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API Investment News

These are the news items I've curated in my monitoring of the API space that have some relevance to the API definition conversation and I wanted to include in my research. I'm using all of these links to better understand how the space is testing their APIs, going beyond just monitoring and understand the details of each request and response.

100K View Of Bot Space From The API Evangelist Perspective

I had a friend ask me for my thoughts on bots. It is a space I tend to rant about frequently, but isn’t an area I’m moving forward any meaningful research in, but it does seem to keep coming up and refuses to ever go way. I think bots are a great example of yet another thing that us technologists get all worked up about and think is the future, but in reality, while there will only be a handful of viable use cases, and bots will cause more harm, than they ever will do any good, or fully enjoy a satisfactory mainstream adoption.

First, bots aren’t new. Second, bots are just automation. Sure, there will be some useful automation implementations, but more often than not, bots will wreak havoc and cause unnecessary noise. Conveniently though, no matter what happens, there will be money to be made deploying and defending against each wave of bot investment. Making bots is pretty representative of how technology is approached in today’s online environment. Lot’s of tech. Lot’s of investment. Regular waves. Not a lot of good sense.

Top Bot Platforms Ok, where can you deploy and find bots today? These are the dominant platforms where I am seeing bots emerge:

  • Twitter - Building bots on the public social media platform using their API.
  • Facebook - Building Facebook messenger bots to unleash on the Facebook Graph.
  • Slack - Building more business and productivity focused bots on Slack.

There are other platforms like Telegram, and folks developing interesting Github bots, but these three platforms dominate the conversation when it comes to bots in 2017. Each platform brings it’s own tone when it comes to what bots are capable of doing, and who is developing the bots. Another important thing to note across these platforms is that Slack is really the only one working to own the bot conversation on their platform, while on Facebook and Twitter allow the developer community to own the conversation about exactly what are bots.

Conversational Interfaces When it comes to bots, and automation, I’m always left thinking more broadly about other conversational interfaces and Siri, or more specifically Amazon Alexa. The Amazon Alexa platform operates on a similar level to Slack when it comes to providing developers with a framework, and tooling to define and deliver conversational interfaces. Voice just happens to be the interface for Amazon, where the chat and messaging window is the interface for Slack, as well as Twitter and Facebook. Alexa is a bot, consuming API resources alongside the other popular definitions of what is a bot on messaging and social channels–expanding the surface area for how bots are deployed and engaged with in 2017.

Bots And APIs To me, bots are just another client application for APIs. In early days APIs were about syndicating content on the web, then they were used to deliver resources to mobile applications, and now they are delivering content, data, and increasingly algorithms to devices, conversational interfaces, signage, automobiles, home appliances, and on and on. When any user asks a bot a question, the bot is the making one or many API calls to get the sports statistic, news and weather report, or maybe the purchase of a product. There will be many useful scenarios in which APIs will be able to deliver critical resources to conversational interfaces, but like many other client implementations, there will be many, many bad examples along the way.

Algorithmic Shift In 2017, the API space is shifting gears from primarily data and content based APIs, to a more algorithmic focus. Artificial intelligence, machine learning, deep learning, cognitive, and other algorithmically fueled interfaces are emerging, wrapped in APIs, intent on delivering “smart” resources to the web, mobile, and conversational interfaces. We will continue to see an overwhelming amount of discussion at the intersection of bots, API, and AI in coming years, with very little actual results delivered–regardless, there will be lots of money to be made by a few, along the way. Algorithms will play a central role in ensuring the “intelligence” behind bots stay a black box, and sufficiently pass as at least magic, if not entirely passed off as comparable to human intelligence.

Where Will The Bot Money Be? When it comes to making money with bots, there will only be a couple value creation centers. First, the platforms where bots operate will do well (most of them)–I am not sure they all will generate revenue directly from bots, but they will ensure bots are driving value that is in alignment platform revenue goals. Next, defensive bot solutions will generate sufficient amounts of revenue identifying and protecting businesses, institutions, and government agencies from the bot threat. Beyond that, venture capital folks will also do well investing in both the bot disruption, and bot defensive layers of the conversation–although VCs who aren’t directly involved with bot investment, will continue to be duped by fake users, customers, and other bot generated valuations. Leaving bot blemishes on their portfolios.

