Thinking about "API companies", with a strong group of them in the @ycombinator demo days.

Thread and assessment of some of those companies:

First - a company that has APIs ≠ an API company (at least for this thread).

We're specifically talking about companies whose core product is an API, focusing on offering a simplified service or access to developers.

Organizations that offer a product and expose produced data via API aren't in this definition. Those can certainly add a second way to monetize through an app program, but it's all about core competency.

A bank with an API
An EHR with an API
@Plaid, @stripe, @Redox

I'm also not counting API infrastructure companies. They're selling to the aforementioned "data producers with APIs" and also to the API companies to be named. These companies offer API design, development, hosting, and documentation tools.

@Apigee, @thekonginc, @SwaggerHub

API companies can be broken into three basic categories:

Aggregators
Connectors
Simplifiers

API companies can be one or more of these.

(I'm not tied to these names, so open to comments for better ones)

Aggregators:

Data aggregators use publically available endpoints and frontends to provide a longitudinal view for a given entity, generally the consumer. They're heavy on reading data, but lack capabilities to write back to org

@Plaid, @Yodlee, @mX, @human_api, @1up_health

Aggregator API companies have a relentless focus on breadth and data normalization.

They differentiate by reaching the broadest set of organizations (or a set of organizations that is specific, like investment accounts). @Plaid, @Yodlee, etc all fighting to connect to 100%

Once they have the breadth, they also have to have a relentless focus on data normalization to differentiate. A developer wants an API as a contract. If that contract varies, it's a suboptimal developer experience and some cognitive load.

Simple example: if a transaction API returns 2 years of history from @usbank, but only 1 year from @CapitalOne, there's a burden on the developing app to mitigate that difference.

You know it's an aggregator when the primary value prop is "you don't want to have to do this with 1000s of organizations, do you?" and the trust mechanism for data access is consumer authentication.

To be continued