Application programming interfaces (APIs) have become the building blocks of modern software development. They enable developers to create powerful combinations of applications by providing a standardized way for disparate systems and devices to interact with each other, and they allow organizations to leverage their existing functionality and data to create seamless integrations.
APIs have led to individual developers as well as companies being able to define new business models and create new revenue streams. For those that are starting to make their APIs available to external users, moving to an API-as-a-product model can amplify all the benefits that APIs and the API Economy offer.
What We Mean by API as a Product
When we talk about API as a Product, we are referring to the process of treating an API as a standalone product rather than just a supporting technology. This means that APIs are designed, developed, and marketed like any other product at a company. The concept of API as a Product is more than just expanding access to an API to developers outside the organization. It is a shift in the way organizations think about APIs and how they are used to drive business value.
Benefits of Treating APIs as Products
Treating an API as a product will benefit a company not only by providing more opportunities for revenue through API monetization but also as a way to improve their APIs and API program as a whole. You can see the importance of APIs in driving business success with companies like Salesforce executing 50% of their transactions through their APIs and 60% of eBay’s listings done through APIs.
APIs can be packaged and sold to developers, as a service. Paid access, premium features, value-added services, and partnerships are all ways that businesses can monetize their APIs. If a company treats its APIs as products, it can improve the overall quality of its software. For instance, it forces an organization to prioritize aspects such as security and reliability. Additionally, companies will have to implement stronger processes for quality assurance and ensuring quality of service.
What Makes an API a Product?
“API-as-a-product” means treating your API as a product from its conceptualization to its ongoing management, and will include implementing user-centric design principles, creating better documentation, and maintaining strong customer relationships.
Meet the Needs of Your Target Audience
An API-as-a-Product approach means an API is designed to meet the needs of its target audience. Its functionality and value proposition must both be clear.
To achieve this, an API-as-a-Product must be designed with a user-centric approach and focus on providing a consistent and intuitive experience. This means gathering feedback from new or existing users to iterate on the design and make improvements. User stories should be created and centered on developers and consumers of the API.
Support Your API with Comprehensive Documentation
Comprehensive documentation is a key feature of an API-as-a-Product. Good API documentation will include both guides and reference documentation and the entire documentation set should facilitate discoverability through cross-references, tagging, and intuitive categorization.
A “Quick Start” guide should get developers to their first equivalent of “hello world” with the API as fast as possible with as few impediments as possible. A conceptual overview will introduce the problem domain to developers and explain how you’ve modeled it with entities. Using a developer portal to initiate walkthroughs will discuss how to execute specific use cases through API calls with code samples. These sorts of guides are useful not just to engineers who will be implementing against the API, but also serves as a brochure to executives and business analysts who are trying to determine if your API will meet their needs.
Comprehensive documentation is also vital in providing a reference that thoroughly docs all the endpoints, input parameters, API key, and responses, including potential errors. Ideally, this reference will be interactive, with tutorials, allowing developers to experiment with the API and see immediate results.
Maintain a Relationship with Your Consumers
When your product is an API, your primary consumers are developers. As with any product, you want feedback mechanisms in place to help maintain your customer relationships.
For developers, this means providing them with tools to identify and track bugs, allowing them to play a role in prioritizing improvements, and enabling them to suggest edits to the documentation. Part of how your API will be evaluated by prospective developers will be how active its support is — if bugs are going unaddressed or they cannot get help with issues, they may feel that the product is not being maintained. Hosting webinars with consumers is also a great way to build and maintain these relationships.
Manage Your API as a Product
If an API is a product, its lifecycle must be managed as such by an API product manager and a dedicated team responsible for its success and continuous improvement.
Your API product manager and development team will need to prioritize policy details such as your approach to versioning, deprecation, and ongoing support and maintenance. The API should have its own release cycle, QA process, and issue tracking. An API hub will help to streamline these API management processes.
Making an API Successful
As a company shifts to productizing its APIs, it will want to ensure its investment of API resources will be justified and there will be widespread adoption of the APIs. Many of the same factors that make a typical consumer product successful will also apply to APIs, from providing a great customer experience to continued internal development, and selecting the right business model.
Create a Great Developer Experience
For a successful API product, and like any product to be successful, an API-as-a-Product must evoke a positive consumer experience. As developers are your primary consumers, you must consider how they experience the API.
In addition to having the quality of documentation as described above, your API should be easy to use. It should follow common conventions and have low barriers to entry. The easier developers find it to understand and use, the more likely it is that they will adopt it.
However, if an API is difficult to use because of complexity, inconsistency in its return values or conventions, or due to limits in its functionality, developers may look for other options. Not providing a developer tier for usage and making it difficult to authenticate for new users will prevent casual developers from doing exploratory coding.
The availability of software development kits (SDKs) and sandbox environments can also make the developer experience more positive by giving developers a mechanism to quickly start writing in the programming language of their choice and interacting with realistic data. If providing a working sandbox environment isn’t possible, try to streamline the process of provisioning environments for developers and write scripts to set up a minimal set of entities that will allow end users to accomplish common API tasks.
Guarantee Performance and Quality
Scalability, reliability, and security are also crucial features of a successful API-as-a-Product.
APIs must be able to handle increasing loads of traffic as the number of users and requests grow. This requires careful design of the API architecture, including the use of caching, load balancing, and other techniques to ensure your users don’t experience performance degradation.
