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?

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?

Why Ask Friends Who They Voted for in 2008 When Votizen Can Tell You That and More

I know voting records are public.  Notwithstanding, I was a little annoyed to learn that some of my seemingly apolitical Facebook and Twitter friends were Republican or voted Republican in 2008 when crazy Palin was running.  How did I know that?  I went to Votizen.com.  I’ve been a member for a while and I do like the site, but I wasn’t ready to see some people, most of whom I don’t really know that well, outed as Republicans.  Being a Republican today isn’t like being a Republican back in 1986, if you know what I mean.  In today’s political climate, I would have preferred not to know that about those people.

After getting annoyed for a day, I started to wonder: do these people even know that their political affiliation and voting records are now readily available for viewing by their Facebook and Twitter (and now LinkedIn) friends?  Would they be OK with that?  So I asked one of them.  He flipped out.  His response was, “dude, this is personal. How can they do this? I never signed up for an account there.”  He felt, well, outed.

Here’s the thing: we like to think that our political affiliation and voting records are personal and most of us avoid the topic all together at work, family gatherings, parties, …etc.  But in reality, all of that stuff is public data.  The folks at Votizen collected it, catalogued it, digitized it, standardized it and turned it into a product.  I’m not really sure any of us can do anything about it.

Here’s a snapshot of what I saw on Votizen.  I blurred the names and photos of those individuals out of respect.  I did the same thing with my Democrat friends.

Voting records might be public, but let’s give the choice back to individuals to determine with whom to share that public knowledge.  If not out of respect, at least out of courtesy.

All I know is: thank God I didn’t connect my LinkedIn account with Votizen!

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.

Highlights from Fast Company’s Innovation Uncensored Event in San Francisco

Great conferences don’t need to span two or three days. In fact, they can be done in one day as Fast Company fabulously demonstrated earlier this week.

The Innovation Uncensored Conference was an impressive feat. It featured great speakers like Scott Case of Startup America, Padmaress Warrior of Cisco and Seth Priebatsch of SCNGR, who discussed pressing topics like customer-centric development, social in the enterprise and game mechanics in business. The mix of speakers and topics was intense without being overwhelming. I was able to walk away with many great learnings.

Oh and the catering … amazing!

Here are some of the learnings I gleaned from the conference:

#1 Successful Businesses are Flexible and Persistent

Reid Hoffman of LinkedIn gave general good advice to startups. He singled out perseverance and focus as the two main objectives of any business. He emphasized the importance of listening to the “smartest people that will talk to you” and heed their advice. He also recommended getting an introduction to VCs you don’t know instead of sending them unsolicited emails (they hate it.)

Scott Case of Startup America echoed Hoffman’s sentiments with his “10 Steps Toward Success:”

  1. Ecosystem: Be part of the environment in which you partake. Give your time to fledgling startups that seek your help.
  2. Pick Your Team Carefully: Founding team members can make or break your business.
  3. Embrace the Pivot: Know how to pivot. Read Eric Reis’s book (my review.)
  4. FOCUS: You have to manage distractions, otherwise you’ll fail.
  5. Build Your Network: The smartest people in the world can’t get anything done without help. Build your support system and mingle with people that are smarter than you.
  6. FOCUS: You have to manage distractions, otherwise you’ll fail.
  7. Customer Development: Know your customers. Read Steven Blank’s book.
  8. Capital: Are you going to raise money? Self-fund? Where is your capital coming from?
  9. Get The Boring Stuff Right: Business, legal, accounting, …etc. Most founders waste their time figuring this out instead of focusing on their product.
  10. FOCUS: Do I really need to say it?
Pretty much everyone that spoke mentioned “focus.” They made a compelling case for the power of saying “NO” and how crucial that is for success. It’s only when you’re “focused” you can be flexible and have the energy to persist.

#2 Your Customers are Your No. 1 Asset

This was another common takeaway and one we take to heart at Edmunds.com.

David Cush of Virgin America stressed the paramount importance of managing customer expectations when rolling out a new system. Virgin America just recently implemented a new reservation system (still buggy as of this writing) and they have worked closely with the marketing department to manage customer expectations and reactions.

Padmaress Warrior of Cisco said the same thing. She implemented BYOD (Bring Your Own Device) policy at work after her customers (i.e. Cisco engineers) continued using their “unsupported devices” (i.e. Macs.) The new policy has been great not only for her consumers but for business as well.

Customer is the No.1 asset. Also, if your employees are happy and satisfied, that normally translates to customer satisfaction as well.

#3 Focus

I know I mentioned it above, but it was such a focal (no pun intended) point at the event. Focus is success.

Gary White of Water.org and Doug Ulman of Livestrong talked about passion, social responsibility and the role of focus in their success. If you come up with ten projects, prioritize them and then cut the last two and focus all your resources on the first eight. Personally, I’d go further and say cut eight and focus on the top two, but I guess it all depends on the amount of resources you have. Full Article

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries

117478738 Crucial Lessons for Fledgeling and Mature Companies

I started reading Eric Ries's blog, "Startup Lessons Learned," back in October 2008. I was quickly impressed by his technical acumen and the simplicity of his writing. I also enjoyed the breadth of topics covered and how engaging they were.