Who Will Lose With Bots? Ultimately it is the rest of us who will come out with on the losing side of these “conversations”. Our already very noisy worlds will get even noisier, with more bot chatter in the channels we currently depend on daily. The number of humans we engage with on a daily basis will decrease, and the number of frustrating “conversation” we find ourselves stuck in will increase. Everything fake will continue inflate, and find new ways to morph, duping many of us in new and exciting ways. Markets will be noisy, emotional, and always artificially inflated. Elections will continue be just an an outright bot assault on voters, leaving us exhausted, numb, and pretty moldable by those who have the biggest bot arsenals.

Some Final Thoughts On Bots I am continuing to see interesting bots emerge on Twitter, Facebook, Slack, and other channels I depend on like Github. I have no doubts that bots and conversational solutions will continue to grow, evolve, and result in a viable ecosystem of users, service providers, and investors. However, I predict it will be very difficult for bots to ever reach an acceptable mainstream status. As we’ve seen in every important conversation we are having online today, some of most badly behaved amongst us always seem to dominate any online conversation. Why is this? Bots. We will see this play out in almost every business sector.


The Competitive Advantage Of API Agility Over Any Secret Sauce

I was talking to a VC about one of my favorite API upstarts the other day, and one of the closing questions I received was if the API upstart had a secret sauce that made their position defensible. To which I responded, no…but they are API first, and API definition-driven in everything they do, so they will ultimately move faster than any competitor can.

Agility is one of the classic things you hear people tell companies regarding why they should be doing APIs. The benefit is definitely overused and overstated in situations it shouldn’t be, but when APIs are fully embraced, and done properly, the agility is real. I’ve seen companies be able to shift, pivot, and add new features in a fraction of the time of their competitors, allowing them to in new ways that nobody had intended just months before–APIs allow for the type of shape shifting you need to remain competitive in today’s environment.

APIs do not automagically mean a company, institution, organization, or agency will be agile by default. Organizationally, and culturally the entity behind an API needs to be in sync with the API frontline, or agility will never be fully realized. However, when you can dial all this in I’ve seen something that is more potent than any secret sauce or proprietary approach, allowing you to move more confidently and flexibly. I don’t think API agility is a competitive advantage that all companies or investors fully grasp, but once they see in action, I think they’ll realize APIs are more effective than locking something up and keeping it secret.


My Challenges When Taking Money From Startups As The API Evangelist

It is a hustle to do API Evangelist. I've been lucky to have the support of 3Scale since 2013, without them API Evangelist would not have survived. I'm also thankful for the community stepping up last year to keep the site up and running, keeping it community focused thing, and not just yet another vendor mouthpiece. I make my money providing four ad slots on the site, by selling guides and white papers, and by consulting and creating content for others. It is a hustle that I enjoy much more than having a regular job, even though it is often more precarious, and unpredictable regarding what the future might hold.

Taking money from companies always creates a paradox for me. People read my stories because they tend to be vendor neutral and focus on ideas, and usable API-centric concepts. While I do write about specific companies, products, services, and tooling, I primarily try to talk about the solutions they provide, the ideas and stories behind them, steering clear of just being a cheerleader for specific vendor solutions. It's hard, and something I'm not always successful at, but I have primarily defined my brand by sticking to this theory.

This approach is at odds with what most people want to give me money for. 3Scale has long supported me and invested in me being me, doing what I do--which is rare. Most companies just want me to write about them, even if they understand the API Evangelist brand. They are giving me money, and in exchange, I should write about them, and their products and services. They often have no regard to the fact that this will hurt my brand, and run my readers off, falling short of actually achieving what they are wanting to achieve. I get the desire to advertise and market your warez, but the ability for companies to be their own worst enemy in this process is always fascinating to me.

I get regular waves of folks who want to give me money. I'm talking with and fending off a couple at the moment. So I wanted to think through this paradox (again), and talk about it out loud. It just doesn't make sense for me to take money from a company to write blog posts, white papers, and guides about their products and services. However, I feel like I can take money from companies to write blog posts, white papers, and guides about an industry or topic related to the problems they provide solutions for, or possesses a significant audience that might be interested in their products and services. I consider this underwriting and sponsorship of my API Evangelist research, where they receive branding, references, and other exposure opportunities along the way.

Ideally, all branding, reference, and exposure elements are measurable through the tracking of impressions and links. What was the reach? What is the scope of exposure? It is difficult to sustain any relationship without measuring success and both parties are unable to articulate and justify the financial underwriting and support. In some cases, I get paid a finder's fee for referrals, but this can be very difficult to track on and validate--something that requires a company to be pretty ethical, and truly invested in partnerships with smaller brands like me. I prefer to rely on this, as opposed to any sort of affiliate or reseller style tracking systems. I like companies that ask their customers, "how did you learn about us?", as they tend to actually care about their employees, partners, other stakeholders at a higher level.

