Embracing APIs to Innovate and Scale Quickly
November 07, 2022

Nitin Prabhu
PayPal

The movie The Social Network perfectly captured the zeitgeist of the tech generation where progressive and creative developers built successful businesses from code up. However, along the way, it was the APIs they built that helped these companies expand exponentially to become some of the world's most influential tech companies today.


While new technologies might be what fuels innovation in the developer community, they depend on API-first approach to support these efforts as that's what allows for quick progress and scalability. API-first is a product and customer-centric approach to developing APIs. It views the role of APIs as discrete products, rather than integrations subsumed within other systems. The overall goal is to produce a set of modular, interoperable APIs that, when combined, create an API platform that fosters innovation.

Today, as many companies look to future-proof themselves and compete successfully in a dominant digital economy, they are looking at their API infrastructure and realizing that it isn't built for developers to efficiently integrate with their products. Rather than rely on a variety of tools from multiple vendors, developers would benefit from a tech platform that offers a supporting API infrastructure for a secure, reliable, customizable, and elegant user experience, all in one place.

Why Prioritize APIs?

Since I started as a developer over 20 years ago, developers have prioritized APIs as they've gained notoriety as the fastest way to integrate a product, and in turn, reach millions of customers. Traditionally when you build a product, you have a sales team, a marketing team and an integration team. With technology, we can flip that model on its head. You can create a product with helpful developer docs in place and then use targeted SEOs to attract the right segment of developers or customers who can then directly integrate your product. With this process, you can instantly eliminate inefficiencies, gain scale and drive cost savings while improving your bottom line so you can invest more in building the product.

What Does It Mean to Be an API-First Organization?

To be an API-first organization, you must take the following steps.

First, the API developer and designer should be included in the product design process from day one. This way they both understand the business problem that needs to be solved and they know what different roles, functions, and features are needed. The developer and designer who is developing the product is very close to the entire lifecycle and they understand the domain very well. The critical piece to this process is they need to be able to look from the outside in. They must decouple themselves from their knowledge of the product and look at it from the lens of a third party whose job is to take your documentation and implement your API in order to solve a real-life problem.

Second, as you start developing the product, organizations need to map out exactly who the end consumer will be. There are third parties and other entities that make the experience more seamless and understandable to these consumers. This is why it is critical to have your API designer and developer along the journey from day one, they can ensure that their APIs are consumable across all platforms by all user levels.

We always discuss consumer testing, product market fit and merchant testing. What people tend to forget about is the developer persona. In the third step, we need to realize that there are different segments of developers. For example, there are freelance developers, no-code and low-code developers and enterprise developers. Each segment has different levels of competencies, technological experience, familiarity and approach to problem solving. For example, freelance developers like to develop a plug-in or a module so that they scale to as many merchants as possible, their API structure will be slightly different than what an enterprise-grade developer wants. Therefore, it is extremely important for organizations to consider all segments of developers from the start.

Lastly, organizations need to consider looking at the entire product life cycle and consider the planned go-to-market tactics. We always think holistically about what the merchant, marketing, and consumer needs are. However, we should be asking what the incentives are that need to be created for third parties to leverage our APIs. We should also think about developers and if we are giving them the right tools, tech stack or the best documentation. And what incentive does the developer have to recommend your products versus a competitor? Data shows that if your organization has an API-first approach, both in the case of freelance and enterprise developers, you have a 34% higher chance of getting your product integrated compared to somebody else's.

At the end of the day, an organization with an API first approach will have positive business impact with increased flexibility, simplification, accelerated time to market and scalability. An API-first culture enables success for both the developers and its respective organization.

Nitin Prabhu is VP, Merchant Experience and Payment Solutions, at PayPal
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