Unlocking the potential of API as a product

API as a product. You’ve heard the term. Now it’s time to explore what it means and what an API product mindset could do for your business.

According to the Annual APIs and Integration Report 2022, 98 percent of IT decision-makers view APIs as extremely or very important. Their use across the globe continues to grow, with Enterprise Strategy Group finding that 64 percent of organisations expect most or all of their applications to use APIs within the next two years. 

As part of this growth, an increasing number of businesses are embracing the concept of API as a product. But what precisely does that involve? 

What does API as a product mean?

Quite simply, that your APIs are your company’s products – they aren’t just a vehicle for delivering something but the solutions that you are providing to meet customers’ needs. Creating an API product means bundling together a collection of APIs and resources to deliver a product that is easy for your customers to use, meets their needs and solves their pain points.

This concept positions your API products as business solutions that require a clear consumption and monetisation strategy, based on sound research into customers’ needs and how you will meet those needs better than your competitors’ API products can.

The consistency and security of API management can help here, so excuse us for waving the Tyk flag for just a moment. By using Tyk’s API management to deliver best-in-class, performant APIs using collaborative, API-first design, you’re ideally positioned to focus on meeting your customer’s needs intuitively in a user-friendly way. That’s a great foundation from which to build APIs as products. 

What makes an API a product?

Developing an API as a product (or productising an existing API) means adopting a customer-focused product mindset with certain essential components:

  • Being able to gather user feedback – this is essential if your API is to deliver true, meaningful value to your customers on an ongoing basis, as any good product should
  • API monetisation – you’ll need to consider your pricing, tiers, freemium/premium subscription options and more to ensure that your API products are affordable and deliver value to your customers while also providing the returns you need to stay afloat
  • Developer documentation – an API as a product demands high-quality documentation that supports customers to get the best out of their experience of using your API
  • Self-serve integration – if you make it easy for customers to adopt your API without involving your team, it will be easier for your business to scale faster and to keep costs low as you do so, so it’s essential to bundle together the right APIs and resources to deliver an easy-to-adopt product

What is the difference between an API and an API product?

The key difference between an API and an API product is the level of functionality provided. While an API will enable two applications to communicate with each other, an API product offers additional functionality and access as part of a business solution, as the examples below demonstrate.

Examples of API products

What is an API product? Well, there are countless examples out there. Some of the most well-known and commonly used include:

  • Stripe – around 3.1 million websites use the Stripe API to facilitate payments
  • Google Maps – this API is easy to adopt and use, making it a popular choice for website developers and mobile app developers who need to implement location-based functionality
  • Netflix – according to the Netflix Technology Blog, Netflix’s streaming service is available on over 800 different types of devices, with a top-level API product approach of providing “whatever is best for the Netflix customer.”

How to manage API as a product

Managing APIs as a product means combining first-rate API management with a product mindset, including a strong commitment to customer service. The benefits of Tyk in terms of API management are well established, and you can use our API management solution to benefit from the following:

  • Security, right out of the box
  • More precise code
  • Plugins to support evolving needs
  • Faster time to market
  • The reassurance of security across your API portfolio
  • Lower development and maintenance costs
  • Powerful analytics

All of this underpins an API business model that allows for scaling rapidly and securely – it’s at the heart of our API management solution. That same API management approach also supports the management of your APIs as products, whether you’re building an API product from scratch or productising an existing API.

What you need to add to the mix for winning API product management is a product mindset. This is at the heart of any winning API product strategy. 

How to create a winning API product strategy

If you want your strategy to succeed, it’s time to focus on your customers and place a product mindset at the heart of your business. You’ll need a budget for developing your APIs as products, a roadmap to success and a productization and monetisation plan. In the super-helpful Postman API-First Transformation book, Kin Lane points out:

“Good API products provide a complete API experience, with quality documentation, feedback loops, and support channels that give you the insights you need to iterate upon each new API version, helping to ensure that every release meets the needs of the widest possible audience.”

His sage advice is to keep eight high-level points in mind: 

  • Consumer-centred design, development and operation
  • A meaningful consumer experience
  • Designing for use cases that matter
  • Investing in feedback loops
  • Generating value
  • Gathering and measuring data
  • Being clear on revenue generation
  • Establishing a roadmap and keeping consumers informed about it

These should form an essential part of any API product strategy. An API product manager can also be vital in delivering a winning strategy. 

What is a product mindset? 

A product mindset is all about putting your customers first. Specifically, focusing on the value that your product can deliver to them. In terms of an API as a product business model, that means spending time understanding your customers’ needs and pain points, then focusing on delivering a solution via your API(s).

You’ll also need to focus on the customer experience, ensuring your API is easy to discover and use and delivers a high-quality experience. It should be a product that delights the customer as they discover, adopt, and continue to use it. 

Well-written documentation comes into play here, as the more well-documented your API is, the happier your customers will likely be.

You’ll also need a responsive, knowledgeable customer support function. Supporting your customers to overcome any bumps in the road swiftly and painlessly should work wonders when it comes to avoiding customer churn.

Analytics and observability feed into the product mindset too. If you can monitor your API product in terms of its general health and how users use it, you can take a proactive approach to customer care. You can identify and drill down into issues early to better support your customers. You can also take a top-level view of how your product is used to make better business decisions around growing and evolving it.

The role of an API product manager

An API product manager can be invaluable when it comes to developing a product-led API strategy. The API product manager’s job is to champion the role of APIs as products as part of the organisational vision. They will work with everyone from customers to developers to senior management to ensure that the API as a product mindset is at the heart of the business model. 

An API product manager can also oversee a wide range of practical functions, from API management to monitoring each stage of the API product lifecycle and drilling down into what the product data the API produces reveals.

The role of an API product manager is not without its challenges. The manager must work with a large group of stakeholders, keeping everyone focused on delivering the value the API product’s customers need. Juggling different teams’ priorities, ways of working and roles in delivering value, while keeping everything on budget and on time can be demanding to say the least. This means that outstanding communication skills, the ability to align teams and balance responsibilities, a keen awareness of how to overcome roadblocks and an unwavering commitment to customer service are all essential abilities for an API product manager. 

How to get started with API products

How you get started with your API products will depend on whether you’re creating your APIs from scratch or whether you’re planning to productise an existing API. Either way, you’ll need to pay careful attention to what your customers need and how you can help meet their needs. That means plenty of research and consultation. If you already have existing APIs, you’ll need to drill down into your analytics data to examine how customers are using your APIs and why.

Once you understand what your customers need, it’s time to start building your strategy. You’ll need to consider a wide range of factors, from which API management architectural and deployment patterns you plan to use to which API management product is best placed to support your API lifecycle management. 

With a product mindset cemented at the heart of your business and a strategy in place to develop and grow your API products, practical decisions around tooling, resources, which open source API gateway to use, staffing and everything else should begin to flow naturally, starting you out on your API as a product journey with a strong foundation.

Of course, having a chat with those who’ve been around the block can also work wonders when it comes to gleaning API product management insights. Why not get in touch with Tyk to discuss your plans and tap into the team’s expertise?