When companies started releasing awesome APIs for free, we kinda wondered "what's the catch?". Years later, we're finding out.
The hype surrounding free APIs without formal agreements is the biggest farce in the Valley. We are now in that phase of the cycle where this will become more and more apparent as these companies with awesome APIs get serious about making money(and the free API impeding their revenue plans).
Free APIs--especially the powerful ones--should be seen as "cute things" with little purpose beyond experimental side projects. If you ACTUALLY want to build a company off someone's API, get a formal agreement with that company especially if that company insists you don't need one.
So much has changed since the 90s when access to APIs meant paying huge $. And yet, so little has really changed.
I think they were attempting to pursue a bait-and-switch strategy but ended up backing off. H.264 originally came with a "free for 5 years" license for certain kinds of non-subscription online video, which was renewed for a second 5 years in 2010. It was widely assumed that the intent was to start charging once everyone had been lured into being reliant on it.
It's currently offered "for free" to many people. That's one of the big arguments people always make in the H.264 vs. Google debate — H.264 is just as free for most users, and surely the MPEG-LA would never turn around and change that.
I think that's the bubbliest part of the startup bubble, a lot of cool startups could be crushed overnight if the big player who they orbit changes the free API they sprung up to use.
I slightly disagree. Many people have minted quite a bit of coin off these "cute things" and some started real companies that grew a brand name because of them.
Its fine to rely on them, but you need an exit plan.
"Quite a bit" is very relative. I think there are a bunch of individuals who have developed apps and sold it for some decent $.
But on a larger scale, there are few venture-backed cos without formal API agreements who have not run into trouble. Those are really the ones I was addressing. Like you said, ones who succeed have an exit plan in which case they are not really relying exclusively on the APIs so it becomes a moot point.
A guy building an app on top of an API and the app taking off is still building "cute things" in my book. And yes, every now and then you can make a quick buck from the cute thing.
The hype surrounding free APIs without formal agreements is the biggest farce in the Valley. We are now in that phase of the cycle where this will become more and more apparent as these companies with awesome APIs get serious about making money(and the free API impeding their revenue plans).
Free APIs--especially the powerful ones--should be seen as "cute things" with little purpose beyond experimental side projects. If you ACTUALLY want to build a company off someone's API, get a formal agreement with that company especially if that company insists you don't need one.
So much has changed since the 90s when access to APIs meant paying huge $. And yet, so little has really changed.