5 Reason Why Your Company Needs an API

(published a year ago on QConnects)

Over a month ago, the world of APIs witnessed an inflection point in its evolution. Both Intel and CA Technologies acquired the API management companies, Mashery and Layer  7, respectively. The acquisitions happened amongst other positive activities in the world of APIs. These are all clear indications of the critical role APIs are playing in our increasingly interconnected, multi-platform world of commerce.

So how does this news impact your company? If yours is one of the few out there with a healthy Open API program, congratulations! You’re well positioned to take your business to the next level.

If you’re still contemplating opening up your API or creating one from scratch, you might be wondering if it’s really worth all the trouble and overhead. I can’t say I blame you. The API Economy is a fairly new concept that varies depending on the business goals and strategy of the company.

At Edmunds, we opened up our internal APIs to the world a couple of years back and we didn’t know what to expect. We had lots of questions like: Will developers use the APIs? Are we compromising our core business by giving up free access to our data? How are we going to make it ROI-positive? Today, our open APIs are used as a critical capability to expand our brand name and business reach, enabling us to forge new partnerships and support automotive innovations happening outside our ecosystem. We answered our own questions along the way and learned a ton, with the help of many in the API community, including Mashery.

An API is a gateway that enables developers to communicate with your systems in one of two ways: Reading out of and writing to your system. It’s also a contract; a clean, simple and standard contract between your company and the developers of the world, including yours. This contract frees developers to focus on the business goals they’re trying to achieve rather than the tech details that can take days and weeks to resolve. So if you’re still on the fence about APIs and their role in taking your business to the next level, maybe these five reasons could help make your decision easier:

1. Mobile Enablement: Let’s say you want to build a mobile app for your business. You will need a way for the app to communicate with your servers to get and set the right data points. Imagine doing that without an API. Yes, it’s doable without one, but think of the effort it’ll take to maintain, scale and update that app. Besides, most developers won’t build an iOS app without a data API. No business can compete today without mobile presence and having an API is an integral part of enabling that presence.

2. Innovation Acceleration: APIs lower the barrier to innovation at a company. When your developers have access to data in a clean, simple and standard way, they are better equipped to innovate by focusing their time and effort on the customer needs instead of how to get the data they need.

3. Partnership Enablement: In the not-so-distant past, the data exchange between your company and your partners was done through CSV files that are FTPed periodically to a remote server. Unfortunately, that approach is long dead because it doesn’t scale. Enabling external access to your systems through an API has its benefits:

  • Scalability: Partners can access the data they need when they need it. No need to compile yet another data file to satisfy a slightly different use case needed by your partner. You provide the data and put the power to access it in your partners’ hands.
  • Data Integrity: No more stale data! No more, “oh, we need to FTP a new file to reflect the recent changes in data.” The data available through the API is the most up-to-date data you can get. Period.
  • Control: If for some reason you and your partner part ways, you can terminate their access quickly and easily.
  • Analytics: You will get full visibility into what data your partners are using and how often they’re getting it. This could help you optimize your API and offer your partners more insight into data usage that you wouldn’t get with uploading a static CSV file to an FTP server.

4. Branding: APIs help get your brand name out there through 3rd-party implementations of your data. For example, the Edmunds API requires entities that use it to give us attribution by showing our logo on their site and linking back to us. This helps cement the fact that we’re the authoritative automotive data provider out there. That’s powerful, passive marketing we all should tap into.

5. New Business Model: This is largely dependent on your strategy. At Edmunds, we don’t charge for our API. We use it as a critical capability to help us advance and grow our core business. For you, it might make sense to use an API as another revenue stream for your company by charging a licensing fee for its usage. Or maybe you want to have a tiered system where you offer a free, basic and gold access plans for different audiences. We are seeing that charge-free APIs are much more attractive to developers and potential partners than their counterparts. Companies are actually switching to our API from our competitors’ because our data is good and it’s free.

So, Are you ready to open up your API?

Hackomotive is Not Your Daddy’s Hackathon

After running internal hackathons at Edmunds.com for the past four years, I got to run my very first public hackathon at the company last week: Hackomotive: Reinventing the Car Shopping Experience. Our goal was to reinvent the car shopping process to make consumers love buying cars the way they do an iPhone or an item off of Amazon: simple, pleasurable and easy.

