Spreading the open innovation business model using the API

Open innovations can be sustained by the Application Programming Interface (API) and benefit from the benefits of this “collaboration”. The API not only stimulates the development of innovations, but also forms new revenue streams, strengthens your marketing campaigns and expands the scope of influence of the applied business model. It's time to understand that the API is necessary for your business.

The API "keeps secrets" best

At the API days conference last December, @CyrilVart (@Fabernovel) gave an exhaustive presentation of "6 reasons why the API will change the look of your business" ("6 reasons why APIs are reshaping your business"). Let's take a closer look at it and, combining the information received with our own experience, we will evaluate what this new exciting area has to offer.
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An API is a protocol that is used by software components as an interface to interact with each other. In other words, the API is a connecting element between functional components that connect with each other like blocks of the Lego constructor.

API still seems to you something wild and distant?



Think again, some APIs are pretty well known, we just don't call them that.

• The “Like” button on Facebook, which is designed to shape the structure of public recommendations, is based on the API, i.e. You can enter it on your website just by inserting a simple line of code.
• The Twitter interface, among other features, also allows tweets to be displayed in other applications, about 13 billion times a day use this, and over a thousand applications were based on the twitter interface.
• The Google API (including the Google Maps interface, a supporting landmark on a map of many web sites, or the Google Adsense interface, which allows advertisers to automatically upload text, images, videos, and multimedia advertising to Google’s web sites) requests 5 billion per day.

API for creating collective innovation

API promotes innovation. We placed the API at the center of a model of rapid innovation and modular design (Modular Design and Rapid Innovation model). It brought a number of useful results:

• Acceptance: API-modules facilitate the adoption of innovations, transferring control to other participants in the process, allowing them to feel their involvement and set their own parameters based on your platform.
• Collective creativity: the API does not impose anything on anyone, but on the contrary, it induces to create, this is the so-called “set of design tools”, the practical embodiment of the principle “Create with someone, not for someone.”
• Flexibility: Due to the fact that these applications are created for the end user and the API components are scattered, the API development team is given complete freedom of action.
• Speed: API forces innovation, allowing parallel code execution. The component can be used as a center that receives parallel connections from different applications.
• Multifunctional development: the requests of various applications cooperate and expand the functions of the component within the mechanism of self-improvement of innovations. The progress of each participant benefits everyone.

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Fabernovel gives great importance to such a valuable API contribution to the development of production: “API is a software module that allows someone to share data, content and functionality with others, giving others the chance to create new services based on this data, content and functionality. opportunities. This point of view is supported by the example of Fitbit , a player in the market of "smart" things: Fitbit is a fitness tracker that captures health readings and training progress data; it is based on an API to allow third-party developers to create fitness applications using Fitbit data, that is, information such as distance traveled per day, calories burned, the amount of food consumed, and weight. Based on the Fitbit interface, 20 applications were created using innovative approaches to the application of the obtained data on training progress and health indicators.

Instead of thinking about the development and implementation of research and development [R & D Eng. Research and Development, R & D] using the API, it is better to take the API as a tool for using the collective mind that can attract the abilities of many people: the larger the eye, the easier they will find and correct errors, and therefore improve the ecosystem.



According to Professor Chesbrough (Chesbrough): “the Open Innovation model involves the use of the resources of other people to move themselves.” When Open Innovations pull down boundaries to find innovative technologies in the outside world, there is no better currency than API.

APIs in common business models

In addition to stimulating innovation, Fabernovel mentions five key results of using the API in business:

• New sources of income
• New distribution channels
• Expansion of partnerships
• Fine tuning control (API does not open access to everything, but allows you to control a lot)
• Organization flexibility (using internal APIs allows you to review the role of IT and speed up teamwork)

All these effective stimulants enable APIs to expand your business: an API is more than just a collection of components.



I picked up several iconic companies that managed to use the full potential of the API:

• Expedia has opened the API for its partners so that they have access to orders, photos, search results, customer reviews: today Expedia has 10,000 companies and has annual revenues of $ 2 billion, 90% of which are derived from the API.
• Based on an API that provides a range of CRM services in the cloud, Salesforce has built a powerful business model that is not tied to a physical point of sale and software installation in the field.
• Netflix opened the API in 2008 to allow developers to use company resources (movie catalog, queue management, rental history) and create a creative business: today more than 800 devices can play Netfix content and about 20,000 developers use their API.
• Facebook Connect allows users to log in to many other sites using their Facebook profile. Third-party developers can add the “Login with Facebook” button using the Facebook Connect API. The Facebook Connect interface has standard registration data, with the help of which a universal ID is generated for the digital world and, moreover, it allows Facebook to build partnerships on a global scale, with a minimum of resources.
• Amazon Web services offer a wide range of services (storage services, databases, computing facilities, servers, application services, deployment and management) available through a set of APIs. There is a fee for working with each of these services, which means that Amazon very closely follows the experience of using the service by each client. In 2011, the company earned $ 750 million.
• Comcast, America’s largest cable television provider, has created a dozen internal APIs for teams to easily share data and solutions. Today, teams can create a new product and evaluate user experience faster than ever, thus creating new sources of revenue for Comcast. To share resources through the internal API, you need only 30 minutes, and not a month, as it was before.
• AT & T is now offering 79 APIs to third-party developers (Future Center Blog), and Orange has redesigned its sister site, Orange Partner , to show its API.

“Working with an API is as natural as breathing”
The API family is expanding: Marc Andreessen (Marc Andreessen) distinguishes between viewing API, plug-in API and online API, where code developed by third-party developers runs inside the platform, and this type of Andressen determines how the most promising.

Developing an API will help you focus on your core business, as well as on using joint innovation, creating new business streams, by connecting the already mentioned functional Lego-blocks: “when every business is an API, new companies can be formed almost instantly, by simply joining ", - Mark Pesce considers. The API is a strategic tool for reorganizing your business.

Having tried to apply it once, you will not stop. In my case, since I started a new innovative project, I unconsciously thought about two products: an end-user oriented service and a corresponding API. Each of them requires its own design approach in order to become important, consistent with the goals of users.

Developing an API for your business gives you a new way of establishing your company and a new scale of activity: because The future system consists of many small independent components, and also uses any type of connected object to share resources, the growth of the company can occur at lightning speed.

“We are witnessing the“ APIs of business processes, ”says Robin Vasan. This is a process during which enterprises are forced to reorganize themselves as an API ( @mpesce ). Now is the time for innovators to enter the game, and sellers to start thinking in API categories.