Alex Gaber

August 20th, 2013

APIs & Hackathons Solve the Innovator’s Dilemma

HackathonEach and every large enterprise began as a brand-new venture created by a few co-founders. The team was small, nimble and innovative enough to carve out a market leadership position through execution and differentiation. As the company grew from a few co-founders to 500 employees, 5,000 employees or 50,000 employees, its pace of delivering innovation slowed. Large companies such as Apple, Intuit and Facebook have continued to prove that this innovator’s dilemma is avoidable. For the rest of the Fortune 1000 – companies that don’t necessarily have access to the Silicon Valley magic – the trend in recent years has been to launch “innovation labs”.

One of the earliest examples of this was Bell Labs at Lucent, with many other enterprises now following suit, such as:

The question is: How will a small team within a large enterprise drive a cultural shift towards innovation and not get stifled by the old guard, which is simply stuck in old habits and processes? The solutions these innovation labs are bringing back to top executives almost invariably involve APIs and hackathons.

The first step is unlocking data via APIs. When a team of innovators at a large company is trying to achieve something disruptive and market-changing, the team members will need access to data from across the company. If they cannot get access, they will be delayed, get demoralized and often just give up and move on. When a company centralizes its APIs across all backend systems, it enables employees, partners and even external developers to build and innovate.

The companies with innovation labs mentioned above have also set up robust API platforms to enable innovation. Some APIs are only available to employees, some to partner companies and others are open to all software developers. The key concept is that they have removed the deadbolt locks on their data and replaced them with APIs that intelligently free those resources, auto-provisioning access based on who, how and what access is needed.

Opening up APIs enables innovation culture, increasing the pace of product design, creation and execution. Once these technology enablers are in place, enterprises can run internal and external hackathons to make developers aware of and inspired by what is now possible. These fast-paced competitions set goals to take creative ideas and turn them into prototypes or minimum viable products.

Hackathons are designed to help developers quickly try out new ideas and get instant feedback. This is similar to the iterative product development methodology described by Eric Reis in his book Lean Startup.  Some enterprises call it the migration from a linear process such as “waterfall” to more agile “scrum” or “customer-driven development” processes. Similarly, “DevOps” has been used to describe increased collaboration and communication between software development teams and IT operation teams.

This is how smart enterprises now solve the innovator’s dilemma. Product lines are reinvigorated and employees are inspired to be more entrepreneurial and productive.  Customers are getting products that take advantage of new technologies. Enablement through APIs alongside action through hackathons solves the dilemma and seeds continuous and disruptive innovation.

June 24th, 2013

Are APIs the New Toll Booths for the Information Superhighway?

APIs can turn Obama’s Open Data Mandate into city, state, and federal government Revenue.

As the recent Obama Open Data mandate is intended to increase federal government transparency, many agencies are forced to compliance yet have not been provided with additional funding.

The solution to this is tiered API plans and pricing that acts like toll roads for the data flowing out.

As a nation that derives most of its revenue from taxation of citizens and businesses, a new revenue stream can be created from placing tolls on the government data that flows on the information superhighway.

The data flowing out of the US Govt Federal Agencies, States, and Cities is a valuable bi-product of government operations. All of that government “big data” can provide businesses, US and International, with critical information about how to optimize and improve their products and services.  For example, the insurance industry can fine-tune their rates for health and auto insurance policies based on crime data, census data, and IRS data.

Just as drivers pay access to use better and faster roads, data consumers (businesses or citizens alike) will pay for access to use better and faster data resources.  The driver license is represented in the form of an API Key.

The maps we plan out our driving trips are similar to how data is represented through an API Explorer.  The road speed limit signs are represented through API Throttling and Rate Limiting. Will the government eventually launch a Department of API Access, that provides a similar function to a Department of Motor Vehicles?

The tollbooths on the information superhighway are API Gateways, and to pass through either one, the government can require good old-fashioned monetary currency for access.

May 16th, 2013

Are APIs Making the Biz Dev Role Obsolete?

