“Your worth is not what you have, but who you are.”
― Matshona Dhliwayo
Twitter has done what they have done so many times, even before Elon Musk took over, and changed something on the fly. And as they have done so many times since Elon Musk took over, they have changed their minds again before even implementing the change they announced.
It doesn’t change my position on this, but it is symptomatic of the problem.
This time, as has been widely reported, they have announced that they will be removing the free tier of API use in their developer platform. They gave everyone a week’s notice but did not say what is going to replace the free tier or explain the criteria for being a “useful” app that delivers valid content.
So, this will make life interesting for everybody.
The last change was locking out a bunch of apps that technically repeated Twitter’s core functions – timeline, search, post – and I can see some logic to that. I cannot see the logic in then deciding to monetize the APIs. It’s backward thinking.
But I think it is much worse than just backward, and instead cuts to the heart of something being discussed around the API economy.
What exactly does API monetization mean? And how should it work?
I’ll start with a simple axiom.
You should not be monetizing your APIs until you know how to monetize your product.
The problem for Twitter is that it is an ad-supported social media platform that has accidentally become the world’s “go-to” content delivery protocol for news outlets and politicians. Thus far the ONLY way we have found to monetize social media/content eyeballs is advertising.
There are subscription options; see also Twitter’s $8 blue tick and the associated debacle. But most people are not prepared to pay to doom scroll or tell the world they had pork chops for dinner.
The Twitter API has always been something of an ugly stepchild nobody wants to acknowledge. Tech writer Simon Bisson summed this up with some tweets about the importance of the Twitter API in the developer training and teaching ecosystem. It is a solid, well-performing REST API that uses OAuth and is well documented. It is VERY easy for a new developer to get set up and tested.
This will have a detrimental effect on API development in general. But it speaks to a wider problem.
Should you be monetizing your API?
There are several ways to monetize APIs – John Musser’s talk on the subject is required viewing – but many of them leave open the question of whether you actually should.
A lot of organizations are simply not in the API business. They use APIs because the API is how their business works, and they monetize their business operations.
Is Twitter an API company or a delivery company? The API is a vector for delivering content. If they had a sound monetization model for the content, they should be monetizing that and encouraging more people to make quality content like our @serinusmonitor Twitter feed.
What is the downside of monetizing your API?
We recently had an incident involving one of the GGV Capital API First Index. This is a company that has raised a lot of money and touted themself as API first.
Their website had a sign-up portal using a simple API-key – something we’d suggest not to do these days – and a clear way to run test calls. So far so good.
We set up some test calls using the test credentials and got it running. Their performance wasn’t bad either.
Then, out of the blue, months after we set it up and added them to the index, we had a request from their sales team to ask about the bill for $2,500 we had run up over the last seven months.
It turned out that while we were making a limited number of test calls to a test key every month, one of the calls ultimately connected to the prod server and had a cost attached if you went over a certain quota, which was outlined in their developer Terms and Conditions.
However, there was no way in the portal to track usage. And nothing in the product showed if you had hit the limit, how much you had gone over it, and how to get an invoice for what you had done.
This is not an ideal example, but it hits at the heart of the problem.
The service we had called (that we maintain you should not be able to call with test credentials) got a price from another service that cost them money. The problem was how they monetized their costs of that service overall, not that the service cost something to begin with.
They did not have a clear method to monetize their operations digitally, let alone monetize their API.
And Twitter is in the same boat.
4 API Monetization Tips
- Don’t monetize anything you can’t track.
- Don’t charge for test calls – limit them at the gateway, stub off the endpoints, do what you like, but make sure it’s easy (and free) for developers to get started with your API.
- Be sure the problem is the cost of the API calls – are the API calls themselves really what you should monetize, or is something else going to make money?
- If you do monetize – be VERY clear on the cost up front (that means not burying them in the Terms next to the one about secret data cabals) and have clear ways to show people what they are spending.