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If you’re not serving the customer, your job is to be serving someone who is. ~ Jan Carlzon, CEO SAS

One of the articles I read recently (5 Things CMOs Need to Know About APIs) hit home with respect to either a topic I’ve previously posted about, or situations relative to my role recently.

If you don’t understand APIs, the article provides a very nice high level intro into the topic and is worth the read.  But there are two specific points the article makes that I want to touch upon.

Point #1 – Be Where Your Customers Are

As Product Management leaders, we should be addressing three simple questions relative to the products/services we are leading:

1. Who am I serving?
2. What do they need/want, and are ready to buy?
3. How can I reach them and persuade them?

Understanding this context has been an important transformative element of our strategy over the past year or so.  For the past 4 decades, the model by which the company had reached its customers worked well. But the market has evolved with new solutions, new technologies, and new entrants.

And as much as customers may love their bank or payments processor, it’s not necessarily the first place they will look when addressing their eCommerce needs. They will look to someone who specializes in a web presence and/or can develop cool mobile apps.  Which means that success moving forward is predicated on actively engaging with and participating in the API economy … exposing our capabilities and enabling the ecosystem.  Which leads me to the second point …

Point #2 – Partnering for Digital Network Effects

The author makes the point “In today’s digital world, [partnerships] flourish when you provide valuable assets in a way that makes them easy to use … Together they create network effects and fuel growth. It’s not people negotiating partnership contracts that connect them, it’s APIs.”

To dig into that point a bit more I am going to get somewhat technical with two principles to support the statement:

  1. There is a limit to how many connections a single node (think channel) can handle directly.  This is known as Dunbar’s number.
  2. If you introduce something called a multiplier, you can effectively expand the value of the network proportionately to the number of nodes added (also known as Metcalfe’s Law)

If you are interested into digging into this deeper, there is a nice blog about it here.

So in essence, the better your ability to reach customers through partners, the more customers you will reach.