APIcon UK: SimilarWeb Shares Its J-Curve Dev and Revenue Growth Experience

It is rare for an API provider to reveal quants around developers onboarded, API calls or revenue generated from its API. At APIcon UK, SimilarWeb offered a rare inside look, not only sharing its growth rate metrics but also revealing the tactics and techniques that got it there. Noam Schwartz, ex-CEO of TapDog — the competitive intelligence technology bought by SimilarWeb — shared his insights for the benefit of everyone in the API economy.

The coveted J-curve is the ultimate prize for any new business. It indicates a pattern of growth that leads a startup to implement scalable infrastructure and is a strong sign of the potential ongoing viability of the business.

At ProgrammableWeb, we see the J-curve all the time. It is evident in the growing number of APIs documented in our directory, a pattern of exponential growth that tells of the strength of the API economy. (This J-curve graph is becoming so familiar to API audiences that industry thought leaders John Sheehan and Mark O’Neill have made a drinking game of it, daring audiences to take a swig each time they see it used in an API event presentation. Please don’t do that.)

So there is a J-curve showing how APIs are becoming increasingly prevalent across industry as a business tool that enables new revenue growth and customer reach for existing companies and startups.

Then there is the J-curve for each business/API provider. Ideally, an API provider is trying to increase the number of developers using its API, creating a J-curve in API call rates. If the business model of the API provider has been designed well, this J-curve should match growth in revenue generated from API usage.

That’s the SimilarWeb API story that Schwartz, now head of business development at SimilarWeb, is able to show.


Noam Schwartz presenting at APIcon UK

In six short months from March to August, Schwartz implemented an API strategy that has seen fast growth in API adoption, mirrored by a sharp rise in revenue from API usage. What’s more, the revenue growth has required very little new marketing spend.

SimilarWeb is a digital insights platform that uses its own proprietary technology to crawl Web content and clickstream data and create metrics for any website or app. The result is a detailed website- and application-ranking database and visualization resource available for free and paid users.

Schwartz walked the APIcon UK audience through three key milestones of SimilarWeb’s J-curve experience.


Slide from SimilarWeb’s API calls growth from March to August, showing key growth rates occurring in April, May and August

Here are Schwartz’s key lessons for others:

1. Know How to Count

To prepare for potential growth, Schwartz acknowledges the following standard startup/SaaS metrics:

  • Units usage/units sold
  • Cost per lead (for this, Schwartz prefers to include everything, even salaries of all staff involved, not just the media buys expenditure)
  • Time to purchase (from freemium to paid subscriber)
  • Leads conversion (from freemium usage to paid usage)

For his API strategy, he looked at these metrics through an API lens, for example, looking at number of API calls, costs per developer onboarded and time from API freemium usage to paid usage.

This information can be difficult to calculate for one’s own business and to identify benchmarks to compare with industry competitors. For benchmarking, Schwartz eats his own dog food to make the task easier: He makes use of SimilarWeb’s data analytics capabilities to identify traffic sources and analyzes his competitors' Internet reach (such as the number of links that his competitors have). By doing so, an API provider could see, for example, what competitors spend on paid traffic search terms. For example, would it be worth the cost for a business to use paid search to advertise a “text mining API” or “sentiment analysis API”? This would then also be used to help identify possible developer onboarding costs.

Such an analysis is straightforward for API-as-a-product businesses, but it can be trickier to analyze the impact of an API program. Luckily, SimilarWeb does allow searches via subdomain, so many businesses could use the site to monitor analytics around a competitor’s developer portal (where it has been set up in the format developer.apiprovider.com) compared with, say, Google Analytics for your own developer engagement.

2. Participate in Communities of Interest

Schwartz encourages API providers to participate actively in the API communities on sites like GitHub, Stack Overflow, RubyGems, ProgrammableWeb and Mashape.

He identifies five ways to connect with communities:

  • Engage — Be active in the community
  • Partner — Co-market with the community
  • Takeover — Organically take over that category
  • Buy — Purchase ads on the site
  • Give — Create specific tools for partners

All of these initial efforts were done around April, which can be seen on the above graph as the initial lineal increase.

3. Identify Opportunities That Might Not Scale

Schwartz acknowledged that in his own business, like many others, it can be helpful to map the “dream flow” of what should happen as developers come on board.

Much more useful, though, is to look at the actual figures and identify what is really happening. Schwartz says this helped uncover some worthwhile strategies that might initially have been rejected as they are not scalable tactics.

For example, he built a simple tool to map the email of each developer, how many API calls were made and the entry point to the SimilarWeb API site.

He then integrated Rapportive’s add-on to his spreadsheet to leverage social media accounts to easily identify the company roles based on his developer emails. This led to identifying some key users — such as VPs within his customer base.

He then personalized outreach emails to this short list of high-quality leads from his own developer base.

Schwartz credits the significant ramp-up that occurred between May and June to this growth hack.

4. Hitchhike on Co-Marketing Opportunities

Finally, Schwartz looked to integrate and work with partners who already have a big audience. This is a variation of a co-marketing tactic. For example, D&B has a large number of data partners: API providers can get registered in its data partners marketplace. This can result in D&B’s clients accessing a third party’s API services and integrating them into their products.

Schwartz points to three marketplaces/showcases that he used to get the SimilarWeb API in front of a larger audience:

  • Azure Data Marketplace: “This is very helpful to leverage. They are always looking for unique data providers. The process is similar to getting an app featured: You need to talk to the marketplace editors and build the relationship. It’s the same everywhere, but for APIs it is much easier than getting your app featured, as a lot or people aren’t doing a good job in building those relationships.”
  • Salesforce AppExchange: "Just the app marketplace for Salesforce.com generates 1.5 billion in revenue a year.”
  • Google Docs Add-Ons: “So far, this has initiated more than $100,000 in revenue. We have created a product-a-week policy with Google, using our API to create a new tool each week focusing on a specific market audience. This has been the biggest driver of traffic, hands-down, and the biggest source of new revenue for us.”

Mesmerizing the APIcon UK Audience

In all of the recent API events that I have covered for ProgrammableWeb, this was one of the most insightful, practical presentations I have seen. Schwartz and SimilarWeb should be commended for being so open and generous with sharing their experiences for others in the API economy in order to help everyone’s potential growth. As with search optimization, growth hack strategies are forever changing. As one strategy gets overused, it becomes less effective. And among a cynical audience like developers, anything that sniffs of blatant marketing is quickly rejected. API providers need to be constantly thinking through new ways to build a developer ecosystem (after they have built a best practice, design-first API, of course!).

The strategies outlined by Schwartz, however, reflect the growing API infrastructure and a sophistication in understanding API developer adoption. Few API providers are analyzing developer onboarding sources or mining developer registrations to better communicate with individual users. It will be exciting to see where Schwartz takes SimilarWeb next as these practices become more common, as I have no doubt he will continue to be at the forefront of API adoption strategies in the future.

You can review his session as well as his slides on SlideShare below:


Mark Boyd is a ProgrammableWeb writer covering breaking news, API business strategies and models, open data, and smart cities.