No, your brand doesn't need an API
I just read Adam Klienberg's Mashable post, Why Every Brand Needs an Open API for Developers, and there was one good piece of advice in the whole thing: "Before you grab for that shiny object, ask yourself what you’re really trying to accomplish and how best to make that happen."
The idea is that with a public API, your brand could leverage the effort of outside developers writing apps against your API -- for free! Woo-hoo! The idea is sound enough; Atebits (makers of Tweetie) got aquired by Twitter last year because of their stellar Twitter app. I'm sure it helped with smartphone adoption of Twitter (their standard interface via sms was clunky at best), and Twitter got to buy the finished app all at once. Win-win, right? Thing is, this business model doesn't hold for a lot of brands. In fact, Klienberg picked possibly the dumbest brand and example he could think of: Kraft.
Imagine if Kraft released a simple API that allowed people to type in any ingredient and get back a list of healthy recipes from Kraft’s database? As new form factors emerge (like that refrigerator interface), independent developers could create new distribution mechanisms in a fraction of the time Kraft could — and without the cost.
What’s more, a company like Safeway could use that API to create its own app tied to their grocery delivery service. Customers could have all the ingredients in a selected recipe delivered to their front door. That would sell Kraft products.
Independent developers could create new distribution mechanisms? Like what, cheese via dsl? You can't use an app to sell them Kraft products directly. Well, I suppose you could, but if you're not Kraft, why in the world would you waste your time? Ok, so then help generate need with recipes and such. Well, that holds together until the shopper goes to the grocery store (or the Safeway web page) and sees Safeway Select cheese at 75% the cost of Kraft, and now the whole thing's out the window.
First, keep in mind that you can't be giving away information that puts you at a competitive disadvantage (perhaps price/cost) or user/customer information. Then ask yourself, could a third party leverage my data in some way that would be useful to my userbase/customer, and could that third party make money in the process? The answer for Twitter is an obvious yes; the same is true for Facebook and Google (maps API, anyone?). But Kraft? Nike? Evian? Don't be dense. Unless all three parties -- you, the developer, and the customer -- can benefit in some meaningful way, nobody's going to give your API a second look. Now you've spent time and money developing a neutered API (neutered because it's public, remember) when you could have just built a stupid throwaway app on your own and called it what it is: a marketing line-item. Kraft certainly got enough people talking about their app.
Here's the advice he should have given: if you're asking yourself, "does my brand need an API?" the answer is no. If it did, you'd have API written on a whiteboard or in a roadmap somewhere. "Brands need to think like startups," Kleinberg says. Expending effort on things that enhance value and not squandering capital is thinking like a startup. Fixating on the technology of the week without drawing a line between effort and value...
...well, come to think of it, that's a pretty startup thing to do, too.