What are the basics of an API strategy ?
API : Application Programming Interface
Per WIkipedia: " In computer programming, an Application Programming Interface is a set of subroutine definitions, protocols, and tools for building application software"
But what does it actually mean for the end user ?
APIs make it easier to integrate and connect people, places, systems, data, services and algorithms. They ;
- Create new user experiences
- Share data and information
- Authenticate people and services
- Enable transactions
- Leverage third-party algorithms
- Create new services and business models
To summarise: they are fundamental to scaling applications into platforms which increase the value of offerings. This ultimately drives more end-user engagement and adoption
To explain with an everyday example:
- You hail a taxi/ cab using a booking app (core service)
- The booking app uses Google Maps/ Mapbox API to send out a booking query (from point A to point B)
- The map API connects this booking query with GPS co-ordinates of drivers who are open to taking passengers
- Driver accepts your booking
- You pay for the service
- Your payment is shared between all connected parties
APIs are like glue which connect a SaaS world.
In an increasingly digital landscape, they have become fundamental to growth (especially for SaaS organisations). This is because digital services are often inter-dependant and no one company can capture and deliver all the niche service offerings that consumers need, for a seamless experience in completing a transaction or an end-to-end service.
Consecutively, they enable SaaS companies to
- Analyse their business
- Expand their distribution of services/ content
- Multiply user growth
- Monetize digital assets
Inferring from above, the fundamental transformation that APIs drive is around converting a business from a point software solution to a platform solution which can be leveraged by multiple businesses (and multiple softwares)
So why are platforms so important ?
The simple answer lies in increasing revenue share.
- Platforms allow creation of digital business models which enable eco-systems of people, businesses and connected services to create value from an outside-in perspective
- They thereby open up new lines of revenue
- They also work on the fundamentals of scale and leverge which makes it easier for businesses to grow
- Businesses can increase revenue by exposing existing assets like algorithms, data and analytics - ie there is no need for additional work or investment in new assets
It is a win-win situation in most cases.
So how does one start about bringing this strategy to life?
The three fundamental blocks are
- Adoption of technology that can create APIs from existing business assets like data, algorithm and transactions
- Investment in API management software which can deploy and manage the platform while maintatining data protection, user information sanctity and enterprise security
- Transformation of business processes which can scale curation of services from eco-system partners while being ethical, secure, reliable and compliant
References: Gartner, RapidAPI, Akana Software