API-as-a-Product | API Best Practices for Products | Stoplight (2024)

APIs promise the ability to experiment and monetize quickly with a company's unique, niche, or core capabilities. Teams that build APIs should understand the needs of their customers and internal users, and make the product compelling to them through design, prototyping, testing, and feedback.

APIs, like products, should be actively maintained, supported, and easy to use. They should have an owner who advocates for the customer and strives for continual improvement. Product mindset is the missing ingredient that makes the difference between ordinary enterprise integration and an agile business built on a platform of APIs.

API-as-a-Product is an established and increasingly popular software development concept. But what is API-as-a-Product? What are some ways an organization can monetize an API?

Like Software-as-a-Service, an API-as-a-Product exposes and monetizes an organization’s unique functionality or services. These services are typically delivered over HTTP. In this model, the API is at the core of the business’s value. For API-as-a-Products, the API is not only the method of delivery; it is what is being delivered.

"API-as-a-Product can be compared to an API-driven Software-as-a-Service (SaaS) offering, where the API powers the software and its surrounding business logic."

Source: Nordic APIs

Some organizations are already doing it right with high-quality, easy-to-use, well-documented APIs. Here are some examples of successful API products.

• At its core, Stripe is a payment processing platform that enables eCommerce transactions through an API. However, the API is not a store or a place to make a purchase. Stripe enables commerce through easy-to-integrate payment options for all kinds of digital storefronts to decrease costs and speed up time-to-market.
• Twilio is a communications facilitation platform that allows agents and customers to communicate across a large variety of platforms, Twilio is a communication platform but is instead a platform that creates communication connections, bringing benefits to companies who don’t have the resources or don’t want to create in-house communication channels, but need integrate channels into their existing infrastructure.
• eBay considers their APIs to be products, and they are first-class products at that. They have a large and powerful ecosystem of third-party developers and applications that add value to both eBay and their customers, the buyers and sellers; this means they truly rely heavily on the developer model. APIs as building blocks that developers put together in a unique way to do a variety of things, including being managers, sellers, business owners, scaling to provide logistic services, providing bookkeeping services, handling marketing, etc.

"We allow all developer parties to take all of these building blocks and uniquely combine them and from that create great quality experiences. We design these APIs and maintain them so that these developer groups can provide good products to their customers."

Tanya Vlahovic, Head of the Developer Ecosystem & Lead API Architect at eBay

• Netflix can stream to over 200 different device types thanks to its API.
• 60% of eBay’s listings are done through their API.
• 50% of Salesforce transactions are done through their API.
• Twitter receives over 13 billion API calls daily.

The need for effective API creation has never been stronger. As more organizations and leaders learn about APIs and how to use them to dominate their market, often there’s a rush to get an API out and running without following the necessary steps to ensure a successful product.

First, it’s critical to understand the big picture; why does an API matter for your business model? Why will an API be the right delivery system for your business value? And how will it delight your customers?

Fundamentally, APIs are software that exposes certain data and enables users to do something useful with it. In general, organizations create APIs to compound the value they offer to their customers.

But before a business can build upon its value proposition, the leadership team must be able to clearly articulate how the proposed APIs will deliver that value. While this seems obvious, it's frequently a challenge for companies to pin down exactly how an API will maximize their value proposition.

Here are three lenses through which to view the API program under consideration:

• What will the API do for people?
• Who, specifically, will be using the API? What are their needs?
• What other companies are working in this space? How will your API compare?

Once you can answer these questions, you have determined the value proposition for your API and should have a sense of the competitive landscape and potential return on investment (ROI). Successful API makers have good answers for all of these questions and then make the APIs as simple and easy as possible to adopt.

How are products created?

‍Follow product management principles.

"The challenges of opening an API are 50% technical and 50% business."

Satisfied customers, more revenue, and accelerated growth all sound great. But before you dive into standing up an API, consider the following traditional Product needs.

Connect APIs to a product mindset.

According to If You Build It, Will They Come?, a book by Dr. Rob Adams: companies need to allocate similar budgets for Sales/Marketing and Engineering. Your API requires a product-style support system for its best chance of success.

Consider:

• Business justification
• User personas
• Clear use cases
• Positioning and competitive intelligence
• Roadmap
• Revenue model
• Pre- and post-launch plans
• Marketing and sales lans
• Support and documentation
• Security

As the business leader for an API, an API product manager helps the organization develop a vision and strategy for its API products. This includes defining which APIs are required via research on the business needs, and the needs of developers and internal and external consumers.

A major responsibility of an API product manager is the ability to clearly articulate the product’s value and benefits to internal stakeholders and end users. They have to champion their API product throughout development and implementation, manage the launch, and get feedback from business leaders and end users to continue to improve the product. These traditional product practices will ensure an API product manager will create, deliver, manage, and iterate on a solid product.

Source: 3Pillar

Treating your API as a product requires discipline and culture change.

Adding an API to your product can bring a significant competitive advantage and increased revenue. In our connected world and the era of the Internet of Things, not having an API could be the difference between rapid adoption or being left behind by the competition.

But, as alluring as it might be, you need to consider all the challenges ahead and ensure that your company is ready to support this initiative with not only engineering but with everything it entails across all departments.

• Is Your Organization Ready to Build APIs? Answer These 3 Questions First
• How APIs Become API Products
• Understanding the API Product Manager Role
• APIs as a product
• What Is an API-as-a-Product?
• The API Product Mindset
• The Complete Guide to API Products