One of my clients asked me for fifteen bullet points of what I’d say to help convince folks at his company that APIs are the future, and have potentially viable business models. While helping convince people of the market value of APIs is not really my game anymore, I’m still interested in putting on my business of APIs hat, and playing this game to see what I can brainstorm to convince folks to be more open with their APIs.
Here are the fifteen stories from the API space that I would share with folks to help them understand the potential.
- Web - Remember asking about the viability about the web? That was barely 20 years ago. APIs are just the next iteration of the web, and instead of just delivering HTML to humans for viewing in the browser, it is about sharing machine-readable versions for use in mobile, devices, and other types of applications.
- Cloud - The secret to Amazon’s success has been APIs. Their ability to disrupt retail commerce, and impact almost every other business sector with the cloud was API-driven.
- Mobile - APIs are how data, content, and algorithms are delivered to mobile devices, as well as provides developers with access to other device capabilities like the camera, GPS, and other essential aspects of our ubiquitous mobile devices.
- SalesForce - SalesForce has disrupted the CRM and sales market with it’s API-driven approach to software since 2001, generating 50% of its revenue via APIs.
- Twitter - Well, maybe Twitter is not the poster child of revenue, but I do think they provide an example of how an API can create a viable ecosystem where there is money to be made building businesses. There are numerous successful startups born out of the Twitter API ecosystem, and Twitter itself is a great example of what is possible with APIs–both good and bad.
- Twilio - Twilio is the poster child for how you do APIs right, build a proper business, then go public. Twilio has transformed messaging with their voice and SMS API solutions and provides a solid blueprint for building a viable business using APIs.
- Netflix - While the Netflix public API was widely seen as a failure, APIs have long driven internal and partner growth at Netflix, and has enabled the company to scale beyond the data center, into the cloud, then dominate and transform an industry at a global level.
- Apigee - The poster child for an API sector IPO, and then acquisition by Google–demonstrating the value of API management to the leading tech companies, as they position themselves for ongoing battle in the clouds.
- Automobiles - Most of the top automobile manufacturers have publicly available API programs and are actively courting other leading API providers like Facebook, Pandora, Youtube, and others–acknowledging the role APIs will play in the automobile experience of tomorrow.
- iPaaS - Integration platform as service providers like IFTTT and Zapier put APIs in the hands of the average business users, allowing them to orchestrate their presence and operations across the growing number of platforms we depend on each day.
- Big Data - Like it or not, data is often seen as the new oil, elevating the value of data, and increasing investment into acquiring this valuable data. APIs are the pipes for everything big data, analysis, visualization, prediction, and everything you need to quantify markets using data.
- Investments - Investment in API-focused companies have not slowed in a decade. VC’s are waking up to the competitive advantage of having APIs, and their portfolios are continuing to reflect the value APIs bring to the table.
- Acquisitions - Google buying Apigee, Red Hat buying 3Scale, Oracle buying Apiary, are just a few of the recent high profile API related acquisitions. Successful API startups are a valuable acquisition target, continuing to show the viability of building API businesses.
- Regulations - We are beginning to see the government move beyond just open data and getting into the API regulations and policy arena, with banking and PSD2 in Europe, FHIR in healthcare from Health and Human Services in the U.S., and other movements within a variety of sectors. As the value and importance of APIs grows, the need for government to step in and provide guidance for existing industries like taxicabs with Uber, or newer media outlets like Facebook or Twitter.
- Elections - As we are seeing in the UK, US, EU, and beyond, elections are being driven by social media, primarily Twitter, and Facebook, which are API-driven. This is all being fueled by advertising, which is primarily API driven via Facebook, Twitter, and Google.
If I was sitting in a room full of executives, these are the fifteen points I’d bring up to drive a conversation around the business viability of doing APIs. There are many other stories I’d include, but I would want to work from a variety of perspectives that would speak to leadership across a potentially wide variety of business sectors.
Honestly, APIs really don’t excite me at VC scale, but I get it. Personally, I think Amazon, Google, Azure, and a handful of API rock stars are going to dominate the conversation moving forward. However, there will still be a lot of opportunities in top performing business sectors, as well as in the long tail for the rest of us little guys. Hopefully, in the cracks, we can still innovate, while the tech giants partner with other industry giants and continue to gobble up API startups along the way.
