Determining your company’s API strategy
Reading time: about 8 min
Posted by: Lucid Content Team
APIs are a significant driver today for new business models, channels, and digital products. Knowing how to monetize APIs effectively can help organizations compete and stay ahead. An API strategy is essential if you want to develop a digital ecosystem around your API.
Whether your API is built for internal or external users, here’s how to craft an effective API strategy.
Why are APIs important?
Data exchanges facilitated by APIs are increasingly essential to popular consumer apps, third-party booking and purchasing sites, and other digital use cases your organization might want to leverage your product. Having your own API allows you to start building a digital ecosystem around your software. Even if the API is for internal use only, you may find value in having integration workflows you can reuse for your applications.
Here are some other benefits that you’ll gain from APIs:
- Build partnerships: APIs can be the starting point for mutually beneficial partnerships with other organizations that may integrate your data into other products and services.
- Avoid reinventing the wheel: Internally, you can recycle workflows from one use to another and save resources.
- Provide more value: With your own APIs, you can offer even more value to internal and external customers.
What is API strategy?
Many APIs in the past were poorly designed—ultimately falling short of their full potential for users. API strategy includes the positioning and planning you’ll need to effectively monetize or leverage your APIs. Towards these ends, API strategy often involves building a digital economy around your API with the right platforms, channels, and appeal to the right audiences.
API strategies, in other words, prepare your API for adoption by your audience. It allows you to work in tandem with planning strategic partnerships and connections as well, bringing your API into your business operations.
API strategy helps with:
- Standardizing security and compliance: APIs in the past sometimes represented weak links in application security and performance. A strategy can help prevent and address these issues.
- Treating APIs more like products: No longer merely fun side projects for the development team, today’s APIs thrive with elevation to the product level within your organization.
- Setting standards and expectations: Since consistency is essential, the right API strategy follows accessible standards that are easy for developers to work with. Whether the API is for internal or external use, these standards allow others to meaningfully use your API.
- Managing maintenance and resource use: Over time, having the right strategy empowers you to reduce your API’s total cost of ownership and scale your operations to meet demand.
Key components of a successful API strategy
For an API strategy to be successful, you should break it down into individual components, aligning your organizational culture, building and deploying technology, and fostering your ecosystem. Your strategy should help your API be more competitive and innovative within your market.
Roadmapping your API strategy
First, you’ll need to begin building the business case and prototyping for your API strategy. In this first stage, aligning your team and building understanding are critical.
- Get stakeholders on board: This is your chance to get all your stakeholders involved with identifying potential problems, opportunities, and team member competencies.
- Determine your API’s target audience: Make sure you know who your API is designed for and understand their needs appropriately.
- Check your business models: During this step, you’ll verify that you’re on the right track with your ecosystem and business model planning. Does your API’s business model make sense and fit your business needs?
- Work on user experiences and prototyping: Start defining user journeys and working to make sure you understand them. Create a prototype and visualize workflows with a diagram.
- Create a roadmap: From here, start shaping your roadmap for the API. This is another good place to leverage diagrams, as needed, to picture your API strategy.
- Win over management: Now that you’ve done your homework, you can start taking your roadmapping and preliminary work to upper management if you haven’t already done so. Their buy-in and support is critical for the next phase, when you work on organizational alignment.
Establish your API values and align your organization
Along with your roadmapping, you’ll want to work on culture—your API strategy has a cultural component that engages your organization internally. APIs that will be a significant part of your product ecosystem will likely require more in-depth work within your company. If, for example, your API is for external use and eventual engagement from consumers, then you may need to build a culture around your API strategy.
- Set the tone: Announce your API vision to your broader organization as it’s relevant to them. Make it known and build awareness within your company what your API strategy will mean for the organization.
- Clarify your values: Privacy, security, reliability, and trust are example values that you may elevate within your API strategy and vision. Communicate these values to your stakeholders and within your API strategy.
- Create hiring and training plans: Paying attention to your API strategy’s personnel needs helps you bring the right teams on board and give them the resources they need.
- Choose a product-centered culture: Cultivating a product-centric approach to your API strategy can prepare you to serve the API’s internal and external customers. You can see the opportunities to grow and improve your API.
Build the ecosystem technology
You may already have much of your API’s technical details decided at this point, but there are platform, lifecycle, and other considerations you may still need to cover.
- Look at lifecycle: Where is your API—at the beginning or closer to retirement? If you are building the ecosystem now, your API is probably “younger” and towards the start of the lifecycle. Take into account how established your API ecosystem is and what your business and technical plans are for the rest of the lifecycle.
- Identify essential KPIs: Since you’ll need to track your API strategy’s progress and your API’s performance, consider which KPIs are the most indicative and develop a plan to monitor them. Using a dashboard to visualize your KPIs can be valuable.
- Plan your API architecture: As your API ecosystem grows, you need to be prepared for changes in resource use and performance.
- Choose security best practices: Prevent security from becoming a weakness with your API by deciding which security best practices are best for your unique use case.
Create the community around your API
Unless your audience knows about your API, all of your other work is unlikely to make a difference. Depending on how your API will be used internally and externally, you may need to prepare marketing campaigns, create training and certification plans, develop feedback and support loops, and start looking for strategic partnerships.
- Plan your marketing: Even if you’re just using your API internally, start planning how you’ll market your API to your users. Do you need to create a campaign to get the word out?
- Build a dev portal: A developer portal is essential if you’re after external users and partnerships. Start thinking about how you’ll market to and support third party development.
- Develop training: If applicable, start looking at how you’ll offer training and certification for developers using your API.
- Prepare support: Get ready to offer support and product help for users and developers.
- Look for partnerships: Strategic partnerships are usually cultivated. Work to identify potential partners.
Tips for how to build an API
1. Set specific goals for your API
Diagramming your API allows you to see how your new API ecosystem fits together. Keep your audience and user needs at the forefront and use your goals to guide API creation and strategy. Without goalposts, it’s harder for your organization to build a functional API.
2. Start with pilot projects
Always use prototypes for your APIs, strategies, user experiences, and business models. Get out there a bit with your API and gather real feedback. The sooner you can discover potential problems and opportunities, the better, and the more you’ll save resources.
One strategy you could use is creating a beta version of your API and making it available to developers and team members. These early users can troubleshoot and experiment with the features while you’re still working your way through the steps of developing an API strategy.
3. Build your ecosystem in baby steps
Using an incremental rollout, you can start building access so you can continue monitoring your API and manage any challenges that come up. You can also use this incremental approach with new platform and channel access as well as new partnerships—onboarding just one at a time, if needed, to help you manage any support and performance issues.
Over time, you can use this strategy to develop a full API ecosystem with a larger number of users and partners.
4. Leverage visuals
There are many different parts of your API strategy where you could use visualization to help your team plan, monitor, and build.
5. Roadmap, test, and continuously improve
Your API strategy works best as a living document. Don’t be afraid to revisit portions of your strategy and make changes as you go along.
Create an ecosystem for your API
As your strategy evolves, build on your existing work, celebrating small achievements and leveraging your wins. Your digital ecosystem can make a valuable contribution to your organization’s business goals if you are ready to cultivate an effective API strategy.
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