Hackomotive wasn’t going to be your typical hackathon where the participants needed to build a software prototype in order to win. This was going to be a business focused hackathon where prototypes of any kind, software or otherwise, were permissible as long as they told the story behind the proposed solution.

It was also going to be an Edmunds-sponsored hackathon. Translation: it’s going to be first class. This wasn’t going to be your daddy’s typical hackathon. This was going to be an event.

And it was 🙂

The idea for Hackomotive was born on June 11, 2012, after I got back from frog’s Reinvent Business Hackathon in San Francisco. I was so inspired by that event that I suggested to the Chairman of Edmunds.com, Peter Steinlauf, that we hold a similar event at Edmunds but narrow the scope to the car shopping experience and open it up to the public.

He loved the idea. Six months later, Hackomotive happened:

Thursday, Dec 20th – Hackomotive Announced!
Tuesday, Feb 26th – Evening Reception
Wednesday, Feb 27th – Day1
Thursday, Feb 28th – Day2

The event was a big success with folks already asking about when the next one will take place. I was humbled by the passion, commitment and positive spirit everyone brought to the event. There was a buzz in the air, and on the last day, the event crescendoed into a very high note when two teams, Tegrity and MyMotive, were crowned top winners and walking away with $10K each.

Needless to say, the event didn’t just happen.

It was the result of months of long and thorough planning by the following core team members that have grown to be my family at work during the past six months:

And Phillip Potloff, the senior executive who made sure we got what we needed to make it all happen.

The event literally wouldn’t have turned out the way it did had it not been for the dedication and thoughtfulness of the aforementioned talents. There was never any drama or unhealthy stress going on throughout both the planning and execution phases of the event. I learned so much about event planning from each and every one of them. I can’t wait for us to work together on something else very soon because I know it will be, dare I say, perfect.

Lesson learned: Want to put on a stellar event? Start with the core team. (thank you, Phil.)

Car shopping is an experience that affects us all and solving it is in our collective best interest. Everyone was welcome, as long as they were excited to join us and passionate about re-imagining the car shopping experience. As a result, we ended up with an incredibly diverse group of people for whom many this was their very first hackathon. Ever.

I’m not even going to cover the details of Hackomotive in this post because someone has already done that better than I ever could.

Matthew May, Hackomotive’s master of ceremonies, wrote a three-part article on the event starting with the evening reception and going into the first day where teams were formed and problem statements declared, and finally ending with coverage of the last day where judges deliberated and the winners were announced.

To stay abreast of everything that happens next, follow us on Twitter: @Hackomotive

Hackomotive for me was one of the best experiences I’ve had in my professional career. My hope is that it inspires other hackathons the way frog’s inspired it. Finding solutions that work for issues that matter is best done when a diverse group of creative minds physically converge on a single location to innovate for a very short, but intense, amount of time. I would love to see the same event happen in industries that haven’t been disrupted yet, like Travel, Housing, Government, and Finance. If you run one, I’ll be there in a heartbeat.

Here’s to the next hackathon that inspires us all!

The Secret to Success, According to Conan

“I think one of the reasons Saturday Night Live has been so successful is that it’s almost brutally unsentimental about its past.” – Conan O’Brien.

I wish people, companies and countries heed that advice.

We spend too much energy clinging on to our past selves and accomplishments that we don’t move forward. To be successful in life (and work), you need to MOVE ON. Excellent advice.

Entitled Much? The Yahoo! Memo That Irked America’s Tech Community

Marissa Meyer, Yahoo!’s CEO, stunned her company’s 11,500 employees when she sent out a memo on Friday that read in part:

Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.

Here’s the entire memo. Make sure you read the comments.

The response to the memo so far has been mostly negative. How dare Yahoo! reverse its policy, some cried. Others wondered if Meyer thought this was the 1980s. Some were just downright obnoxious, calling the memo a desperate move by a dying company.

I don’t work at Yahoo! and I couldn’t care less about their internal affairs. I’m also not here to rag on remote workers.

What bugs me is the temerity of the tech community in criticizing a company without knowing anything about the reasons behind its decision to revoke a popular policy. There’s a sense of entitlement that has permeated the tech world over the past 12 years and this exercise in acrimony is a testament to that very sad state of affairs. This is what this post is about.

“Everything is Amazing Right Now and Nobody’s Happy” – Louis C.K.

