Back in 2017, we wrote about why websites don’t have APIs. Mainly, that they’re expensive to maintain and opens a company up to all sorts of data security liabilities, especially if the API itself isn’t the core product, as is the case with Twitter and Reddit.
So why then do APIs even exist at all? Like the old adage about free products — if an API is free, you’re the marketing.
You receive free access to a data platform, they gain a channel for people to discover their product.
(Paid APIs are a different case. Unlike free APIs, there is a direct value exchange that should theoretically lead to a viable business model.)
For many high growth tech startups, this is a compelling strategy. Notion released their free API less than a year after raising a massive $275M round in 2021. Slack continues to release developer friendly updates to their free API as marketing for their ever growing integration directory, a core feature of their messaging product.
Let’s be clear — there’s nothing inherently wrong with free-because-marketing APIs. After all, you’re probably using these APIs for similar non-altruistic reasons. The promise of free instant distribution to a huge audience or access to on-demand compute is a tempting draw.
But common power dynamics suggest that you’re eventually likely to be at the losing end of this relationship the moment their marketing spend >> marketing results.
How do you know if building on a free-because-marketing API is the right move for you? There are some obvious considerations, like measuring engineering lift against outcomes and preparing fallback options. Feel free to google that if you want to read AI generated SEO garbage.
Personally, I’d like to focus on one of the most overlooked considerations when deciding to build on an API.
Identifying APIs with a reason to stick around
In my opinion, there are only 3 types of APIs with a reason to stick around.
- Paid APIs, like Stripe, where the API itself is the product you’re paying for
- Product Experience APIs, like Notion and Slack, where your integration directly improves the core product experience
- Non-Profit APIs, like Data.gov, where access is intentionally provided for the public good.
Salesforce, the #1 API on Postman, is a great example of a product experience API that encourages 3rd party developers to improve the product experience with data extensions and workflows. They might have started out as “the cloud CRM” back in the day, but their value proposition today is more accurately summed up as “the CRM connected to everything.” They have a reason to stick around.
Be careful with some product experience APIs sharing generous data access. If your integration does not directly improve upon their core product experience, you might be left in the lurch the moment they stop feeling so generous. (RIP Apollo)
In a 2014 conference presentation, Netflix revealed that despite enabling public access to their catalog API, 11 years of public API requests amounted to just one day of private (internal) API requests. While presented as an engineering prioritization problem, the simple truth is that there is simply no justification for a marketing channel whose impact is a mere drop in the bucket. They stopped issuing new API keys and shut down the API entirely by the end of 2014.
A free, for-profit API had no reason to stick around. (Though it did improve the product experience)
You should feel fairly confident building on APIs that pass this “reason to stick around” sniff test. Watch out for those pesky acquisition shutdowns though. Weatherkit is just not the same.
Finally, allow me to plug Diffbot. We’re profitable, and have been around for 12 years now as a dependable platform of paid web data APIs powering everything between market intelligence apps like AlphaSense and consumer apps like Readwise. We have a reason to stick around.
By the way, we also give free access to students, which we reserve the right to pull the plug on if marketing spend >> marketing results. I’m dead serious. Like the title of this post, students are very much the marketing. That’s why we have paid plans for anyone commercially serious about using our APIs.
It’s a great deal for one-off student projects, and we get to share cool projects built with Diffbot (like this one by Julien!). If you make something cool you have my promise we’ll keep your token active at least through your job interviews. We’ll make something work, and not in a u/spez kind of way.