The Business of APIs
So what is an API? An API, or application programming interface, is a geeky way to describe the business & technology services of a company, exposed in such a way that you may benefit from them. Of course, if you are not too familiar with the term, that may be due to the fact that when you visit a company’s website that boasts an API to their service, it is usually hidden under “Developers Documentation” or explained as a long list of web service calls & code examples.
Some Abstraction
One way to better understand the value of an API, is to look at the services more abstractly. Instead of thinking of an API as an entry point for a piece of running code, let’s look at an API as a business service on-demand, provided to you so that you can build or extend your business atop of. If everyone understood this basic abstraction, think of the attraction web & traditional company’s would start to get from new and resource limited, but savvy business entrepreneurs. For example, if I were to form The Association of Web APIs, or the AWAPI (not to be confused with Feedburner’s Awareness API), we would be tasked to create a marketing plan around how to market APIs to the general public. This is where the challenge begins.
Building the Business Seems…Easy
My first task is to understand how to explain an API to Wilbur Willbanks, a savvy but retired business man, who wants to invest his money into his hobby and start a new antique business. A collection of business services on-demand would seem to be perfect for Mr. Willbanks. These services will find his inventory, store his inventory, sell his inventory online, create relationships & partnerships, pay bills, and keep his customers very happy by easing their burden in finding rare antiquities and having them available in a variety of ways. His hobby has just turned his little idea into a big contributor to the new economy, and creates jobs, pays taxes, increases consumer spending, and does all of this by using services he wouldn’t odinarily have access to. A great thing for his new antique shop is the low cost of operating, the high returns on investment, and a business model that lends him the freedom and time to focus on his passion, and not the intricacies of running a global business. His entire business is hinged on available APIs from several service providers, stringing together his entire business strategy.
Not Really News
Of course, big consulting & software firms have been offering to do this for decades, and have been building the infrastructure of what has laid the foundation of the internet & its APIs. But the truly amazing thing today is that anyone can do this now simply by integrating or using web APIs. Anyone can create their own business completely based on another company’s products & services. You don’t have to look very far to see this phenomenon either. Just take a look at what venture capital firms are investing in, and of course companies such as Amazon Web Services, Salesforce, Facebook, Twitter, YouTube, Google, and countless others who are providing a lot of backbone. Hundreds of companies are sprouting up daily that all have one thing in common…their core business is built around someone else’s core business, and they are using it more than likely, for free.
Free Is Important
Why is this important? Because, the openness of the API market creates an extremely low, or nonexistent, barrier to entry for a new venture. That’s right, Mr. Willbanks can start his business virtually for FREE. I say virtually because Wilbur may not be a developer, so he may need one. He also will need a way to pay the small fee for a platform to operate his business on, such as Amazon or some other cloud service. From there, he only needs to focus on what his business provides, and able to translate this effectively to a developer who could orchestrate the necessary APIs together and deliver Mr. Willbanks’ business services. Amazon can provide the servics necessary to locate, ship, store, and sell as much inventory as Mr. Willbanks instructs He can provide business rules in the form of talk of expansion, and the business can grow simply by changing these rules. This business is now fully running on various APIs, and has expanded into a booming online marketplace of rare antiques that does very well on eBay and other online marketplaces. The endless possibility is literally that…endless. He can grow & flex his business laterally, vertically, horizontally, and all on demand. He go click or brick, and the services will support him throughout his lifecycle. And all of this, thanks to these little pieces of technology called APIs.
Good luck Mr. Willbanks!
