Getting into the customer’s context

Devon Biondi

Devon Biondi is vice president of strategy services at Mashery. She helps e-commerce, media, and technology companies align their API programs with broader business strategies. Prior to Mashery, Biondi served as executive strategist to the CEO at Tibco Software.

Devon Biondi of Mashery details how APIs allow businesses to engage with customers in their context.

Interview conducted by Vinod Baya and Bo Parker

PwC: Devon, what are some of the trends you’re seeing?

DB: An important trend is how ubiquitous connectivity is becoming. The latest research suggests that 30 countries now have 100 percent ubiquitous connectivity; that is, there’s at least more than one Internet connection at any given time for every person in that country. And more countries are following. We’re certainly far from the days where you had to wait to get to your hotel room and plug in to the connection; now you’re just connected everywhere.

Related to this trend is the diversity of devices, which is driving the requirements for significantly faster development of digital services. Previously, companies had a corporate mandate that they would support PCs and a brand of smartphones, but now in almost all enterprise environments, IT departments need to support non-sanctioned devices.

PwC: Why is that important to business?

“In the future, the way to increase the barrier to competition will be to lower the barrier to participation.”

DB: If you look at the history of business, the competitive dynamics have been changing. James Governor of RedMonk has said, “20th-century IT was about raising barriers to entry for competitors. 21st-century IT is about lowering barriers to participation.” In the future, the way to increase the barrier to competition will be to lower the barrier to participation. Digital data and digital interactions are becoming the next fertile ground for competing, creating, and growing companies. This impacts all companies, whether they are digital or not.

PwC: Mashery offers API [application programming interface] management solutions. Why are APIs important to businesses now?

DB: I think it helps to understand the analogy of APIs to the evolution of the distribution of hard goods. One hundred years ago, if you were a manufacturer, you probably also had a store and a relationship with the customer, and that was the way you sold goods. Over time, new channels developed and intermediation happened. Then manufacturers could distribute their goods through their own stores, through co-branded experiences inside another store, or through third-party retail stores.

Today, apps [as on mobile devices and tablets] are creating a new role in between the business and customer. There always have been new channels in between the business and the customer, and now apps are the new ones. Some of those apps will be built by you, some of those apps will be built by your strategic partners, and some of those apps will be built by people you have no relationship with at all.

The API is a recognition of the reality that there are just too many niches and too many ways that customers need to be served. No business will be able to do all of the scenarios. In a digital world, an API is your interface to enable other distributors.

PwC: How are APIs impacting customer relationships?

DB: Previously, the interaction between companies and customers almost always took place in the context of the business—in the store, at the website, or in the service. Now the customer is taking control of the context, and the business must get into that context.

In fact, customers are creating new context. For example, Best Buy is one of the point redemption partners for the Citi rewards program through Citibank. If I’m standing in Best Buy, which is part of my context, and I scan the bar code of a product, the app will tell me how many Citi rewards points I need to buy that product. Since I am a Citi rewards member, it is looking up my Citi rewards account and letting me know if I have enough.

Because Best Buy had an API to its catalog, it was easy for Citibank to just link to it and be in the in-store shopping context. Also, from the Citibank rewards website, customers can look up the inventory at the Best Buy store near them without going to the physical store—all through the API. By exposing APIs, Best Buy gets into the customer’s context in other experiences.

PwC: How has integration changed?

DB: One of our customers tells us that they are being forced to create compelling user experiences that must be drawn on assets and services across many groups in their company. In the past, these types of integrations took six to eight months. The integrations were custom and rarely reusable later. They essentially performed a project specification and then the integration. Then they would perform the next project specification, and so on. That is six to eight months every time. That approach doesn’t scale, and the reality is that businesses fall behind on integrations.

Another difference is that everything was a heavy integration. If there was a seemingly small need, the cost of integration could not be justified. For example, one of our customers, Bluefly, an e-commerce discount store, has an API program. For a long time the company saw that its call centers needed to answer a lot of questions about order status, because customers had no way to get updates on their orders. Bluefly built an API for order status so it could be called by the company’s IVR [interactive voice response] system, and Bluefly cut its call volume by 20 percent overnight. It would have been difficult for Bluefly to justify a multi-month project, but a lightweight approach addressed the need squarely.

Statistics we have collected suggest that using APIs reduces the development time by 50 to 75 percent or more. What previously took six to eight months to integrate can now require hours or days.

PwC: What are some adoption patterns you have seen with APIs?

DB: We see a wide spectrum of adoption patterns. Some companies have remnants of APIs from prior efforts, because certain things are close to being exposed and they just aren’t documented. Technically they are APIs, and the company just needs to clean things up. So they can reuse past efforts and refresh them with new methods.

Companies can have big API initiatives or they can start as seeds based on a particular application. One of our customers, USA Today, came to us when the iPad was to be released. The publication wanted its content on the device when it was launched. USA Today didn’t have the necessary capabilities and identified a development firm to help.

The mobile team needed to get motivated and run really quickly. To provide access to its assets and capabilities, USA Today exposed a few APIs to this development firm. The result was that the publication’s content was then on the iPad when it launched. The USA Today app became the No. 1 news app from the beginning, and the publication’s overall digital presence, its Alexa ranking,1 went from 40 to 19 over time.

Use of APIs started with an iPad project, and now all the publication’s mobile efforts are being driven by APIs because the organization has seen how it can develop quickly with APIs. Also, APIs do not need to be public at first. For USA Today, it started as a small project for an internal use case, and now the organization has since released a number of public APIs.

PwC: Are customers changing their development practices?

DB: A key change is that those who are actually building the end-user experience will first ask, where’s the API? Developers are increasingly expecting APIs in more and more places.

Also, we see that the API culture spreads gradually and virally. Someone doesn’t need to start with aligning a lot of people to the API way of doing things. In many cases, two or three people decided to expose a private API on a few methods to one development partner. Once this was in place, they realized they could expose it to the next development, and then it spread from there.

PwC: What are some best practices in using APIs that you are learning?

“The best designed APIs are designed for a public audience, even though the most value in terms of consumption will be with strategic partners. You want to design with the broadest audience in mind so you can still get value among the long tail of developers.”
“Another best practice is to look at APIs as products and at your own developers, your strategic partners, and long tail developers as customers.”
 

DB: The best designed APIs are designed for a public audience, even though the most value in terms of consumption will be with strategic partners. You want to design with the broadest audience in mind so you can still get value among the long tail of developers.

Another best practice is to look at APIs as products and at your own developers, your strategic partners, and long tail developers as customers. So companies don’t just release an API; they release a product line of APIs with different methods, access controls, service level agreements, terms of use, and so on that addresses the varying needs of this customer base.

PwC: Many companies fear opening up capabilities. How should they handle the risk?

DB: I too hear many times from clients, “There’s no way I’ll let my brand be exposed in that way.” My view is that all companies are already open to some extent; some of their data is already out there. Someone can scrape their website for publicly available data, and there is a lot there. On a website, a lot of people are getting data through means that are not doing a service to your company. However, if you expose it as you would with an API program, with terms of service and controls on ways of use, you can start to build much healthier relationships. There is mitigation of some risk in being proactive and exposing information assets with appropriate terms and controls.