Sometimes I take an advisor, or even technology investor role in startups, taking on a larger stake in outcomes, but these are something that is very rare. I have a manila file folder filled with stock options, and stakes I have in companies that never reached an exit, or when they did I was written out of things--when I do get a check from startup founders, I'm always floored. This does happen, but is truly a rare occurrence. I wish there were more decoupled, plug and play opportunities to invest in startups as an advisor, researcher, analyst, and storyteller, but alas the system isn't really set up for this type of thinking--people prefer the big money plays, over smaller, more meaningful contributions--it's about the money man.

Anyways, every time I visit this conversation in my head I come back to the same place. I'm happy to take money from companies to generate short form and long form content about an industry or topic. If there are finder fees for referrals, great! I leave it up to you to track on and come back to me with the details, and any specific event--while I will stay focused on what I do best, the thing you are investing in me to do. I'm mildly interested in opportunities to become more invested in your companies overall success, honestly, I just don't trust that the system will deliver in this area, and is more often just looking to extract value from me. I have seen too much in my 30-year career. However, I always welcome folks who want to prove me wrong! ;-)

In the end, my mission stays the same. I'm interested in studying where the API space has been, where it is at, and where it might be going. Then, I am interested in telling stories from what I learn in this process. If you want to invest in any of this, let me know. I could use your help.


Open Discussions About Funding API Startups

It made me happy to read the Rise of Non “VC compatible” SaaS Companies, and see that there are more sensible discussions going on around how to develop SaaS business, something that I hope spreads into the specifically API as a product startups and API service providers. I know that many of my readers think I'm anti-VC--I am not. Or may I'm anti-startup--I am not. I'm anti-VC and anti-startup ideology becoming the dominant religion, pushing out a lot of really good people and ideas who can't play that game.

When it comes to Silicon Valley, if you push back, you get excluded from the club, and there are waves of people who step up to tell you "not all startups are bad" or "not all VCs are bad"--I wish I could help you understand how this response makes you look. Of course, they aren't all bad, but there are bad ones, and there is a lot of rhetoric that this is the ONLY way you can build technology when it isn't. There are plenty of ways you can develop technology, and build a business without the VC approach, or the cult of the startup. 

There are more instructions you should follow in the rise of the non-VC compatible SaaS companies story, but the author outlines four types of SaaS companies, which I think applies nicely to APIi companies, as many of them will be SaaS  providers:

  1. Funded SaaS: companies which finance their business with VCs a.k.a equity against money. From early stage startups with no revenue to companies going public with hundreds of millions of dollars of ARR, the range is extremely wide.
  2. Bootstrapped “scaling” SaaS companiesSaaS companies which manage to pass the $10M ARR threshold without VC money. Ex: Mailchimp or Atlassian (which raise VC money but at a very late stage) have reached the hundreds of millions of dollars of ARR without VC money. These “unicorns among unicorns” are very rare.
  3. Bootstrapped SaaS companies: bootstrapped companies which manage to reach the $300k — $10M ARR range without VC money.
  4. Bootstrapped Micro SaaS: “1 to 3” people companies which operate in the $1k — $300k ARR range, without VC money.

There are some ideas that should go VC, but there are even more that should not. I want to see more talk like this about the funding realities of an API startups. A sensible discussion about what the goals are, how fast a company should grow, and whether the company is building a business to develop software solutions that we sell to customers, or a business to sell some large enterprise--hell, maybe even go IPO. These are all viable options for your business, I'm just looking for more discussion about the priorities. One more thing, you should be having this discussion out in the open with the customers you are supposedly selling your products and services to--this is the important part, not just the having of the discussion.

I'm not trying to get in the way of you getting super filthy rich. I'm just trying to strike a balance between you building a company, and the stability and availability of your APIs, and API tools and services, in an industry I depend on to make my living. You see, APIs have gotten a bad wrap for not being stable, and going away at any time. This isn't an API thing, this is a VC funded startup thing. When you are telling your companies that you are building a business, with products and services to purchase, and then everyone bakes your solutions into their solutions, and you go away--that sucks. If you tell people the truth from the beginning and are honest and communicative about what your plans are, people can build and plan accordingly--the problem isn't APIs going away, it is startup founders not caring.

