The other day, I was talking to the CTO of a company that is working to build a web technology solution for a problem that exists due to the arcane infrastructure and systems already in place in the niche target industry. He was mourning the fact that, after spending gobs of time wireframing and re-wireframing a solution, the parties who initially expressed interest in licensing the technology, had decided to walk away from the table for a variety of reasons.

The big conglomerate that had decided to walk had expressed concern over the fact that they already had systems for billing and other management aspects of their company and didn’t want to invest in something unknown and untried over their long-standing, yet antiquated, solution.

Over the course of an hour or so, and even since then, we looked over his wireframes determining what the company should look like in order to make some sales, if not all the sales he wanted. I realized that his product was designed in such a way that dependencies were created everywhere. If a customer wanted just this one portion that does employee management but not the other part that does billing, there was no productive way to do this so he could make a sale without making the big sale.

In the web world, we talk about mashups. Take a google map and mash it up with Twitter and you have Twittervision. Mashup Basecamp with FreshBooks and tie in Salesforce and you’ve got a complete back-office CRM-Billing system to build your company on top of.

The strength of mashups is the distributed nature of the work. I no longer have to store my own video files because YouTube will do it for me and give me a means to access it, thus eliminating the overhead and cost of doing business associated with that video. I no longer have to worry about the development time and money needed to distribute a widget containing my content to other websites because Clearspring does that work for me. The trick is in APIs which allow others to innovate on top of the technologies created by others.

My advice to this entrepreneur was to create APIs between his various modules and build out-of-the-box products that he could sell that utilize those APIs. In fact the APIs can be open and still be paid access, which provides another stream of revenue – especially when his clients have the money to pay top dollar for those APIs if they consider the alternative cost of throwing out entire chunks of their existing infrastructure and using an out of the box solution that may not meet their unique needs.