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Friday, 8 May 2009

The era of API driven startup

I read an interesting article that outlines how APIs are changing the face of all businesses, not only that of web companies:
These are Fortune 500 companies in retail, travel, media, telcos and even healthcare. Their level of understanding ranges broadly from those who know what they hope to achieve by creating an API program and have established measurable goals, to those who aren’t quite sure what they will achieve, but know there is something out there happening and they want to be a part of it. They all know they need to do something new, different, and big to change their business. And APIs are going to play a role.

As I think about this, I begin to outline how does an API driven startup looks like. Are APIs the means to achieve edge competencies? How will it affect product development, marketing and business models etc?

Product Development
Product development start at the API level. Charlie O'donnell, in 2007, has already stated that an API driven product is the most appropriate model for a world of small pieces loosely joined, aggregated, remixed, mashed up. If you build it correctly, your product frontend should be created by your backend API. In that way, your service can exist in as many platforms as needed.

Related articles
"Excuse Me" APIs: Why most Facebook apps disappoint
API-First Design


An API business designs its marketing around different principles. It focuses on cultivating the edge, empowering them with know-how, with clear roads to financial success, with ways to improve their skills. It also means measuring how APIs contribute to key metrics such as lower customer aquisition costs and higher revenue. Don't ever treat API as a cost centre.

Related articles
APIs Are The Next Marketing Platform
Netflix App Gallery puts API enabled innovations all in one place

Open for Business: Best Buy’s Social Technology Strategy
Nokia Cuts Staff, Refocuses Its Services Push

Business Models
Like product development, business models for API are build within the company from day 1. What will be your business model? Will it be Pay Per Call, Flat Monthly Fee, Open Source Support Model, Ad Placement, Syndication Partnerships or Free? Will you separate between commercial and non-commerical use? Let the latter encourage experimentations while using the former to capture the resulting value.

Related articles
How do you monetise your API

As we move to the API economy, there will be many changes to how businesses operate. If you have experiences to share, do leave them in the comments.

Thanks for reading!