Information wants to be paid

Dubloon
Photo by Swamibu

I want to pay for API access. That probably sounds nuts coming from a starving entreprenuer, but I don’t want to be treated as a charity case by the services I rely on.

Part of my job at Apple was third-party developer support, and even before the iPhone made it so high-profile, the company was brutally self-interested in its relationship with outside developers. With that in my background I was wary of the siren call of becoming a third-party developer when I entered the web world. In the short-term the distribution advantages are hard to resist, but the service provider always has a gun to your head. Look at the arc of both the Facebook and Twitter ecosystems. Is FbFund even still alive after all the restrictions on apps within Facebook? Tweetie’s acquisition was a big win for the team, but also made it clear that Twitter is happy to expand at the expense of other external developers. You can counter with Zynga, but I’d argue that their history shows you need to grow large enough to change the power relationship, and even then you’re at a high-risk of being cut-off.

Fundamentally the problem is that the relationship between developers and API providers is all take and no give. The big guys have no incentive to keep their APIs open and stable. They love the free R&D, but as soon as something looks like it might make money, the temptation to bring it in-house is irresistable.

What I’m looking for in a relationship is reciprocity. The oldest and most successful API on the web is search-engine crawling. This works because providers have a strong incentive to allow Google to index their sites – in return for handing over their content, Google sends them visitors. In the real world, it’s not normal for this sort of business relationship to work through this sort of bartering. In most cases if company A makes money and depends on company B, some of A’s revenue ends up in B’s pocket.

I want to know where I stand relative to the business model of any company I depend on. If API access and the third-party ecosystem makes them money, then I feel a lot more comfortable that I’ll retain access over the long term. If it’s a drain on their resources, then I’ll assume they’re doing it for free R&D and may yank the plug at any point. It doesn’t stop me experimenting, but I’d never build a business that relied on them.

So, I’m basically stuck with Salesforce as my only option, until I can persuade Twitter or Facebook to take my cash!

“On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”

Thanks to Jud and Rob for contributing a lot to my thoughts around this

One response

  1. If you want to read a book about how companies manage their “ecosystem” through their “platforms” and “APIs” (for good or bad) check out The Keystone Advantage by Iansiti and Levien.
    It’s actually a really great book.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: