GAFAnomics: Using APIs to gain unfair competitive advantage in the network economy

U S I N G A P I S T O G A I N U N F A I R C O M P E T I T I V E A D V A N T A G E I N T H E N E T W O R K E C O N O M Y

S E A S O N 2

Previously in

SEASON 2

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From new kids on the block to heavyweight champions

Google CONTENT & ADVERTISING

Amazon COMMERCE & FULFILMENT

Facebook SOCIAL & DISTRIBUTION

Apple ENTERTAINMENT & SOFTWARE

Haven’t read our previous studies? Go to http://fr.slideshare.net/fabernovel

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GAFA created a new economy: GAFAnomics®

The secret to this new breed of companies

GAFAnomics® companies are organized as networks, leveraging connections and interactions as a source of knowledge and therefore performance.

“In the networked world, [the three most desirable things]

are connections, connections and

connections.” Breaking Smart

Marc Andreessen & Venkatesh Rao

GAFAnomics® companies build open networks

A network is a system connecting a multitude of people, objects, and information to one another. By taking leadership on a large scale, GAFAnomics® companies become infrastructures, on which other companies want to connect to create value.

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More than half of the unicorns born with GAFA’s infrastructures

Number of tech companies valued at more than $1B by year of birth (pre-IPO and post-IPO)

Apple Store Android Store Google play

Source: TechCrunch

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Uber has built its whole service on top of infrastructures set out by GAFA.

[Case] Uber scaling fast thanks to GAFA

Access to users -

Data and server management -

Driver navigation -

Payment -

App distribution on the AppStore, the Playstore and soon Facebook Messenger

Data storage and management on Amazon Web services in its early stage.

Google Maps used to geolocate cars and users as well as to help drivers navigate

Google Wallet and Apple Pay are used to complete transactions.

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Connect to the Networks

with APIs

Leverage 4 Economic Superpowers

to

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Magnet enterprise – Aggregating and managing very small units

Networked companies are able to detect, organize, and animate very small units of value.

Their competitive advantage is to deal efficiently with billions of small transactions.

Real-time enterprise – Instantly tuning value

Networked companies use real-time data feedback to instantly optimize market fit and improve products’ value

Their competitive advantage is instant fit-to-market.

4 superpowers to unlock with APIs

Infinite enterprise – Shooting for the 100% profit consumer

Networked companies use highly scalable software and services to achieve zero cost delivery once critical user mass is achieved.

Their competitive advantage is speed of scalability and profitability.

Intimate enterprise – Hospitality is the norm

Networked companies use customer knowledge to fine-tune and personalize the experiences they deliver to each customer. Large-scale customization is at the heart of their products.

Their competitive advantage is customer hospitality and comfort.

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Magnet enterprise Aggregating and managing very small units

Networked companies are able to detect, organize, and animate very small units of value. They leverage excess capacities and user value creation to capture and deliver micro deals.

Their competitive advantage is to deal efficiently with billions of small transactions.

MAGNET REAL-TIME INFINITE ADAPTIVE + + + 4 =

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Magnet enterprise How it works

Standard economy –

Companies take raw materials in input and produce finished products that are sold to consumers. Revenue unit = 100

Network economy –

Companies identify available value, as small as it is and capture it. They transform this value and redistribute it to consumers and producers while taking a cut. Revenue unit = 1

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Magnet enterprise [Case] Use others’ APIs

IFFFT offers a unique service allowing users to create recipes (trigger + action) between 242 services. 15 million of these triggers are realized every day. IFTTT has raised more than $38M to date. All the value captured and distributed by IFTTT comes from API connections.

Use other’s API to benefit from externally-created value.

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Magnet enterprise [Case] Give away your APIs

Photo Prints allows mobile application developers to include the ability for their app users to print photos to any of the 8,000+ Walgreens locations. With every photo order that is successfully placed and picked up at a local store, the developer can earn a revenue share commission. A strategy to increase mobile interaction as Walgreens’ revenues per customer for people who interacted with it physically and through mobile devices were six times those generated by people who just shopped at its stores.

Give away your APIs to benefit from externally created-value.

225 Third party applications

40% Of digital photo business through APIS

200% Growth of API adoption

15% Revenue share for apps

4M Photo prints via Printicular

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The real-time enterprise


Instantly tuning value

Networked companies use real-time data feedback to instantly optimize market fit and improve products’ value. They use optimum management and work in perpetual beta to answer user needs in real-time.

Their competitive advantage is instant fit-to-market.

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Real-time enterprise How it works


Companies produce and put new products on the market every other year. They don’t have information about their products’ usage for months.

Network economy –

Companies produce a first minimum viable version of their products and perpetually improve it through iterative development. They closely monitor the usage of their products to answer their user’s needs in real time.

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[Case] Implement APIs Real-time enterprise

Through its APIs, Google analytics lets businesses understand their customers’ journey across channels. Through a comprehensive set of dashboards, businesses can track their performance and adapt their strategy in real-time to improve their reach or increase their conversion rates. For example, using Google Analytics improved National Geographic’s click-throughs by 21% for content promotions.

Use other’s API to understand and adapt to the market in real-time.

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[Case] Give away your APIs In its early days, twitter’s user interface was not good enough for regular users. In 2008, Twitter released its search API, which allowed third parties to read and write Twitter messages with minimal coding in nearly any programming language. An independent developer built TweetDeck, a new app based on Twitter’s API, with a better user interface that led to an explosion in Twitter usage. Twitter acquired TweetDeck in 2011 for £25M, thus making the twitter offering evolve with market demand.

Give away your APIs to let your products instantly adapt to the market.

Real-time enterprise

23% Of new status updates in 2010 (after Twitter: 45,7%)

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The infinite enterprise Shooting for the 100% profit consumer

Networked companies use highly scalable software and services to achieve zero cost delivery once critical user mass is achieved. Thanks to network effects and zero marginal costs, they can grow indefinitely in revenue with minimal impact on costs.

Their competitive advantage is speed of scalability and profitability.


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Infinite enterprise How it works


Companies have to produce an additional output to serve an additional customer. Their growth is constrained by their production capacity and by the marginal cost of production.

Network economy –

Companies distribute non-competitive goods and can serve additional customers at virtually no additional cost, giving them an infinite growth opportunity. Additionally, they benefit from network effects and see the perceived value of their products increase with the number of users. This is much easier with immaterial goods.

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[Case] Use others’ APIs Infinite enterprise

Implementing stripe’s API allows business to adopt a powerful and scalable payment method leaving to stripe the responsibility of storing cards, processing subscriptions, billing clients, offering coupons, or anything related to payments. A secure way to accept payments from nearly any country in the world, on any channel and at a very low marginal cost. You just have to take care of the rest ! Use other’s API to become scalable and benefit from low marginal costs.

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[Case] Give away your APIs …..

Infinite enterprise

Uber released its affiliate API last year to incentivize businesses and developers to refer users. Launch partners included OpenTable, Starbucks, TripAdvisor, and United Airlines. Developers will get $5 for every U.S.-based user they sign up for Uber through API integrations in their own and can earn up to $5000 in referal fees. An usage of APIs to increase reach and reach more potential users.

Give away your APIs to grow through others’ networks.

“Consider ways to galvanize your users into trying the seamless Uber experience.”

“Consider emailing your user base to ensure they are aware of the Uber integration within your app” Uber.com

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Intimate enterprise

MAGNET REAL-TIME INFINITE INTIMATE + + + 4 =

Hospitality is the norm

Networked companies use customer knowledge to fine-tune and personalize the experiences they deliver to each customer. Large-scale customization is at the heart of their products. Targeting and customizing their products to every single user, they create intimate long-lasting relationships.

Their competitive advantage is customer hospitality and comfort.

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Intimate enterprise

How it works


Companies produce in mass and sell a identical product to all their customers.

Network economy –

Companies offer tailored products and customization possibilities to each of their customers, creating an intimate and long-lasting experience.

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[Case] Use others’ APIs Intimate enterprise

By using Facebook Login, companies can ease the registration and signing in process, building a more fluid and intimate usage experience for their users. They can also personalize their interactions by gathering valuable information about their user’s needs and preferences based on their likes and personal profiles. Use other’s APIs to personalize your services by better understanding them.

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[Case] Give away your APIs Among others, Slack released its Real Time Messaging API, widely used to create what Slack calls bots: useful tools that can respond to messages chat users type into a chatroom, or interact at specific points in time. With a little sense of code, every team can create its own bots, answering its own needs, making customization virtually limitless. Slack recently went one step further by introducing its own store to let teams offer and download bots.

Give away your APIs to let customers customize your products and services.

Intimate enterprise

Applidium created 2 bots answering their own needs: one that randomly pairs them up for lunch once a week: Cyril. Another ones

that records and ranks their FIFA tournament results: Zizou.

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Leverage APIs to embrace superpowers

Intimate enterprise

Magnet enterprise Real-time enterprise

Infinite enterprise Networked company

By leveraging APIs, companies can structures themselves around networks. They automatically benefit from these 4 superpowers and gain unfair competitive advantage in the new economy.

One golden rule: Connect and Open

“There is no future for hermetically sealed closed systems in the Network

Economy. […] Every time a closed system opens, it begins to interact

more directly with other existing systems, and therefore acquires all

the value of those systems.”

Kevin Kelly Wired co-founder

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ARE YOU NEXT

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See also…

Facebook, The Perfect Startup (2012) 6 365k views on Slideshare

Amazon, The Hidden Empire (2011) 918k views on Slideshare

•••

Three digital engines to reshape and dominate retail

mazon.com THE HIDDEN EMPIRE

Linkedin, The serious Network (2013) 253k views on Slideshare

Google, Everything you always wanted to know (2008) 540k views on Slideshare

Everything you always wanted to know about Google…But were afraid to ask

Paris, December 2008

And more.

Apple: 8 Easy Steps to Beat Microsoft (and Google)

Paris, September 2010

Apple, 8 easy steps to beat Microsoft (and Google) (2011) 179k views on Slideshare

GAFAnomics®, New Economy New rules (2014) - 260k views on Slideshare

GAFAnomics®, 4 superpowers to outperform in the network economy (nov, 2015)

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4 sessions to become a GAFAnomics expert (customer, innovation and organization, network

economy, strategy) and implement their best practices toyour business

Inspiring keynotes

Collaborative workshops

Cross-sessions business case

Certification and alumni community

Next sessions in January 2016 (Paris)

Information and inscriptions on

academy.gafanomics.com

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We are

A new world needs new solutions

Who we are

We are a “digital native” organization of a new type, nourished by a unique culture and incomparable talents. We gather wide and cutting-edge capabilities –in strategy, software, design and data marketing – boosting our clients’ competitiveness.

Our offices

From our offices in San Francisco, Paris, Toulouse, Lisbon and Moscow, we work with clients everywhere in the world to help them define and develop new opportunities.

What we do

We transform feared disruptions into business opportunities. We craft impactful user experiences that benefit our clients and their customers. We build agile prototypes to test and develop strong strategic assets. And we play a prominent role with a sustainable impact, in the best ecosystems. At startup speed.

@FABERNOVEL facebook.com/FABERNOVEL FABERNOVEL.com

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A full stack and digital native company to identify levers for competitiveness

Stéphane DISTINGUIN Founder & CEO FABERNOVEL [email protected]

Cyril VART VP Strategy & Development FABERNOVEL [email protected]

Leila TURNER CEO FABERNOVEL Paris [email protected]

Dominique PIOTET CEO FABERNOVEL US & PARISOMA [email protected]

Baptiste BENEZET CEO Applidium [email protected]

Alexis Godais CEO Buzzaka [email protected]

Kevin GENTIL-CANTIN Co-founder & CEO lagencemedia [email protected]

Yassine BELFKIH Co-founder & CEO lagencemedia [email protected]

Antonin TORIKIAN CEO Institut FABERNOVEL [email protected]

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Credits

Audrey DA CRUZ Junior Art Director

Amaury BOTREL Art Director

DESIGN -

Stéphane DISTINGUIN Founder & CEO

Cyril VART VP Strategy & Development

Sarah NOKRY Senior Project Analyst

Kevin ECHRAGHI Project Analyst

Louis MOULLARD Senior Project Analyst

RESEARCH -

SPECIAL THANKS - Robin Chase (Peers Inc) | Vivek Badrinath (Accor) | Angelos Souriadakis (Ylios) | Philippe Février (Veltys)

David Salabi (Financière Cambon) | François Druel | Jean-Christophe Liaubet (Exane) | Air France Manager Café

Pierre-Baptiste Goutagny (Ex-FABERNOVEL Paris) | Elisa Jo Harkness (FABERNOVEL US)

Benoit TALABOT Partner & Creative Director

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GAFAnomics: Using APIs to gain unfair competitive advantage in the network economy

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