Business Development AndroidThe role of the business developer has traditionally been to initiate partnerships and follow through by ensuring some sort of integration is implemented.  As enterprises become more software-driven, integration itself increasingly comes through APIs.  This may mean that the implementation of API-driven “partner portals” is replacing traditional business development practices.  A recent article from Wired claimed that 70% of all jobs will be replaced by robots by the end of this century. Are APIs and partner portals the robots that will replace manual business development processes?

Here’s an example of how a business partnership might come about these days. Interaction with an online API partner portal will act as the initial “conversation” that leads to the partnership. If you want to integrate with Salesforce.com, you go to the Salesforce partner portal, figure out the relevant SDK/API, build an app and then submit it to the Salesforce AppExchange.  You don’t ever need to actually talk with anyone at Salesforce to become a business partner with the company.

Another example is the way many companies now enable access to their Web sites via Facebook Connect, Google+ Login or Twitter Login. This represents the first step towards establishing a business partnership with Facebook, Google or Twitter. It’s not new in the Web world and has been discussed for years. What makes it relevant to this discussion is the way it’s being applied to out-dated business processes and practices.

Great platform companies have realized this, “robotized” their business development processes and rationalized their business development teams. As robots are to manufacturing, APIs are to business development. Better technology means that we can focus our human resources on more valuable activities, since handshakes are now being made over OAuth instead of costly dinners and drinks.

March 7th, 2013

API Business ROI

API ROI WebinarNumerous measurements exist for APIs. On the technical level, these metrics are fairly well understood. However, on the business level, there is a great deal of confusion over how the effectiveness of an API program can be accurately measured.

Layer 7’s March 14 webinar, ROI for APIs – which will feature input from TechCrunch and AT&T – should help to clear up some of this confusion. In particular, the webinar will focus on how hackthons can be used to gather valuable data for API ROI measurement.

How you measure your API ROI will depend on the purpose your APIs play in the greater business picture. Therefore, to provide a little primer for the webinar, I thought it would be helpful to give examples of a few API business models and how they might generate revenue.

  • Per API Call
    Text messages sent via an API are billed at $0.01 per message
  • Per API Payload
    Voice transcriptions via an API are billed at $0.01 per word
  • Transactional Revenue
    An API call delivers a purchase
  • Firehose API
    A monthly subscription provides unlimited API access
  • Platform API
    An existing SaaS platform provides an API for partner integrations

To learn more, register for the webinar – ROI for APIs: Using Hackathons to Evaluate Your API Program featuring TechCrunch and AT&T.

January 17th, 2013

Layer 7 Hackathons: 2012 Round-Up & 2013 Plans

Las Vegas HackathonTo follow-up on my previous post about Layer 7’s hackathon activities, I wanted to provide an update on more events we’ve been involved with, as well as mentioning some of the exciting things we have planned for 2013.

Las Vegas Mobile App Hackathon (November 16-17)
The local developer community is thriving in Sin City, which may be a surprise to many. I was very impressed with the talent of the developers in Vegas, most of whom were writing native Objective C or Java for their iOS and Android apps. Also, the local PhoneGap user group manager was onsite, providing support for Adobe’s app development framework. The apps produced were quite polished and impressive. Several included API integrations while others came with plans for future Web integration of APIs, to add context and information.

Miami Mobile App Hackathon (December 14-15)
This hackathon brought an impressive group of sponsors together including AT&T, Microsoft Azure, Blackberry Dev, GitHub and – of course – Layer 7. With over 200 signups and some highly technical evangelists sent by the sponsors, I was excited to see what kinds of apps would be produced. The developers mashed together numerous Web services using native code or PhoneGap. It was great to see the local developer community come together, with numerous local start-up incubator leaders onsite scouting for new talent and investment opportunities.

For 2013, Layer 7 will once again be joining the AT&T Hackathon team for several events. Many organizations with APIs powered by Layer 7 will be promoting their APIs and providing prizes at these events. Stay tuned – we’ll be helping evangelize a lot of great APIs in 2013!

Find out more about upcoming Layer 7 Hackathons