Sunday, October 03, 2010

Developers Out There - API 101

 Developers out there:

  • are building their own companies to make money
  • are writing open source software, because they enjoy the respect they get from the community and can make money later by consulting or writing books about their software
  • are making iphone & android apps because people pay for them
  • are making facebook apps, because they get this huge user base of 500 million users. If successful their app can bring huge amount of money from adds, or if they are making games then from virtual goods.
It was and it is about the money honey.

Zynga for all practical purposes is a developer for facebook. If Zynga makes a billion dollars out of virtual goods using facebook, they do bring 300 millions to facebook. Facebook gets a huge screen real estate they can use for advertisements which is exclusively created by Zynga.  May be facebook makes more money from Zynga than what Zynga makes from facebook.  This is called partnership.

The most stupid thing companies do after opening up their API's is to wait for developers to build applications and give no meaningful monetization model to developers. That leaves no other choice except advertisements for developers. Companies like twitter are even worse, who copy the innovation of their API developers and kill them. 

Developers are out their to make money.

1) First figure out how you will make money.
2) Second figure out how you will make money if developers use your API. 
3) Third share your profits with the developers based on how much business developer brings to you.

Let developers make the choice if they want $10 per booking vs $0.001 per add view and how do they optimize their app for their choice.  Developers are not super excited by Facebook, Iphone, Android or Google. They are excited by the opportunity to make it big. 500 million * $ 0. 001 is a big number. But so is $10 * 50K or $100 * 5K or $1K * 500 or $10K * 50.

No comments:

Post a Comment