Podcast: API Strategy

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


Mike: Hey, Mike Amundsen here and I’m with Derric Gilling. We’re talking about API strategy for decision makers. Derric and I worked on an O’Reilly report that was recently released and we thought we would bring this to some videos and talk a little bit more about it. I’ve known Derric for a couple of years. Through his company, Moesif. And it was a real pleasure to work with Derric on this project.

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APIs as Products

Mike: Why is it that products are important now? What’s changed? What’s different? Why is it important that everybody sort of think about their APIs, even their internal APIs as a product?

Derric: Well, Mike, the way that we’re treating APIs is drastically different today than it was 10 years ago. If we think even as recently as 2015, Twilio was valued around half a billion dollars and look at it as where it is now. The way that we’re selling software is fundamentally different.

You know, 10 years ago, you might have had an enterprise sales team and they’d do sales demos, pitch decks and actually sign on the dotted line before anyone is ever using the product. These days, a lot of times, by the time that sales is getting engaged, you already have developers using the API. They might be testing it in a sandbox or some type of local environment. And so it’s a much larger engagement process. And at that time, it’s mostly like a upsell, right? And so how do you make sure you can actually cover the rest of that journey before sales is engaged?

API Product Lifecycle

Mike: Yeah, I think that’s a really important element that we talked about in the report and that I’ve seen you talk about in articles on your website as well. And that is this idea that it’s a very different kind of cycle. It’s a very different kind of selling experience now that we’re dealing with APIs. Often, it’s developers that are driving the bus. It’s developers that make it happen in one form or another.

And I think the other thing that’s really interesting is you at Mozav have developed a really, I think a really clear cycle, sort of a product lifecycle. Every product has a lifecycle of something, but they’re unique for APIs. And I think there are lots of things that we need to cover, right? When we think about a product lifecycle for API.

Derric: Indeed, and so in the book itself, we talk about five different steps around that API strategy. You start off with discovery and adoption, and then you move into the monetization part. And of course that includes pricing and packaging. But last but not least is how do you actually handle deprecating an API? What does that end of the lifecycle look like when we start treating these as products?

API Discovery and API Adoption

Just touching on the first two, discovery and adoption. One of the biggest differences today is that developers have a lot more autonomy and they’re actually involved in that decision-making process. They get to pick and choose which APIs, which tools they want to use. And that means by the time that, again, sales is getting engaged, they’re actually leaning on these developers, who is already been playing with the API. And they’re actually excited to bring this up to their manager to say, “Hey, this is what I built. I think this could be important at the organization.”

So when we think about adoption, that means it’s really important for these API-first companies to actually pull developers into their ecosystem, whether that’s through inbound marketing, through partner channels, through really anything that you’re doing around the marketing side should be pulling people into your ecosystem versus trying to push the product onto developers.

The worst thing you could do is have a developer see these random emails from a salesperson trying to push that product and they’re not even excited yet. They’re not going to champion or even spend the time to look at this API if they’re not excited.

Developer Evangelists

Mike: Yeah, I think that was a real learning moment, this notion of pull rather than push. And I think it really explains the rise of developer evangelists in the API space as well, because that’s one of the key ways that you can really pull developers onto your platform or into your product world; by showing them what’s possible and evangelizing the notion of solving problems.

So I think that’s a really, really interesting way to think about it. I agree with your view on adoption too. You’re trying to get to that “aha” moment, right? That time when developers get that passion, get excited about something.

I think Twilio knows this really well because I remember years ago, Twilio had a campaign to decision makers, which basically said, talk to your developers. So it was really keying right into that notion about how important developers are in this life cycle. And I think you talk about that in another aspect as well, and that is this sort of idea of monetization, right?

So when you talk about monetizing, you talk about landing developers first. What is that really? What’s that about?

Monetizing APIs: Developer First Growth

Derric: Sure, and so when we talk about this activation or adoption process, there’s two key metrics we like to speak on. The first is time to first hello world, and the second is time to first work out. And it’s really important, especially when we look at the first metric, that encompasses your entire developer experience, and it can be a Northstar metric for the entire product team or even the company.

When we think about building out a great developer experience, what time to first hello world is, is the time it takes a developer to sign up and make that very first API call, whether that’s through a tool like Postman or curl command or something like that, they’re at least investing enough time to test out the API.

Now, the tricky thing with “time to first hello world” is they haven’t actually received any value yet, other than just a very, very little taste of what the API could do. And that’s where we get to this next notion of ‘time to first working app’. Some people might call this’ time to a revenue app’ or “revenue generating app”. And what that means is a developer got to that “aha” moment, which might mean sending over text messages, 100 text messages, I visit telecommunications API, it might mean a number of transactions sent through the API. And that’s what we really mean by time to “first working app”.

Mike: Derric, you’re so right. We’ve really covered a lot here in this episode, talking about adoption, discovery, the time to first hello, the actual working strategic application, and there’s so much more.

Now, I’ve got lots of questions about pricing and planning your modifications and eventually your deprecation of the old APIs, but we’ve kind of run out of time here. So we’ll cover those details in our next episode of API Strategy for Decision Makers.

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