Clearbit’s Playbook for Growth in the API Economy
The API Economy had its coming out party in 2016. Twilio had a massively successful IPO. Google acquired Apigee. Stripe was asked to join President Obama on his historic trip to Cuba. But the path to success in this ecosystem isn’t as easy as simply touting your API-first street cred by putting source code on your homepage in hopes that someone with budget “asks their developer.”
“There are lots of APIs that get upvoted on Product Hunt, but that doesn’t mean you’re going to build a big company,” says Alex MacCaw, co-founder and CEO of Clearbit. And he would know. He joined Stripe in 2012 as an engineer and created Stripe Checkout, which now processes billions in transaction volume.
Clearbit builds data APIs, and they want to power every aspect of customer analytics for your business. They are starting with entity intelligence, allowing users to turn an email or a domain into rich insights on who owns it. “We help you understand your customers better, so you can serve them in a more personal way,” MacCaw says. “Without data, you are flying blind.”
The message is resonating and Clearbit has quickly become a must-have for some of the most sophisticated growth teams in the world. How did an 11-person team accomplish this in the crowded world of the API economy? What can others learn from their success?
Why Build an API-first Company?
People don’t want another tool in their stack. This is especially true in sales & marketing – a quick glance at the Salesforce AppExchange or the Marketing Technology Landscape will overwhelm even the most stouthearted growth leaders. “Companies are experiencing serious tool fatigue,” explains MacCaw. “We didn’t want to create yet another dashboard where you have to login everyday.”
Clearbit realized they could have a much larger impact by making a customer’s existing stack better with data. Easier said than done. As MacCaw explains, “Data for its own sake is counterproductive. Just ask anyone who’s ever bought a lead list.” It has to be highly relevant and persistently accurate data that can be called on demand when and where it’s needed.
You can’t simply elect to build an API service because it worked for Twilio. That’s working backwards to find a problem for your desired solution. Clearbit reasoned from first principles and rightly concluded that an API-first service was the optimal way to solve their unique problem.
A Product Strategy That Drives Growth
There are some obvious pillars of product success for an API service. “The best feature of Clearbit is that it works,” says MacCaw. “And we have really good docs.”
Good API? Check. Good docs? Check. How else can can product strategy drive an API’s growth?
You can create a rising tide of value with a multi-API strategy. “The service gets better everyday thanks to our data network effects, but we’re also looking for ways turn that data into new insights for our users,” explains MacCaw. “With Clearbit, you install one library and get access to seven different APIs. It’s all about giving developers more leverage.” This removes any blockers to discovery and adoption of new services, which helps users solve more problems with Clearbit.
This approach also fuels word-of-mouth. If you are constantly addressing new use cases, it naturally increases the occasions for word-of-mouth. “We see this happening all the time today when our users demo their growth workflows,” says MacCaw. “The reactions they get are like, ‘Wait, what’s that? How did you get all that information about this lead?’ And their answer is always, ‘Oh we’re using Clearbit to do that.’”
Your Product is Your Marketing
In Clearbit’s iterative search for new additions to their collection of data APIs, they find pieces of the puzzle that have standalone value. So they make them available for free to anyone, often without even requiring an email address.
For example, the Logo API is helpful and super lightweight API that lets you pull any company logo using just a domain. It basically makes one of Clearbit’s 85 unique data points available on its own, in one API call, for free.
Why bother? Well it turns out the Logo API is extremely popular. It made the front page of Hacker News, officially won Product Hunt, and guess what – a lot of developers and growth leaders read those sites. It’s amazing lead gen. Not the spammy kind. The good kind that actually provides value to users.
The Logo API wasn’t a one-hit-wonder. Clearbit has had repeat success using free products for lead generation. They aren’t just going back to the same well either. Clearbit Connect isn’t an API for developers, yet it was even more popular.
How to Not Scare Users Away
A lot of developers in the API economy mistake API-first for API-only. If your service grows in strategic value and usage inside an organization, then eventually the business people will ask their developer. And you need to be ready for that conversation.
