Commentary: Marketplace for APIs

I came across RapidAPI on a a16z blog. RapidAPI in their own words makes it easy to “Find and Connect to any API in the World”. This got me thinking into a new form of marketplace that is about to kick off.

APIs exist to abstract away underlying complexity.

Such complexities can be of various forms:

• Data : Companies own data, and charge for it’s access.
• Service : Companies write awesome code, that is hard to replicate. E.g. Twilio
• Engine : A mix of both Data and Service. e.g. Google Translate has proprietary algorithms that run on valuable data collected over the years.

Developers choose to use a Third Party API when it provides value in either of these complexities. There is no point in calling an API if it does not provide any value.

What value can a marketplace of APIs provide ?

I will try to dig into this question by modeling the role of the marketplace in different forms:

• Facilitator
• Broker
• Coordinator

Facilitator

This model of marketplace of APIs makes it easy for developers to discover APIs. An analogy is Google facilitates the WWW by matching people’s needs to web pages : queries are unstructured requests for information, and they result in web links that satisfy those requests.

For a marketplace of APIs to act as a facilitator is help discover API functionalities that would have been harder to discover by searching on Google / Github.

In my opinion, this role provides very limited economic value.

A marketplace in this case, would just let the developer use the actual APIs without routing traffic through them. ProgrammableWeb is an example of this model.

Broker

This model of marketplace of APIs negotiates how APIs would be used, and adds extra functionalities on top of it.

Examples of extra functionalities can be features like analytics for the underlying API calls, and giving limited access to private APIs.

This role starts providing economic value for both the integrator and the API provider.

A marketplace in this case, would route traffic through its wrapper first before sending it out to the actual Third Party API.

Coordinator

This model of marketplace of APIs would negotiate on both sides : with the integrator of API and the provider of APIs. The marketplace is now a platform where different API providers can work in unison crossing the organizational boundaries.

Examples of such platforms would be, an ecommerce API working together with an Ads API through the platform. The API integrator has the choice of picking their choice of ecommerce API, and an Ads API.

This is the magical moment for a marketplace of APIs, and provides economic & product value for both the integrator and the provider.

I am quite excited by RapidAPI’s mission, and hope that some day they upgrade from being a pure marketplace to becoming a platform for APIs.