From SaaS and mobile apps to the cloud, from containers to machine learning, the application programming interface or API is the thread tying digital experiences as we know it together. An API acts as a translator of data, creating a common language among your teams and with your external partners and customers. That’s why cultivating an API-first mindset is essential to your long-term success.

“You’ll find the API-first mindset driving any success case in financial services today — no matter if it’s a 300-year-old bank or a fintech newcomer,” Rakshith Rao, CEO of APIwiz API lifecycle management platform, told Techeda. “Being API-first means you are built with composability and consumability in mind. Whether you choose to expose your API externally or not, you’ll see the benefits.”

An API-first mindset embraces APIs as products not features. Sometimes, made famous by Twilio and Stripe, this is where the API is the most important product. Or, as Amazon’s Jeff Bezos mandated back in 2002, API-first is when all internal communication and data transfers are via API calls, while all APIs are designed from the ground up to be externalizable. “That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions,” as Bezos wrote in an historic email that became the basis of the API-first design paradigm.

Treating your API program as a product has many positive technical and business implications to consider. “But it has to be done with much thought and caution upfront,” Rao warned.

How to think like an API-as-a-Product company

Yes, an API is made of code and thus technical, but, more and more, an API is being considered from its unique value proposition as a business asset. And this UVP can be consumed by internal customers, external customers, or both, regardless if they are paying.

According to the API-first Index, becoming a developer-first software company, as they call it, is certainly profitable, with:

  • API-first companies raising $12 billion in funding
  • With $5 billion raised in 2021 alone

What was also notable by this research was that 40% of all API-first companies are in the finance industry. With open banking requirements and new disruptors built in the cloud, finance is seeing a rapid transformation from traditional brick-and-mortar banking to everyone developing an API-first, fintech mindset. While branches are closing, certainly the finance industry is more profitable than ever.

“All companies should be API-first anyway because they can become more agile to pivot to new products, services and partnerships available,” Rao said. “First and foremost, API-first means thinking about your APIs as products, not features. APIs must be at the center of any digital strategy.”

So how do you adopt an API-as-a-Product mindset? You start by becoming an API-first development team. That means, no matter what the project or use case, treat APIs as first-class citizens. Even before building your API, you must design as if everything will be consumed on mobile devices and client applications.

An API-first approach may be a bit different from other end-consumer facing products, because it’s really thinking about developer experience from the start. But designing an API-as-a-Product automatically has you thinking more agile, with smaller consumable pieces that can fit together like an as-needed puzzle.

Considerations of API-first design

The design stage is the most important part of API-first development. It’s about not building anything until you collaboratively answer:

  • What is your API’s purpose?
  • Who will consume your API?
  • What are your API requirements?
  • How will you design your API?
  • What functionality will your API have? (Several functionalities call for several APIs.)
  • How will your API scale as your application evolves?

API-first design isn’t down to the individual. It requires full, cross-team buy-in. And then it requires revisiting incrementally, responding to a tighter feedback loop, no matter what the size of your organization.

At the end of the day, any API-as-a-Product is a contract — between a server and client, and between its creators and its consumers.

Leverage the power of the OpenAPI Specification

Like most things in tech these days, an API-first mindset is supported by low-code development. The OpenAPI Specification or OAS is a language-agnostic conduit for both humans and machines to discover and understand the capabilities of a service without needing access to source code or additional documentation — with the OpenAPI spec, what you see is what you get. As both a technical specification for data exchange and the resulting API written to follow that specification, OAS simplifies describing, producing, consuming, and visualizing APIs.

It’s an important part of customer support and developer experience.

“OAS automates putting your API contract in writing, documenting what your API should do, how it can be used, how it’s expected to behave,” Rao explained. “You’re not just automating the often tedious process of API documentation, you’re setting standards for how your API will be designed and built. And you’re helping any internal or external developer quickly understand how they could leverage your API.”

By standardizing the exchange of data between two web services, it means that APIs become more consumable and adoptable. And this is standardized no matter what language the APIs are written in. This is why leveraging the OpenAPI spec is the first step to building adaptable, reliable, and easy-to-use APIs for your clients. Which means much less time spent onboarding and replying to customer support requests, as your API consumers are happier and more self-sufficient.

OAS becomes the single source of truth necessary to treat your API as a Product. And it creates a common language where not only your internal teams can build on top of your APIs, but it sets you up so that external developers can also innovate atop them.

Define what API-first success looks like

“API-as-a-Product is another opportunity to connect the engineering team to business goals,” Rao said.

Like all things technical, an API-as-a-Product should have both technical and business objectives. The technical goals are often measured first and foremost among API calls, which shows how much interest there is in using the product — the first integration — and how much value it’s providing — repeated use.

The business goals of an API can vary more, but there are three typical API monetization use cases possible:

  • Direct API monetization – This could be charging by API call or by tiered subscription rates.
  • Indirect API monetization – You make it easy for new customers to find you and sign up via an API.
  • Partner API monetization – Salesforce and Zapier are both genius at this, by creating a marketplace or an open API-first ecosystem where you partner with other service providers to increase customer stickiness by creating a seamless workflow.

API monetization can of course only be achieved by leveraging your APIs to get rapid feedback. Then, you need to identify early adopters who you can learn from so you can keep iterating to improve your API design — which being API-first makes it so much easier to do.

“No matter how you approach API monetization, certainly leverage an API management platform to give you visibility, enforceable standards and security, and a place to measure your success.” Rao continued that focusing on an API-first strategy “means gaining view into your full API lifecycle from design all the way to deprecation, across an organization.” This includes external APIs you connect with and rely on.

In the end, teams that embrace this API-first design approach find they are better able to bridge the gap between design and development more easily. And they are more able to adapt more quickly to changing requirements. Your ability to respond fast to changes gives you a competitive advantage. So what are you waiting for?