This unfolding showdown at Yahoo! reminds me of Louis C.K.’s bit on how this generation is spoiled and easily irked by the most inconsequential of things, even though we live in the most amazing time in history. In this particular case, the fact that Yahoos complain about going into work like it’s such a terrible inconvenience illustrates Louis’s point very clearly.

Speaking of entitlement, I interviewed a guy once, fresh out of college, who expected to get paid six figures on day one because, well, he went to Stanford. He didn’t understand the concept of “paying your dues”. I asked him, “do you even want this job?” He replied, “yeah sure, why not.” He was 22 (I think). He didn’t get the job.

But I digress.

“This aggression will not stand, man” – The Dude

Remember when Mr. Lebowski asked the Dude if he was employed?

The same surprise seems to have hit the tech world’s El Duderinos when they heard about the memo. Unlike the Dude’s, their response wasn’t nearly as funny.

Shouldn’t people be happy they’re employed at one of the world’s top companies? Do people actually think it’s easy for companies to reverse a popular policy without having a strong reason for doing so?

Working Remotely Works (for the most part)

I get how the remote-working environment works for some folks and how cost-effective it is for companies. I get it. But Yahoo! is not just any company. It’s an innovative company that’s in revival mode trying to compete in an extremely cutthroat environment.

Working remotely is great when your tasks are clear and ready for execution. It’s great for call centers according to a recent Stanford University experiment:

Home working led to a 13% performance increase, of which about 9% was from working more minutes per shift (fewer breaks and sick-days) and 4% from more calls per minute (attributed to a quieter working environment).

The experiment was conducted (PDF) on call center employees at a Chinese travel company.

So it works. But does it work when the company is in the business of generating new products and innovations? I wonder if Apple has a work-from-home policy for its designers and engineers? Does Facebook? How about Google? I honestly don’t know. I would love to get some data on that.

Face-to-Face Time and Innovation

There’s a reason companies like Facebook, Google and Apple spend millions of dollars on their campuses. From gyms, restaurants, soft-serve machines to daycare and tennis courts. These campuses are built like colleges. They’re meant for people to live and work there. This kind of environment maximizes the face-to-face time people get to spend on the job. Whether the time is planned (i.e. meetings) or organic (i.e. chance hallway encounters, last-minute lunches, impromptu brainstorming sessions, beer after work, …etc)

Great ideas happen when creative minds bounce ideas around by the water cooler or the espresso machine. They happen when the team is close and conversations flow without the awkward energy induced by unfamiliarity.

These conditions do not exist in a remote-working environment. Innovation doesn’t happen remotely. Steven Johnson talks about the Adjacent Possible and Liquid Networks in his book, “Where Great Ideas Come From“. Both concepts require the physical presence of creative people in order to work.

Remote workers might have a great work/life balance and the company that employs them might be saving money in the process. But at what cost? There might be no negative cost incurred if the company is in the business of executing tasks. Law firms, accounting firms, call centers and newspapers might find it a godsend. They cut cost dramatically and their employees are freer. It’s a win-win situation.

But when you want to innovate (I mean, seriously wanting to innovate), you need your talents to be present to feed on each others ideas, passion and enthusiasm. You need that energy around the office. It’s good for teams and their morale and it’s crucial for innovation.

Parting Thoughts

I’m sure Marissa Meyer had a good reason for revoking the beloved perk to which everyone feels entitled. Instead of revolting, this is the time for the El Duderinos to abide. If the captain of the ship decides that she needs all hands on deck in order to save the ship, it’s your duty to comply. Don’t feel like it? Leave.

Seven Practical Themes From The Lean Startup Conference

Earlier this week, I attended my very first Lean Startup Conference in San Francisco. I was invited to sit on a panel discussion of the lean startup practices in the enterprise by the good folks at Neo (thanks, Josh.) I spoke about my my experience at Edmunds.com and both the blessings and challenges that go with applying the lean startup principles in the context of a mature business.

Throughout the conference, many inspiring speakers told stories of successes and failures; dos and don’ts. There was a lot to take in (kudos to the event organizers for packing an impressive lineup! Seriously, my brain is still swollen from the data intake!)

After a few days of processing everything I heard, the seemingly disparate concepts started coalescing in my head into themes of lessons learned or best practices or whatever you want to call it. These are beacons derived from real-life experiences to help guide us maximize our chances for success and avoid unnecessary failures.

