The Evolution of APIs, API-First Companies and the API Economy
Editor’s note: This article was written by Brittany La, product marketing manager at Checkr.
It shouldn’t be a surprise that the use of APIs to build technology platforms has grown in popularity over the last decade. When you think about Uber and how they leveraged the Google Maps API for the foundation of their ride sharing application, it’s obvious they did something right. Uber has completely disrupted the transportation industry and gained worldwide traction and adoption, ultimately going public in 2019. Companies looking to follow suit will want to consider building their platforms in the same manner.
API stands for Application Programming Interface and is a software intermediary or connection between two applications. It allows the two applications to talk to each other, passing data and information back and forth that each needs to run its own processes. It’s a powerful way to leverage what another application or platform has to build your own application.
Need a mapping solution? Leverage a maps API so you don’t have to build one from scratch. Need a background check solution? Leverage a background check API to incorporate into your application. Building a payment portal? Leverage a payments API to process those payments. The list goes on, and companies using an API strategy to build their products gain benefits such as:
- Faster go-to-market ability: When you don’t have to build a product and each of its elements from scratch and instead leverage APIs to integrate key functions, your product is ready to launch sooner because you spend less time and resources on development.
- Innovative products and brands: Industry-disruptors such as Uber are examples of how leveraging APIs to build products can differentiate your company from the competition as a modern and unique solution to everyday problems.
- Seamless user experiences: Take the background check example: What if your users had to leave your application to a separate one to run their background checks? It’s disjointed, confusing, and causes user dropoff. The more you can integrate key functions of your platform, the more seamless your user experience.
The API economy and API-first companies
Because of the growing interest and demand for API solutions, many API-first companies have gained traction. API-first companies build their products around the API, meaning they design their software with the API at the forefront. Ultimately, the product they’re selling is the API. According to Georgian, some offer industry-agnostic APIs, meaning that they can be used at any company regardless of industry (Checkr is one of these). Others are industry-specific, such as APIs specifically for healthcare or financial services platforms. The last group of API-first companies supports the API economy, offering API security, management, and monitoring products.
As API-first companies take the lead in the world of modern technology, they have developed their own ecosystem of exchanging functionality and data into what is now known as the API economy. According to Kristin R. Moyer, vice president and distinguished analyst at Gartner:
“The API economy is an enabler for turning a business or organization into a platform. Platforms multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services and social currency so that all participants are able to capture value.”
In short, API-first companies who offer API solutions for other organizations to build into their products have created an API economy where the sharing of functionality and data creates value and revenue. From this, innovative platforms are able to launch and see success, delivering customer delight and changing the modern technology landscape.