Chris Hood of Google on API as Application People Interface

What is an API First strategy and how does it help marketer deliver unique, engaging and connected experiences to customers?

What are the opportunities to monetize data through APIs for businesses ? 

Chris Hood is the Head of Business Innovation & Strategy at Google. In this conversation on Jagged with Jasravee he answers the above mentioned questions and many more.

API as Application People Interface

Chris argues that those who believe that API’s are nothing but integrators, will be the first people who are going to go out of business !

It is important to look at APIs as Application People Interface because that’s what they do. They’re not just an interface between a technology and technology. But when we look at it from a business lens, and we say things like “I’m driving down the street, and I want to connect directly with my grocery store, so that I can get my Ben and Jerry’s chocolate chip cookie dough ice cream” that’s a people connector. The API is providing an interface between my car and my grocery store and therefore API is creating an experience for me.

Chris advocates the use of Outside-In approach whereas most businesses use an inside out approach. He argues that the organizations should ask a question about what is the value of connecting this system with this system? What is it actually going to give my customer?

So even if we say something like “I’m going to connect this system with this system, because it’s going to speed things up” the important question to ask is who will it speed things up for ? or Will it speed things up for my customer? If that’s the case, great. There’s value in that.

In summary, Application People Integrator is an Outside-In approach of building the API first so that it has a direct connection to a customer value proposition.

APIs as a Product or a Revenue Generating Asset

Chris observes that if we look at API’s as simply an integration vehicle between system A and system B we cannot figure out how can we monetize a connection. . But if we take our API and we package it, and we wrap some interesting context around it, we can make it something that customers want to actually buy. API thereafter becomes a product, with its own product lifecycle its own marketing and branding strategy. API transforms into a service or a product that we can sell as a package, and people may want to pay us for it. In doing so API opens up new lines of business, revenue streams, generating money. Google has got a lot of use cases where APIs have generated anywhere between, say, $50,000 a month to $50 million a year. API becomes an asset that one can distribute and sell.

And of course there are issues like privacy and data sensitivity that one has to consider. One has to get into the questions like – “Yeah, but I’ve got data and it’s sensitive, and I don’t want to fully expose it. Maybe I can’t just release all of my proprietary information, because then my customers and my, my competition is going to get it”. But an interesting way to look at this is to say, that part of that $50 million revenue from API monetization may be coming actually, from your competitors !

API monetization is not necessarily for every company. Every company may not want to expose all data. So every company has to go through a process of understanding what data they have, what data do they want to expose? What data has value ? etc. Ultimately, most organizations are moving towards an API marketplace, building an API economy, where they can actually package these API’s as products, expose them, monetize them, and then ultimately, connect them with other companies.

In summary, API economy is about creating connected experiences…. these really unique and engaging experiences that will allow other people to connect with you. It is about growing new lines of revenue, new businesses etc.

Listen to Full Talk with Chris Hood

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