Monetizing an API has little to do with technology

As a human centered business designer I was privileged to facilitate a business modelling workshop for the 4APIs project in May. The project team spent the morning creating hypothesis with target to scale and monetize for a case study called Ypsilon. The case study is Ypsilon Community Centre which is a multi-purpose building located in Yli-Maaria, Turku. It has facilities for education, a library, youth services, school health care and child welfare clinics. 

Our main questions to answer were typical to any business model design. 

  1. Who do we create value for
  2. What is the value proposition (the problem we offer to solve)
  3. Revenue model
  4. How do we deliver and capture value 
Who? What? Value? How?

In most small groups discussion on target segments was around building owners (B2B) and house owners (B2C). Also building manufacturers and insurance companies were seen as a potential customers.

As a human centric business designer I always emphasise the importance of being aware of human behaviour and driving motivations around the problem that concept is meant to solve. Is your API solving a business critical problem or not? In my own small group we clarified three value proposition for house owners. 

  1. Economical value: prevent the risk of serious water damage or moist. 
  2. Emotional value: carefree living for house owners. 
  3. Functional level: straight forward service model with third parties.   

Even a great value proposition isn’t enough if the pricing or purchasing model is in conflict with the customer’s way of purchasing these kind of services. In B2B  the typical failure would be not to adapt on customers’ tendering models and siloed responsibilities. The model should be somehow familiar to a customer, as every business is always a combination of 55 business model patterns. 

To come up with a potential concept is rather easy. Success is more about hard sales work and right timing than latest technology. At the heart of cashing is to find the right super moments when a customer is most likely to put the effort needed for purchase. Or even better, if we find a way to serve the customer without him/her having to put any effort at all to purchase.

To me as a house owner the winning offer would be a combination of all three value propositions. The emotional side definitely on the highest priority. If it would require more effort than opening a door once, I’d remain in the potential customer category. This leads to the issue of trust. Who do I trust enough to grant access to my water consumption data and let them know when I’m on vacation?