The API Economy

The web opened up the digitization of industries and the disintermediation of data. Web 2.0 brought software platforms opening up with APIs to allow integration with each other, with companies opening up an ecosystem of developers to innovate beyond what the developers in the companies could conceive. This allowed companies not to be stuck in their own innovator’s dilemma, and soon, big tech companies began expanding to tech startup ecosystems. In this world came the App Store by Apple, Amazon, Google, and Facebook. Enterprise saw Microsoft developers build out their software stack and SAP, Oracle, Salesforce, and Citrix built customer ecosystems with these APIs. I was involved in the early team opening up payment APIs with PayPal. Soon, a new generation of developers evolved, and they built software with APIs to facilitate information sharing between companies. APIs were licensed like software. Most were open, and this was a healthy way to build upon each other, driven by customer needs and innovations. IFTTT Airtable and Zapier took this to stitch the entire Internet into its canvas. Being open was the spirit of APIs, while a few like Facebook built walled gardens because they thrive on the data economy where they collect our attention and own our data, which they share with their customer as currency to enhance their valuations.