How to Profit From Free and Open APIs

Open data is free. So you’re just wasting your time building something on top of something free, right? Why would someone pay for it? Wrong! There are a lot of flaws found within a lot of the free data scattered out there and there’s simply too much of it  Those issues combined create an increasingly huge market demand for ways to curate that data for an intended audience.

Ed Freyfogle, co-founder of Lokku, Ltd., which owns OpenCage Data, a meta-geocoding API based on free data, spoke at APIcon UK (see the full video at the end of page 2 of this article). He said about his company, “The data is free as in freedom. I didn’t talk about monetary freedom.”

What does that mean? The answer to that all comes down to how to make your business scalable by bringing at least some open data into your mix.

How do you build a business on a foundation of big data?

Start by asking what is your differentiator, the moat you can build up around your business that makes you defendable.

You need to change how you look at your competition— and it’s not just your direct competitors, you have to think bigger. “We try to think about competition as any way the consumer can address the problem,” Freyfogle said.

He breaks down how to approach direct and indirect competition. Indirect competition are the people who choose to build it themselves and people who choose not to use a solution at all. In order to overcome this, you need to work on answering:

  • How can we make people aware our our product?
  • How can we reduce the barrier to trial?
  • How can we price it correctly and make it simple enough, they think it’s easier to use our product?

Now for fighting against direct competition, you need to first identify who your direct competition is.

For his own project OpenCase, they look to answer the question “Where are we?” by bringing together the longitude and latitude that computers read and the way humans describe location because “If you ask humans where you are, there are different answers, all technically correct, all divergent.” With their particular API, you can put in a name or address get get back longitude and latitude in forward geocoding or do it the opposite way for reverse geocoding.

Freyfogle admits that Google and Google MapsTrack this API do this exceptionally well, but “the challenge with that is that they have terrible terms and conditions, so for example, if you use the Google geocoder, you can only then show that result on a Google Map and many people don’t like that. Also, in most countries—not all—Google charges quite a lot for using their geoservices, especially if you’re using them at a volume.”

Technically, the open source resource OpenstreetmapTrack this API is also a competitor, but OpenCase instead chooses to work with them because Freyfogle says the service is great but “since they are a sort of volunteer organization” it can’t handle high volumes needed by enterprises and it can’t have a fully international breadth.

With direct competition, you need to start with focusing on how you position your:

  • product
  • price
  • placement
  • promotion

As Freyfogle puts it, “How do we make sure that the underlying product isn’t a commodity while the underlying data is.” For them, it’s to add the open data—including timezones, OS gridrefs, geohash, what3words— and then figure out how to curate it all.

Jennifer Riggins Writer, marketer and luddite in a technical world. Obsessed with helping tech and startups sell their value to us laypeople, improve efficiency, management practices, and message. Learning something new and laughing every single day.