On the API developers’ side, there are a lot of known advantages to having an OpenAPI-driven approach. Designing APIs with OpenAPI Specification, or OAS, often enables what’s called a “design-first” perspective, or a design methodology that follows a set contract before coding. Since this lightweight and adaptable description format is widely used in the developer community, OAS-driven development also enhances collaboration and positive developer experience, or DX. That, in turn, increases the chances of turning out a well-designed, profitable, and highly consumer-centric API product to the market.
But using OpenAPI tools for a project is only one part of the equation. In order for your company to truly succeed in the API industry, you have to think of the business side as well. That involves strategies of how to increase usage of your product while earning enough money to make a return on your investment. After you consider using tools like Stoplight OpenAPI to shape your API product, think just as carefully about your business strategy for it. Decide wisely on how to monetize and market your API so that it gets the buzz that it deserves.
Here’s a guide on the business models and monetization methods you can try for your OAS-driven API. Once you’re headed in the right direction, you have a chance at becoming both commercially successful and respected by the wider API community.
Different Business Models You Can Implement for Your Company’s API
When it comes to choosing a business model for an API designed with OAS, there are generally two routes you can take. One involves selling your API product to only one client, and the other involves releasing it to the public. Let’s take a closer look at both scenarios.
Option 1: Exclusive Partner-Only API Model
The first option is to make your OAS-driven API product available to one client and one client only. The value proposition you can make is that your API is designed with OAS exclusively for their usage, and tailor-made for their business goals. The main benefits of choosing this business model are a more controlled data exchange and easy monitoring and maintenance. Aside from selling the actual product, you can earn by upselling additional features or tiers of access to your client.
Option 2: Open Public API Model
The second option is to allow public access and public consumption of your OAS-driven product. You may already have a solid market within the general public, as the open-source OpenAPI technology has a pretty large following. One benefit of choosing this business model is the chance to get a lot of good publicity about your product. Another is that you might see your consumers innovate on your API alongside you. The main monetization strategy for this business model typically involves releasing a “freemium” version, or the most basic version of your core product. Hopefully, your consumers from the general public will like what they see and will be willing to pay for upgrades and increased functionality.
3 Choices for Monetizing Your API
Alongside the two main business models, there are three popular choices for earning money off of OpenAPI-driven products. Your monetization strategy for your API can be based on one of these approaches.
Option 1: Offering Your API on a Freemium Basis and Charging for Added Features
As stated above, you have the choice to release a freemium or basic version of your API. Then, you can offer your intended consumers added features for an extra charge. They can also pay a subscription fee to subscribe to different tiers of functionality for the API.
Option 2: Offering Your API on a Per-Call Basis
A second option is to offer your API on a per-call basis. The most affordable tier will be able to take on a limited number of calls. Consumers can then pay for higher tiers that can accommodate a greater number of calls.
Option 3: Enable a Revenue Sharing Scheme for Use of Your API
The last option is to pursue a revenue sharing scheme for your OAS-driven API. This means that a percentage of the sales made on the client’s API will go to the API developers. This is a method that’s used by some fintech APIs and their partners.
Conclusion: How to Choose the Best Business Model and Monetization Strategy for Your API
One thing’s for certain: you can’t do all of these at the same time for just one OpenAPI-driven product. You’ll need to choose the appropriate business model and monetization scheme based on your business goals and your preferred audience or client base. Some solutions may also demand that your API is ready to scale up. If you aren’t willing to scale up that quickly yet, choose the business strategy that you’re ready for.
You can definitely market your API as being carefully constructed with an OpenAPI-driven approach. That may contribute significantly to its reputation and its overall competitiveness in a hyper-competitive market. But don’t forget to supplement your API craftsmanship with a sound business strategy. Combined, those two things will spell promise for your API.