Needless to say, I was glad to hear that he was going to distill all his knowledge into a book, and now that I read the book, I'm glad to say that he didn't disappoint.

The book defines a startup as a 1) a human institution designed to 2) create a new product/service under conditions of 3) extreme uncertainty.

Notice how the definition doesn't address the size of the venture or its backers or its origins. As long as it is a team building a product with high uncertainty, it is a startup.

The book also covers the entire life cycle of a lean startup, Figure 1.

Lean-startup

Figure 1.
Build-Measure-Learn Feedback Loop that's at the core of the lean startup (image source)

Eric puts a huge emphasis on "validated learning" as opposed to "failure as a way of learning." He says, "a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly." He's all about accountability, which is sorely lacking in so many institutions these day, with the most egregious being Wall Street.

Eric goes on to explain the principles of the lean startup with andecodotes of successes and failures in business. One of the most fascinating and very telling for me was the SnapTax story. The fact that a giant company like Intuit could spawn an innovative startup (i.e. a team + a product + high uncertainty) was a nice validation for my unsuccessful push for an R&D department within the companies at which I worked in the past. SnapTax was a team of five individuals that was given freedom to experiement while held accountable throughout the process. The results were impresssive.

If nothing else, the reader, especially those running mature companies, should pay close attention to Eric's conclusion. He stresses the points of validating assumptions, rapid testing of ideas, and most importantly, "stop wasting people's time."

I think that's the most valuable lesson in the entire book. Mature companies that continue to waste their talents' time with banal and insipid tasks are bound to lose those talents and will only be left with lazy, oftentime overpaid individuals that are too comfortable, too politically secure that they can't produce anything new or original even if they tried.

Startups are a "human institution" first and foremost. If the right team isn't in place, you do not have a startup. Nurture those talents and don't waste their time. Only then will the trappings of success adorn your business and you.

Interview with Ismail Elshareef of Noisetap

I was interviewed by Kristen Nicole of 606Tech about the work we're doing on Noisetap.com. Here's the interview:

Noisetap is a product of Cottenblend, a creative agency specializing in web development, and provides a  rare blend of user-generated resources for the music community.  There is a ranking system  built into their service that pushes the best content to the top.  Their posts are segmented by music genre and context, and offer an aggregate of relevant information for their users.  People are connected to each other through this relevant information, so based on your interests, you can find others that share your tastes and will offer information that is compelling to you.  Their relationship with Ticketmaster and iLike gives them an opportunity to research and develop intriguing products and provide additional value to their users. They are currently testing in beta, and hope to be launching their official service sometime later this year. 

I had a chance to chat with Ismail Elshareef of Noisetap.

How did the idea for Noisetap come about?

We are very interested in new technology here at Cottonblend, and Noisetap is the first of many Web 2.0 sites that we will be building in the coming year. We wanted to give the music community a cool, unique way to share news, rumors, opinions, etc. where the most compelling content rises to the top (based on our ranking algorithm). We also like to look at these new sites as a sandbox or testing ground—a great place to work all the bugs out before we offer features like these to our clients. Not to mention it keeps our designers and developers happy as they get to work on cutting-edge ideas.

Are most people considering you to be a specialized Digg for music?

That may be the first impression of the site, but aside from post submission and the ability to vote/comment on it, we introduced a competitive edge to the mix by displaying user ranking and giving users the ability to display a badge that shows their ranking on their blogs. We also feature articles/reviews by power users (i.e. editors), which is something that Digg doesn’t do. So while we do implement some Digg-like features, we took the idea one step further.


What are the key features of Noisetap?

Out of the many features on the site, the following do stand out:
1. The ability for users to vote and change their votes
2. RSS feeds for searches
3. User badges
4. Lightboxes
5. Granular user searches
6. posts broken up by music genre and context type.

Where do the social components of Noisetap come into play?

When users sign up, we ask for their ZIP code if they’re in the US, or their city otherwise. This information will come in handy as we roll out more social components that will mainly focus on connecting users who have similar interests as well as connecting them with resources on partner sites.

How'd you come up with the animal icons for each music genre?

We wanted something a little more exciting, something different, something that wasn’t just a boring guitar icon for rock. Thus, the animal icons were born. This was probably one of the hardest decisions we had to make in building the site—which animal goes with which category. After many conversations, we finally ended up with what you see today. Personally, I still like the Armadillo for Country, but I was outvoted.


How is beta testing going so far?  What type of feedback are you receiving?

It’s going great. We’re currently focusing on performance issues and logic bugs. Most of the feedback we’ve gotten so far has been positive with very little bugs to report. We want to pound on the site for a good period of time before we go into GAMMA.

Any plans to add additional social components or music genres?

Definitely!

Any hopes of branching out other specialized networks?

Of course. We have plenty of ideas cooking at the Cottonblend labs

What are the next steps for Noisetap?

The very next step for Noisetap is fine-tuning performance and fixing critical bugs, if any. Then, we’re going to implement new features one by one, allowing ample time in between for testing and fine-tuning. Noisetap is a living entity that will always change, evolve and improve.

When do you plan on your official launch?

No official date has been set, but if I had to guess, I would say mid-summer.