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The value of APIs

The rise of new and dynamic interfaces will require new thinking from internet companies.
The value of APIs
"an animated mechanic from a Studio Ghilbi film" by DALLE

The way we interact with the internet is rapidly evolving. We are seeing a rapid rise of new devices like smart cars, AI-powered assistants, AR glasses, and even VR goggles as new ways to interact with the internet. It will be crucial for internet businesses to adopt an API-first strategy, allowing any developers to create new interfaces bootstrapped on pre-existing business functionality.

A great example of this is Uber, whose value, I'd argue, comes from its matching engine for riders and drivers rather than its interface. We can imagine an API-first version of Uber with an app developed by Uber but an extensible API that enables developers to build interfaces that interact with Uber's matching engine.

Similarly, the core business value of companies like Amazon and Google comes from their marketplace and query results, respectively. We can re-envision each from an API-first perspective, with developers creating their own novel experiences on top of them for every interface, and as the number of necessary interfaces increases, embracing APIs will become increasingly beneficial for organizations and potentially a necessity for startups (who can't cater to each of them).

An API revolution presents an exciting opportunity for motivated developers to compete in providing powerful interfaces. It also enables developers to capture dynamic interfaces like AI chatbots.

There is a lot to think about further. How can core businesses be monetized? What will be the impact on the moats of businesses with core functionalities? What will a central layer of identity and finance even look like? However, it seems inevitable that companies will lean deeper into APIs, given the growing number of interfaces they will need to support.