth of service. They’re paying that 50 bucks a month, they already have a working app they can show to the management team. So what we like to call this is “selling through developers to the decision makers”. In this case, the decision maker is looking for, maybe buying discounts, maybe it’s a specific integration, certain compliance requirements that they might need to meet. If you look at this process, that also means you have some type of uses-based pricing model, right?
So going from $100 a month to suddenly $10,000 a month, that’s of course what we want to do as a product, but it’s also a very delicate balance because you don’t want to piss off developers. No one wants to be blamed for that $10,000 a month bill. So how do you make sure you have the right process to identify these different developers where their usage is growing over time, week over week or month over month? That’s when sales would get engaged saying, “Hey, you know, you’re going to have this very large bill. Let me work with you on some discounts. Maybe it’s through volume discounts or something else to make sure we’re really meeting your needs and you’re able to get the most value out of what you’re paying here.” And so that’s really what sales is.
Developer Driven Sales
Mike: Yeah, and again, to me, that goes right to the consultative selling idea. What you really just kind of described is, “Look, we’ve been seeing you’re using the API and that’s really great. This is what, you know, our experience tells us, let’s get together and talk about setting up a package,” right, that’s one of the things we talk about in the report as well is getting a package that, like you say, meets your needs and stays focused so you don’t get surprises and you don’t tick off somebody along the way.
I think that’s another thing that’s unique in the API space. Because you’re focused on the time to first working app, you’ve already got them kind of hooked, right? And now what you want to do is you literally kind of want to land the fish in the boat. You want to get them so that they can do this consistently and comfortably and be a great advocate for your API.
Nothing lasts forever, everything changes over time. And you mentioned deprecation as well, which is another part of that cycle. And again, that’s a huge topic, there’s a lot to go on, but it’s important to think about deprecation pretty early in the process, isn’t it?
Communication and Deprecation
Derric: It is, and so one of the worst things you can do when you have some type of developer ecosystem is to piss off developers. And a fast way you do that is if you don’t communicate changes or impact to either themselves or their integrations or their applications.
When we talk about deprecation, it’s really important to have a process around how do you identify the impact, whether it’s to your own revenue or to your developers. So, how many different developers are impacted, what do they have to do in order to migrate, and then let them know. It’s much better to over-communicate than to under-communicate and give them plenty of lead up time before that API is actually shut off. So it might mean you have to notify developers six months ahead of time saying, this and this day is when it will be shut off.
Lastly, continue to remind them, “Hey, you’re using this API that’s soon to be deprecated, it looked like you had 20,000 API calls in the last seven days, this is the geolocation or the user agent that we’re seeing the traffic from.” So they know exactly which integrations might be causing that traffic, ‘cause a lot of times you don’t know. If I’m a developer, I’m using all these different APIs, using all these different endpoints, how do I know if I’m using this deprecated endpoint or not?
So providing that capability and that visibility is really important, whether it’s through email, through embedded dashboard, something else inside your developer portal.
Mike: Yeah, and that’s another thing that I think was so valuable when we were going through the report. This notion of helping the developers out because they might have a team in another location, another part of the world, another part of the country, just another floor in the building that we didn’t know who are also using the API as well. So like you said, geolocating, helping them figure out what the details are, so they can work through exactly who it is that they need to help upgrade.
And I think that’s a really, really important part of it. That’s another example of really living the developer life and helping developers work through that process. So that’s API Strategy for Decision Makers, and I hope we’ll see you next time in another episode.