“When we first started, our approach was, ‘Here’s the API. Here are the docs. Go to town,’” says MacCaw. It works beautifully with the developer audience, but Clearbit doesn’t only serve developers. The downstream value is seen in sales & marketing. And that’s where the budget ultimately comes from.
When new personas enter the conversation, you have to speak their language. “As we grew, we realized that we needed to appeal to a wider audience. You can’t scare the business people away with words like “API” and that kind of thing,” says MacCaw. “They don’t want to go to your site and find nothing but developer speak and API docs.”
Today, Clearbit speaks to sales and marketing personas with messages like, “Enrich your CRM,” and “Speed up lead qualification.” It’s vastly different than the original messaging.
Stripe went through the same transition. Back in the early days, they were only speaking to developers.
Today, it’s a different story. Stripe now clearly leads with a non-technical messaging that speaks to business value rather displaying source code front-and-center.
But what about your roots? Is this turning your back on the developers who put you on the map to begin with? MacCaw insists that you don’t have to change your DNA as a developer-focus company. “If you’re a developer looking at Stripe’s website, you know where to go immediately. You just go check out the API docs,” he says.
These kinds of changes can feel like Dylan going electric to developers, but really it’s just website copy and messaging. No need to lay an axe to the cables here.
What Does a Non-Technical User Do with an API?
There’s a catch. That non-technical user you won over with the “business value” messaging is soon asking, “sooo… what exactly is your product?” An API-only product is hard to grasp if you aren’t a developer.
That whole “not having a dashboard where you have to login everyday” thing? It’s kinda starting to feel like a double-edged sword. Non-technical users also need a way to use the product that doesn’t require coding.
For Clearbit, the answer was to parlay the API into turnkey integrations. “We have integrations with Salesforce, Marketo, Segment, and many others,” says MacCaw. “A sales ops leader won’t know what to do with an API, but they can immediately grok a Salesforce plugin.”
Each integration is a new endpoint that extends the reach of the product. More endpoints means more distribution and faster time-to-value for the most popular use cases. It’s a total win-win.
Can You Be Self-Serve Forever?
Everyone has a different view of the right way to do sales. Any good API-first business is likely “by developers, for developers” and therefore doesn’t initially have sales people. After all, developers don’t even want to be on LinkedIn, let alone spammed with email or called on the phone. Everyone knows that.
But it would be short-sighted to conclude that an API-first business should never hire sales people. Clearbit was pulled by customers into doing sales for two reasons.
The first reason is pretty simple: price. Clearbit’s customers naturally increase their usage by enriching more leads, but also by trying new additions to the multi-API suite like Reveal. “If you’re going to spend thousands of dollars a month for anything, you want to talk to someone,” says MacCaw.
The second reason comes back to non-technical users. As with messaging and website copy, the right approach is a personalized one. It’s speaking to each persona in their own language and their preferred medium. “Engineers and developers tend to be pretty happy with self-service,” explains MacCaw. “But sales and marketing directors generally just want to hop on a call with someone, explain their problem and get an exact answer.”
MacCaw sees the need for a sales team as an inevitability. “You can rely on self-service for a long time, but everyone from Atlassian to Stripe to New Relic has a sales team today,” he says.
Even so, you get to decide what “sales” means for your company. Everyone on Clearbit’s growth team can write code. This is critical, because they aren’t just taking calls with non-technical users, but also working with developers to troubleshoot new integrations and implement creative API use cases. “The context-switching is pretty extreme, so we’ve hired people who can handle it,” says MacCaw.
Sales may be inevitable, but it’s never one-size-fits-all. You have a blank canvas, and you can do it in your own way.
Keeping It Real
The API Economy is real, and we’re going to see many more success stories in the future. But going API-first doesn’t create a wormhole in the company growth continuum. Success requires a new era company to consider a lot of seemingly old school strategies like creating a “business case” for buyers and hiring salespeople.
For a developer-turned-founder, this can feel a lot like “selling out” or going mainstream. But what’s the alternative? Sure, you can keep it real and stay indie. But at what cost? If your company is compelled by a big vision, then you start to realize that what looks like “selling out” is really just embracing your own evolution.
The most important one: Don’t overthink it.
Thanks to the rise of product-led growth, it’s more urgent than ever to revisit freemium.