Recently I was invited to speak at the AutoDevBot API Conference here in San Francisco regarding BD, API Distribution, and how to get customers for your API related company.
There are way more than 10 things that you have to do in order to grow your customer count and be successful in the API Economy. That said since every journey starts with a first step, here are some of the things that I believe apply to anybody wanting to start the next SendGrid, Twilio, or Stripe.
If you don't want to read it, scroll down for the slides and full video of the presentation. ;-)
SMTP, SMS, Payments, Bitcoin, DNS, HTTP, and the list goes on. All the top API companies are, for the most part, improving existing protocols or processes that have been in place for many years, not trying to create things from scratch. That way you start day one with the massive distribution.
Email is huge and we are a big part of it. Today we send 2% of all non-spam emails in the world. That's about 13 billion messages a month, give or take. Most people use email, most people use SMS, we use payment networks multiple times every day and transactions will always need some sort of authentication.
The full spirit of the way I mean by well-adopted protocols and your ability to improve upon them is also described here, on the excellent comparison that Brian Armstrong did with Bitcoin and SMTP.
I've talked here before about this excellent Tim O'Reilly Stanford talk. Major APIs are not supposed to just send data from point A to point B or just expose service requests and posts.
The future depends on companies and technologies where 1+1=3. Several of our customers were acquired (Instagram, Posterous, Slideshare, Summify, Pardot - to name a few) and if most of them had to build all their systems in-house, most likely it would have taken much longer for them to grow exponentially.
Help people do their mission better and faster by focusing on the things that matter and your Developer centric API will get adoption.
"Everywhere". That's probably one of the words I heard the most during my first year at SendGrid (I've been there for almost 3). That is our goal. Being the first partner of your category on multiple platforms has a lot of value. All of our very successful channel partnerships took time to become real moneymakers and being the first email tool there proved to be a very important piece of that.
Today we have full executive support to always do a deal with the new kids on the block that have growth potential. That's what happened with Heroku and SendGrid. We took an early bet (along with 8 other companies) on Microsoft Azure and it was a fantastic decision. Arrive early, stay late and help your partners.
At end of the day, especially in BD, "people are buying you they are not buying your product".
I know a lot of BD guys that have a miserable job. Mainly because they work solo and have to Excel prove every deal that they want to execute. But that's normal. The problem is when you have to beg for developer resources, marketing attention, and support assistance to end up being perceived as "the partnerships dude".
To execute good API partnerships you will need marketing, engineering, product, support, and in some cases account management. Make sure that there is management buy-in so that when you have to work with people they can understand the value of the work they are doing.
At SendGrid we are fortunate enough to have a dedicated team just for partnerships in almost all capacities. This way we can sell, operate and support 35.000 customers (just counting partner customers here) with a team of 4.
Today we can co-sell to Fortune 500 companies via a partner channel and partner with a new platform that hasn't even raised their seed round at the same time.
Being a SaaS company is great. If you have product-market fit and some venture capital, there is a good chance that you'll build a business that is predictable and runs with the most common Financial Performance Metrics for SaaS companies.
But one thing that makes a huge difference in your ability to become a services company at the same time that you scale. The ratio should be something between 70-30 or 80-20. So about 1/4 of your company should be working on non-scalable solutions, such as account management, support, and outbound sales.
Competition is very aggressive. Anything cloud, API or IT tends to get commoditized in about 5 years. We can't forget that there are humans on both sides of the table and your major accounts will count for most of your revenue. Give them a better SLA, prices, support, and most importantly preferential treatment on everything. But don't forget to kick ass on the core product, since self-service customers are fundamental for API companies.
I am a big fan of smart laziness and so are most developers. Remember, you want your API to be the default answer for any problems it can solve. When we launch a deal we work on sample apps, documentation on our website, the partner's website, and a solid GitHub repo will make a difference.
If somebody searches for "how to send an email on node.js" we should have a sample app for that, with a technical tutorial on the top 5 hosting companies' documentation pages that are well known for Node apps.
Think about the questions that your customers will ask when building their apps and go become the default answers for that everywhere.
Every partnership (for the most part) will be slightly different. It's important for you as a company to define the expected values that you want to get out of your partner deals. For SendGrid is usually a combination of revenue, awareness, customer acquisition at a lower cost, defensibility, and corporate development potential.
It takes time. Sales cycles can be long and certainly there is that immense satisfaction when code is in production, the legal agreement is executed and a blog post is published or a press release syndicated. Regardless, the most successful distribution deals will require a steady level of maintenance. Pretty much the difference between farming and hunting. Both are important if you want to be able to feed the company with new customers and revenue channels.
That's probably the hardest part of the job, but like Elad said some of the best deals are the ones that never happen. It's very important to be able to separate opportunities that are just noise versus working on deals that add value. My manager mentioned to me once (quoting a VC that I don't remember) that as an entrepreneur we are always looking for the "yes" and that VCs are always looking for a ways to say no, which perfectly makes sense to me.
That's why I am no longer default to yes in my life.
To be a great BD professional you have to be bullet proof when the topic of conversation is rejection, specially when trying to close new deals in verticals that you have no experience. Our best deals where the ones that took longer to close, but happened because we were patient enough that things worked out in the end for both sides. A lot of factor can influence the result of a deal.
For the most part it is more important to learn the reasons behind the "no" so you can turn them into a solid not yet, that eventually will be a yes.
As we get ready for the first close of our new fund, I'll start being a bit more public about the incredible team we have assembled for this mission.
Michael is CEO of Maple, a family tech startup looking to help families free up time and spend more quality time together.
Change is certain. You have everything you need to make it to the next step towards progress in life. Develop endurance and fortitude.
