Learn how to create an API product strategy.
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.
APIs allow your application to interact with an external service using a simple set of commands. APIs are a simple, straightforward tool for companies to expose their unique services and offerings to the world.
Learn more about the basics and answer the question "What is an API"? here.
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
Operating your API as a product allows you the freedom and flexibility of an API, allows you to release features more quickly, increases your business value’s reach to new customers and audiences, and expands your revenue opportunities.
Watch our API Intersection episode on API products, tooling, and metrics.
"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
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:
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.
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.
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.
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.
"One of the biggest challenges API product managers face is that they need to make sure APIs deliver the value that’s expected from a wide range of stakeholder groups:
One of the top skills an API product manager needs is a business mindset. They have to be able to juggle multiple relationships and needs between the business and the output. They have to be collaborative and willing to go to bat for their product and their end users.
Watch our API Intersection episode for tips to become a better API product manager.
The first step in any successful product is the Design stage. API design includes the planning and architectural decisions you make when building an API product. Just like product design, API design informs the user experience, and good API design principles meet initial expectations and continue to behave consistently and predictably.
Learn more about API design for your API product in this guide.
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.
Subscribe to the API Intersection podcast for more information about how to get started with your API product and how to set up a successful program.