Downtime or disruptions can have significant consequences, including lost revenue and decreased user confidence. The systems that support your API ecosystem must be designed with redundancy, failover mechanisms, and other measures that minimize the risk of service disruptions.
Security vulnerabilities can result in data breaches, fraud, and other types of cyberattacks that can have significant financial and reputational impacts. To ensure security, APIs must be designed with strong authentication, encryption, and access control mechanisms, as well as regular security audits and testing.
Make Your APIs Flexible
The more flexible your API is, the greater the possibilities for integration and adoption.
Flexibility in an API can take various forms, such as providing a range of endpoints, options, and parameters that allow users to customize their interactions with the API. Building an API with flexibility will mean not making queries and operations too restrictive in their implementation. You will also want to include features such as filters, sorting, and pagination options that allow users to retrieve specific data subsets that meet their requirements.
Drive Community Engagement
Community engagement fosters a sense of collaboration and ownership among users which will, in turn, foster adoption as they become advocates for your technology.
Community engagement involves building a community of developers and users around the API, where they can share ideas with each other, ask questions, and provide feedback. By engaging with the community, your API product manager and team can gain valuable insights into the needs and preferences of users, identify areas for improvement, and build a loyal user base. Community engagement can also increase the visibility and adoption of the API, leading to increased usage and revenue.
Moreover, a strong community can help to ensure the long-term success of the API, as users become invested in its ongoing development and growth.
Choose the Correct Business Model
The business model you choose will determine how the API generates revenue and ensures your long term success. You may want to use a freemium, subscription, pay-as-you-go, or market place model.
Choosing the right business model for an API product depends on factors such as the target audience, the competitive landscape, and the features and functionality of the API. The right business model can help drive adoption and revenue, while the wrong model can lead to missed opportunities.
How to Approach Productizing an API
Converting existing APIs into products can pose several challenges.
One challenge is incompleteness, where the API lacks adequate supporting endpoints that prevent consumers of the API from completing user journeys. The parameters, return values, or error conditions may also be unclear, inconsistent, or contain “cruft.” This can easily be the case for startups where particular features may have been built to accommodate an important customer without consideration being given as to how they fit into a larger, comprehensive environment.
Additionally, documentation issues such as outdated or missing definitions can be a challenge. Security and scalability may not have been prioritized, and an organization may discover it is not ready to provide the necessary level of technical support.
Shift to an API Product Mindset
To successfully productize APIs, businesses must shift from approaching APIs as projects to products. This means focusing on developers as consumers, not just builders, and defining the function and value of APIs, along with their requirements. Additionally, it is essential to practice “API-first” development, which involves focusing on clear API design and developing APIs with an understanding of their intended use cases.
Adopting a product mindset for API development can help organizations align their API strategies with business goals, drive innovation and collaboration, and improve the overall developer experience.
Resource Your API
To successfully productize APIs, businesses must resource the appropriate people and infrastructure.
Part of resourcing your organization in terms of personnel involves selecting an organizational structure that is best suited for their needs, such as single team ownership or horizontal cross-organizational structure. It also means filling key roles such as product managers responsible for the product strategy, roadmap and definition of the APIs, support personnel who have the technical expertise to work with developers, and technology evangelists who can engage with the developer community and promote the API.
Businesses also need to build out the infrastructure to support their APIs such as monitoring tools and an API hub to help manage and track the performance of their APIs. As the usage of the API grows, the infrastructure must be able to handle increased traffic and requests through techniques like load balancing and elastic scaling. This may involve leveraging an API Gateway, which acts as the front door for your API and provides features like routing, security, and rate limiting.
Build a Rollout Plan
A comprehensive plan should include a communication strategy that outlines how and when the API will be introduced to developers and stakeholders. Product managers should define a product roadmap that outlines the API’s development milestones and subsequent feature releases. The plan should identify the initial set of APIs to be offered for a minimum viable product (MVP) and determine the subsequent features and functionality that will be added over time.
By creating a well-defined rollout plan, businesses can ensure that their API is launched effectively and that developers and stakeholders have a clear understanding of the API’s value proposition and future development.
Evaluate and Maintain Your API
Evaluating and maintaining an API-as-a-product is critical for its long-term success.
It is important to use metrics to understand how the API is being used, its performance, and its impact on the business. Metrics such as the number of API calls, the number of active users, and the response times help the API management and API development team gain insights into how the API is being used and how it’s performing.
As we’ve discussed, providing support and soliciting feedback from developers is crucial to identify issues and unexpected behaviors as well as improve the overall user experience. This means creating opportunities to engage with developers, such as posting to forums or creating a presence at conferences, where you can foster a community around the API and help identify new product use cases.
It is also important to identify and prioritize new APIs based on market demand and business strategy. Regular updates should be planned and communicated to keep developers informed and engaged, and to ensure the API continues to meet evolving needs. By following these best practices, an API can stay relevant, useful, and valuable to both developers and businesses.
Unlock the Full Potential of Your APIs
Treating APIs as standalone products can unlock new value and revenue opportunities.
A fully productized API will drive greater adoption by ensuring you are meeting the needs of developers using your API. It is essential to embrace this approach to realize the full potential of APIs and stay ahead in today’s fast-paced technological landscape.
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