I distilled them down to seven main themes that every entrepreneur or change agent should live by. Here they are in no particular order:

Just Do It

Lean innovation and disruption is based in action. If you don’t do, then what the hell are you doing? We live in an incredible time where creating high fidelity software is easier than ever. With tools like Heroku, Twitter Bootstrap, Django or Ruby on Rails, Google Analytics, and Facebook Canvas, validating a product by building a minimally viable version of it, or an MVP, and putting it in front of real customers is relatively a no-brainer kind of affair, yet not many people do it.  In his talk, Steve Blank stressed the importance of “doing it” as opposed to reading or talking about how it’s done. If you work at a large company, use the tools aforementioned to “do it.”  If you can’t code, try to onboard a developer to help you out. If you can’t, then maybe the universe is trying to tell you something.

It All Starts at The CEO Level

Senior executives to companies are the VCs to startups, for better or for worse. If your CEO doesn’t truly believe in validated learning and experimentation, the spirit of the lean startup is dead in the water in that organization. Many senior executives give good lip and rarely follow up with action. Beth Comstock from GE spoke about the protected class of ideas at GEThese are innovation teams believed in and protected by the CEO and are set up for success (i.e. they are funded, removed from the day-to-day chaos, …etc.)

It’s Not About You; It’s About The Team

Eric Ries stressed this point several times as did other speakers: in order for you to be successful, you need others to believe and embrace the lean startup principles as well. It was almost a call to action: how to inculcate these principles in our peers and organizations? How do we create an ecosystem in which validated learning is a core value? It was almost a call for evangelism. I believe the best way to show others the way is to lead by example. By “just doing it,” others will follow, especially after seeing the value of the ideas in practice.

Talk to Your Customers

We’ve all heard the “get out of the building” cry for action, but it all comes down to engaging with your customers and learning what their needs are. That’s accomplished by talking to customers in person or virtually through usability testings or even through collecting behavioral data through Google Analytics. As long as you’re “listening” to what customers are telling you and adjusting your product accordingly, you should be fine.

Cut The Crap!

My personal favorite learning from the conference. This encompasses cutting unnecessary features out of your MVP to speaking to people in the language they understand without the jargon. I find myself struggling with this a lot. Just because you understand what an “MVP” or “validated learnings” mean, it doesn’t mean that the person you’re talking to understands them as well as you do if at all. Taking the time to adjust your language to the audience before you is a crucial tool that ensures proper onboarding, understanding of, and ultimately the success of your project.

Use Android to Validate Mobile Products

I really liked Matt Brezina’s talk on Rapid Mobile Development and his contention that all products, including mobile, can be validated fast. This gets really important in mobile development since iOS development doesn’t lend itself to rapid development, given Apple’s tedious approval process. Matt’s suggestion to use a different platform for rapid testing mobile products is really interesting. Doing whatever it takes to find out if there’s a market for your product before building it out will in the end save you money and time. No one wants to work on an app or product for several months and have no one use it in the end. Now that would be heartbreaking.

Having Daily Outcomes

This was one of the learnings I spoke about from my experience. Validating a hypothesis or releasing a feature/test/fix every single day is important for success…and morale. Having 3-week iterations promotes procrastination and lots of wasted time. If you break down your product properly and “cut the crap” brutally, you will end up with very small tasks that can be tackled on daily basis. The team needs to leave for the day with a sense of accomplishment. This practice isn’t common in big companies and one that the lean startup spirit could help bring to the table.

These are the main themes that jumped at me. What do you think? Did I miss something?

I left the conference inspired to continue embracing the “just do it” mantra but also doing a better job in reaching out to different people across the company to help institutionalize the practice of validated learning and rapid experimentation. What will you do differently with these learnings in mind?

Lean Innovation: How to Become an Effective Innovator [UPDATED]

Yesterday, I gave a talk on Lean Innovation at the very first Edmunds Tech Conference. Before I started my talk, I played this Louis C.K. video:

Very funny, but it also set the tone for my talk. We do take innovation for granted. We do so because our expectations are continuously resetting and normalizing that unless we start teleporting people tomorrow, no one is impressed.

