APIs · Strategy

What are the implications of building an application on top of a "competitor's" API?

MK6150

March 7th, 2016

We are considering building our product on top of the OpenTable and Yelp API.

Has anyone been denied access to an API due to being a "competitor?"

Marc Schulman Educational Entrepreneur Reporter

March 7th, 2016

I would be concerned since at any time they could deny you access Sent from my iPhone Marc Schulman President MultiEducator Inc Http://www.mutieducator.net

John Philpin People | Passion | Platforms

March 7th, 2016

no personal experience - but linkedIN used to allow a lot more access to their data and what you could do through their APIs until they started cutting it off to 'hobble' some companies that were beginning to rise up and compete

Alan Brody CEO, TECHmarketing, Convean: iBreakfast & Startupalooza

March 7th, 2016

This is pure strategic trade-off territory.

1. Short-term: great way to jump-start a business

2. Long-term: captive company

3. Capital? Unfundable - unless you can show a clear, independent growth path or a compelling case for acquisition by the API provider or competitor.

Johnathan Proffer Engineer, Innovator, Visionary, Entrepreneur

March 7th, 2016

It's highly likely you'll find yourself blocked by the competitor in question. Not right away, but as soon as you get noticed, they'll start squeezing you out, or block you outright.

They have no legal obligation to provide you with access, and since you're a competitor, they can demand licensing or fees as compensation for using their resources. I do not recommend taking that approach.

If you must, then have a fallback in place. Use the competitors data while it's available, build your user-base, and stock your own db tables with the data you need in order to provide the service. Determine ways to obtain this data yourself, and start building the tools / services to obtain that data.

It's not a sure-fire way to launch your business, but it at least won't leave you completely dead in the water when yelp or opentable pull the plug on you.

Gopi Mattel General Partner. Lifeboat Ventures

March 7th, 2016

The implications are bad, i believe.
The owner of the API does not have to outright reject your application access. They can find many ways in which your application does not work effectively. They can simply remove one of the key elements you need for your app to work, from the API supported elements list.
And it is in their best interest to do so.
There have been many instances where the API owner has denied access to their API over time. Both Linkedin and Twitter are guilty of this.
As a startup founder this would be a strategic weakness in your entire business. I would dig deeper and broader around your idea to find other alternative ideas. Ideas are easy.

George Lambert Interim CTO - CTO's for Hire

March 7th, 2016

If you are going to go down that road, consider their current terms of service, the implications of a change in their terms of service, and a design that incorporates building a middleware layer that you can use to replace it. You must assume as part of your design, the assumption that it will go away at any time without notice.

Chaim Sajnovsky owner at b7dev.com

March 7th, 2016

Hi, no, they won't deny it to you, but will always depending on they closing some important info on their API. In fact, they don't have a way to know who is fetching data..You always run after their tail though.

Graham Wert Co-Founder & CTO at ZenQMS and Mixette

March 7th, 2016

I think Alan summarized it best. If you're sort of following the lean startup methodology and you just want to use the APIs at the beginning to get yourself in front of customers and see if you're on the right track, that's probably fine. You can save some time and money that way, especially if your initial concept doesn't get the market validation you were hoping for (less sunk cost). However, you should definitely have a plan in place to migrate away from this dependency once you've determined that your concept works and you're ready to grow the business.

MK6150

March 7th, 2016

Thank you all for your responses!

@GrahamWert, that is exactly what we are trying to do. We want to validate the idea and whether or not there is a market/use/problem that really needs to be solved before investing in and building technology.

I'll take this as a yes for now!

Aji Abraham Proven Tech Cofounder, open to new ventures

March 8th, 2016

As a short term strategy this should be fine to get to market and test out your assumptions. There are horror stories of third party developers who applications got killed by the platform when they want to compete directly. Look at the case of twitpic. But I haven't heard of any such stories about ope table or Yelp yet.

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