The Ultimate Guide to Monetize your API

Bring your API to the next level and make it profitable with Blobr's tips and insights.

Alexandre Airvault

The Ultimate Guide to Monetize your API

Bring your API to the next level and make it profitable with Blobr's tips and insights.

Alexandre Airvault

How to build and launch API Products?

We have all encountered many different products. A product is a service or item that solves common problems. Let's take the example of a computer mouse. You buy this product because you have an issue: the trackpad on your computer is not convenient enough. You would like to be able to point, move, select, etc. faster.

We’ve already defined what an API Product is. But let’s go further and break down the term to see what it really implies.

An API is a way to communicate between different software services. But building APIs is more than accepting requests and returning some responses to users.

An "API product" therefore implies that the API is not just the means of providing data, but the "product" itself. A successful API product is supposed to either solve a problem or provide you with the tool to easily solve it.

An API product is easy to test, easy to understand, easy to use. Some famous API product examples:

  • Stripe
    They offer a payment processing platform that enables business transactions through APIs.
  • Twilio
    They provide a customer engagement platform to help companies create meaningful moments with their customers across channels.

That being said, we can summarize with the following:

APIs are: asset-oriented, project-oriented because you build whatever is asked, based on monolithic systems. In contrast, API Products are: customer-oriented, product-oriented because you build something to answer a defined problem, based on microservices.

But does this mean your API must be at the core of your business to be an “API Product”? Not necessarily. It just means your API needs to be treated like a “real” product.

An example of an excellent API treated as a product, even if the company’s main product is not the API: the Twitter API. The Twitter API includes a wide range of endpoints but is somehow use-case oriented, and has been thought of to be as user-friendly as possible. To be effective, the API must be a product that creates long-term value.

Now here are what we recommend you to take to create a successful API product, regardless of the industry.

API Product Strategy & Planning

That step is crucial. First, it is important that you identify the business goals. When you have an idea for an API product, you can test your idea by having a look at different platforms. It is very helpful to learn about other API Products and how companies are meeting customer needs.

  • Product Hunt is great way to introduce new products to a wide audience. As an API Provider, this is also a great source for finding out what people are interested in and how they respond to API product offerings.
  • AppSumo is another way to introduce your product to the world, once more developed. Like Product Hunt, it's also a useful place to see how potential competitors are talking about themselves, and the traction they get.
  • You can also type in some keywords directly into Google based on the type of API product you have in mind and look at what is presented to you.

Once you have enough knowledge about user preferences and requirements, you can identify technology capabilities and plan resources. You will also need to agree on a budget and timeline.

At that step, you also need to think of the API Product pricing model, based on what you have in mind for the product first version. Of course, you will still be able to iterate on that part once the product is available out there on the market. You have different business models that you could choose from. For indirect monetization options, you can have a look at this monetization guide.

“Obviously, it requires a lot of time, resources and funding to get there. So we had the idea of taking functionalities that we've developed, the IPs and datasets we have, the models we've created. And release it as an API product, to spread it to a very diverse set of users and use cases, and start to understand: Where does this stuff apply? How are people using it? How do they want to use it?"
Chris Fry
Founder and CEO at Hyperspect. Read customer story

API Product Design

Once you've created a few mockups of your ideal API product, you want to make sure you're providing a great experience for your users.

To do this, consider scenarios and customer personas. Having some product assumptions can also help you and allow you to test them later.

Example 1
I believe that offering a free tier of my API Product (1000 requests) while providing a customer-oriented interactive documentation will result in 5% of users converting to the first tier in the first 30 days from the first day of their trial.

Example 2
I believe that offering a free trial of API Product (100 requests) and then a pay-as-you-go model will result in 10% of users converting to paid customers in the first 15 days from the first day of their trial. Indeed, they will be able to test and then to pay a fair price, linked to their real consumption.

In parallel, we also advise you to choose the KPIs you will want to track at this stage. What are the quantifiable measures of success for the API product you are launching?

Examples of Audience Journey Metrics:

  • Number of API calls made over time
  • Time to the first call

Examples of Business Goal Metrics:

  • Tons of CO2 compensated
  • Increase in MRR

API Product Development

In this phase, you will consider architecture, technique, languages, etc.

You may decide to implement the API as a monolithic application. It will be simple and inexpensive.

You may decide to build the API as a serverless application and host it on a cloud platform. Platforms have a wide variety of offerings that can be combined with each other. They will be interesting to use to build complicated products. Yet, they will require more time and skilled resources.

It can be difficult to make a decision. We advise you to take a look at different resources to do so. Here is an interesting article.

API Product Testing

Like any product you are about to launch, you need to perform tests, to ensure that you will provide the best possible experience to your users. This includes performance testing, security testing, product testing, etc.

A qualified profile should take care of this step to ensure that the product is ready to be launched.

API Product Deployment & Launch

The MVP has been validated. The API product should be launched in an environment where users can use it. What we recommend here is to launch the API product on your own developer portal so that you retain control of the relationship with your end users and can learn from them as you grow. Such a platform will also help you provide the best possible user experience. Such a platform has proven to be effective for API providers.

You will also need to identify the right marketing channels, tools, platforms to be able to promote your product. Among those we recommend: LinkedIn, Youtube, relevant developer, API, tech communities (they can be on Slack or Discord for example), meetups, podcasts, newsletters etc. Initially, your marketing efforts should focus on a few channels and then they should grow as you find the fit between your product and your market and you know who your customers are.

API Product Validation & Monitoring

Right now, the objective is to find the product/ market fit in order to grow the product. You will be able to validate your hypotheses, identify patterns etc.

Make sure someone is responsible for tracking the key performance indicators you have defined. Depending on the outcome, you will need to iterate and take action.

At this stage, it is also recommended that you gather feedback on the quality and value of your API products. Are your API users satisfied with the product, its documentation, and the way they consume it?

Now that you know the main steps to take to create and launch an API product, keep in mind that the most important thing you need to focus on is the user experience. On the other side of the screen, users are reading your documentation, interacting with your API product, and trying to understand if your product can meet their business needs. You want to make sure they can get all the answers to their questions.

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