I am just trying to strike a balance between your business aspirations, and those of the people I help convince to use your APIs. Many of them aren't trying to get rich. They are just trying to build a business, and get their work done with your service, tool, and API. Let's start having more honest and open conversation about the variety of business models available to use when building API startups, and remember that not everything is a VC-worthy idea, sometimes you are just a viable feature for regular business owners like me.


Expressing My Concern About Startup Dependability When I Talk To VCs

I talk to venture capital (VC) folks on a regular basis, answering questions about specific API-centric companies, all the way to general trends regarding where technology is headed. This week I was talking with a firm about the viability of one of the API companies I work with regularly, and the topic of startup dependability came up, as we were talking about the challenges this particular startup is facing.

While I am using this particular startup in my business operations I expressed concern about the viability and stability of the startup in the long run. This concern has less to do with the startup, as I fully trust the team, and the technology they develop, it is more about the nature of how investment works, as well as the looming threats for the 1000lb pound gorillas in the space. I just do not trust that ANY startup will be around in coming months, and I craft my API integrations accordingly--always with a plan b, and hopefully a plan c waiting in the shadows.

This isn't just me. I've had similar conversations with companies of all shapes and sizes, university technology groups, as well as government agencies. After each wave of startups failing or achieving their exits, us end-users who are often in charge of purchasing decisions are suffering from whiplash, and our necks hurt. Every time there is a new tool on the table, we are asking ourselves whether or not it is worth it this time. Should we be investing in yet another software as a service that will likely go away in 12 to 24 months? The burden on us has been too high, and we are left feeling like the startups and their investors really do not give a shit about us--they have their own business model that they are moving forward with, where we are just a number.

There are no guarantees in business, but startups and VCs aren't doing enough to address the dependability of their portfolio companies. At some point, it will catch up with them, if it already isn't. As the API Evangelist, I am already toning down my excitement over new startups because I really do not want to be responsible for helping convince people to adopt a new tool, and then be held accountable when the startup goes away. Each week I have an inbox full of startups asking me to write about them, and most of them are unaware of how much my neck hurts, they are narrowly focused on their vision, with little concern for the rest of us, as long as they get their payout.


Reconciling How Reliable APIs Are While Also Embracing Tone Set By VC Investment

I have done a lot of reading in the last week, catching up on my monitoring of the API space. I have read a couple of posts about the reliability of APIs, and the overall viability of building applications, and businesses based upon them. A couple of the posts were focusing on the shuttering of ThinkUp, but a couple others were just part of the regular flow of these stories that question whether we can depend on APIs or not--nothing new, as this is a regular staple of bloggers and the wider tech blogosphere.

My official stance on this line of thinking is that I would not want to be building a business, and application that depends on leading API platforms like Twitter, Facebook, Instagram, and others, but I will happily build a business, applications, and system integration on APIs. You see, this isn't an API issue, it is a business and vendor viability issue. As with other sectors, there are badly behaved business, and there are well-behaved businesses--I try to choose to do business with the well-behaved one's (can't always achieve this, but I try).

I find the ongoing desire of the startup culture to point out how unreliable APIs are, while simultaneously supporting the overall business tone set by venture capital investment, often delusionally blind levels of support, is just not reconcilable. I'm not saying all VC investment is bad, so don't even take this down that road. I am saying that the quest for VC investment, and the shift in priorities once VC investment is acquired, then further shift with each additional round, and the final exit is setting a tone that is completely at odds with API reliability. 

The problem really begins when APIs become the front-end for this blame. If I depend on vendors for my brick and mortar store, and the delivery trucks don't reliably bring my products, I don't talk about how you can't depend on trucks--I find new vendors. Of course, I can't find new vendors if they can't be replaced like Twitter and Facebook, but this is a whole other conversation, although it is also one that is a symptom of the tone being set by the VC currents (this is a business conversation). Blaming APIs instead of raising questions about the business ethics bar being set by venture capital shows the blinding power of greed, as the tech community refuses to blame VC $$, and shifts this to being about the viability of APIs, because I will get my VC $$ some day too bro!

I am not saying APIs are always good. I'm just saying they aren't bad. Hell, they aren't neutral. They are a simply a reflection of the business behind them, as well as being a reflection of the industry they operate in. Stop blaming them for businesses not giving a shit about developers, and the end-users. Maybe we could start changing the tone by admitting the #1 priority is always set by VC $$, and not by our API community, or even our end-users and customers, and all this shit is out of whack.


If you think there is a link I should have listed here feel free to tweet it at me, or submit as a Github issue. Even though I do this full time, I'm still a one person show, and I miss quite a bit, and depend on my network to help me know what is going on.