My talk defines innovation by stating what it is and what it is not, and how lean innovation is different. At my job at Edmunds, I took on two projects with highly uncertain business values: the open APIs and Facebook Timeline integration. Through the process of implementing both, I learned a lot about bringing highly uncertain products to customers and making them work. I felt I needed to share that with my colleagues and now with you.

Most importantly, I truly believe that if you cannot recognize innovation you can never create innovation. 

Innovation has four cornerstones:

  1. Creativity: vision and ideas are impetus of innovation.
  2. Execution: acting on those ideas is the realization of innovation.
  3. Business Value: what separates innovation from invention is how the value proposition that consumers adopt.
  4. Evolution: innovation is iterative. If you’re not iterating, you’re not innovating.

What makes innovation lean is the high uncertainty surrounding the business value of the innovation. When you think you know what people want but you don’t really know. That’s when you have to innovate the lean way.

Effective innovators are:

  1. Dreamers: You gotta dream and dream big. Tune out the naysayers and the eye-rollers. Dare to see things differently and believe in your vision.
  2. Fighters: Armchair and fair-weather innovators are what gives innovation a bad rap. You need to fight for your vision.
  3. Doers: You can dream all you want but if you don’t do something about it, you’re not innovating.

Here’s how to ensure your lean innovation is effective:

  1. Set Daily Outcomes: when you’re innovating, time is not on your side. You need to test your hypotheses and validate them quickly. You can’t think in weeks or months. You need to think in hours and days. Set a daily outcome that you have to deliver on. You’ll be more productive, much happier as a person, and well .. more innovative!
  2. Know Your Tools: You cannot innovate without knowing how to build, test, deploy, market and measure your innovation!
  3. Measure Everything: Since you’re dealing with high uncertainty, you need to measure everything you can possibly measure. Otherwise, your results might be skewed (invalidating a valid guess or validating and invalid guess) and in turn your product won’t be successful.
  4. Find Your Allies: Like anything else, you cannot do anything worthwhile alone. Find people you trust to collaborate with you.
  5. Do It: If you don’t do it, it doesn’t matter. Doing can take on various forms. You can code or put together a team that does. Whatever it is, you need to do by being involved and ensuring that the project is moving forward.
  6. Sell It: Storytelling can make or break any innovation. If you can’t tell an engaging, compelling story of why this innovation makes sense, you failed.

You can see the entire talk in these four video installments:

I’d love to get a conversation going about Lean Innovation within companies. Feel free to post a comment below of tweet me at @ielshareef. Looking forward to it!

UPDATE (June 20, 2012): You can now watch my Lean Innovation talk here.

Steve Jobs by Walter Isaacson

Jobs is a Four Letter Word

Many people might mistake this book for a mere biography of the man that made Apple a household name and its products coveted by millions around the world. It’s not.

This book is actually three books in one. It’s a business book on how to (and not to) run a company using Apple, NeXT and Pixar as case studies. It’s also a history book on the ascent and the drama behind the consumer electronics evolution. And as its title suggests, it’s the fascinating story of one of the most gifted people of our time.

As a business book, Isaacson writes about three distinct business practices. The first is how to really create a company from scratch. The passion exuded by Jobs and Wozniak is detailed with infectious enthusiasm in the first half of the book.

The second practice (and one often not talked about in business books) is how to drive a company to the ground. The book is rife with examples of internal politics, lack of leadership and the absence of focus that truly illustrate how companies fail.

The last practice is how to build and operate a creative company that endures. For me, this is the most fascinating narrative of all. But to fully appreciate it, one must truly understand the first two, which almost always precede this one.

The book offers a great case study of three companies: Apple, NeXT and Pixar. One fascinating vignette in the book draws a contrast between Apple and Sony and why Apple was successful in conquering the consumer-end of the music business while Sony, who was in a favorable position to do exactly that, failed to do so. This story draws attention to the importance of inter-departmental cohesion that Apple possessed and Sony didn’t, to the success of innovation in a company.

Business leaders reading this book will learn a lot about the power of “focus” in business. Steve Jobs’s most doled out advice was “focus.” Throughout the book, we learn how Jobs followed his own advice to a deadly fault.

As a business book, it is amongst the best.

It’s also an even better history book. It details the ascent of personal computing from the perspective of the very people that were (and still are) at its helm. The book doesn’t only cover Apple’s evolution, but Full Article