I’ve long said that the value of SaaS for SMB end users lies, to a great extent, in the ability to tie together discreet applications. Obviously the ability to do so is dependent on the existence of good APIs on both sides of the integration exercise. Being involved in an advisory position for a few startups however, I’m all too aware of the pressures upon a small business with potential integration exercises coming from every direction – it’s hard enough for a bootstrapped company to develop their own product – when pressure mounts for multiple integration exercises, the difficulties mount.

That’s why I’m so impressed at the approach taken by Email newsletter company MailChimp. In a blog post a few days ago, MailChimp announced a $1 million fund to:

help small startups with small, paying projects. Projects that involve integrating their apps with the MailChimp API

The gist of the idea is that MailChimp will fund the development costs of different integrations, not to take any equity stake but rather to broaden the integrated ecosystem. In the blog post, MailChimp explained that their impressive growth has, in their estimation, come not from any silver bullet but rather from a concerted effort to integrate with a number of different application and in doing so, kick start a broad and rich application ecosystem. As they say:

if you’re an early-stage technology company, and you’re thinking about hiring sales people, or some marketing rock star, don’t do it. Just work on your API. Then, integrate with some great companies with open APIs (check out The Small Business Web), and use their popularity to grow your own customer base. Then, before you know it, new companies will start integrating with you to leverage your customer base. In the meantime, you’re all naturally promoting each other (technical blog posts and knowledge base articles are really marketing), and ecosystems start to form around you.

In the best-of-breed vs suite war, suites, with their deeply integrated product offerings tend to have the upper hand. Initiatives like MailChimp’s fund have two direct benefits:

1. They create a quasi-suite, where end users can pick from a selection of deeply integrated applications
2. They encourage developers to go out and build specific solutions, secure in the knowledge that it will be easy to integrate applications. In doing so they create a much rich ecosystem that benefits not only the develop but MailChimp and all the other applications out there.

As I’ve said before, bootstrapped startups have multiple pressures around integrations, initiatives like MailChimp’s look set to give them a significant leg up – and in keeping with the theory that “a rising tide lifts all boats” everyone benefits from that sort of approach.