APIs: The Digital Handshake

APIs-The-Digital-Handshake-lgAs software munches it way through our world, underpinning every modern businessperson’s handshake is an API call. This approach will leave no industry untouched. It is inevitable because once the integrations are written and paid for, given the cost of raw computing power is being driven relentlessly down and the skill set to implement the integrations remains relatively fixed, scaling up to incredibly high transaction volumes becomes essentially free. The cost savings with this approach are well-documented and market-driven forces will eventually push all industries to realize the advantages. For an example, think of Lyft. At its core, it uses technology to scale the connection between a driver and a passenger. By leveraging software instead of a human to be the dispatcher, they realize huge gains in efficiency and quality of service, and though the full extent remains to be seen, they should eventually be able to pass along the economic benefits to those most directly involved in the transaction, namely the driver and the passenger.

Another way to think of how business gets done in this API Economy is to adopt a technical term, the “two-phase commit.” Phase one is the commit-request phase. It’s fulfilled by people who find a business partner (or consumer) for a service, align the pieces and sign the necessary agreements. In phase two, the actual commit phase, the implementation of the massively scalable solution is delivered and you’re off and running. The classic premium attributes of speed, quality, and cost are optimized for in this workflow and assuming all else is equal, the marketplace picks the best implementation with the highest return on investment. That’s how it’s designed to work in theory at least.

Because there are significant advantages to being the fastest, smartest mover in such an environment, you would expect to see some mistakes made in the haste to get a deal done first… and you do. On both the technical & business sides, we ultimately must make choices, and mistakes were, are, and will continue to be made. We’re human.

These however stand out as exceptions to the runaway successes of examples such as Apple’s app store, Amazon Web Services, Google’s Maps API, and most broadly, the API Economy as a whole. Because the financial advantage of retooling an already existing integration is small, especially relative to the technical costs, being first with a working one is a huge advantage. Just make sure it benefits both parties long enough to make it profitable for each, lest the weakest link in the value chain break the driving force between the engine and the wheels.

Speaking of value, let’s explore that a little further. Beyond the touchy-feely aspects, fostering an environment of mutual respect, in both our personal and technological relationships, makes good business sense. It leads to more stable platforms upon which we, and those who follow us, can build. It is also one of the reasons why I love working with Demandbase’s APIs — because they’re the entry point for so many long-term partnerships that ideally evolve beyond the initial technologies and relationships that they began with. They can also lead to lasting friendships. This ability to deliver on that initial promise inherent in a handshake, the ability to help evolve how business is transacted and automated, how drudgery can be removed, all with the ultimate goal of creating happy customers who get meaningful results from what we do is one of the favorite things about my job here. Anyway, enough digressing. As you might imagine, I’m always up for chatting, so feel free to follow me on Twitter and I look forward to working with all of you when it’s time for us to leverage one another’s APIs (in coordination with my business development, management or sales team colleagues.) Until such time, Happy Holidays!