Why is API Strategy so Important for Small Businesses – Explanation Guide

Why is API Strategy so Important for Small Businesses, amongst all others, APIs are that piece of technology that has transformed our lives in more ways than we can even imagine.


APIs are the channels that enable any user/seeker of some information to acquire that required piece of information directly from its main source or such databases where it is readily available. 

Too complex? Let’s understand APIs with a classic analogy. There’s a waiter in a restaurant, who takes your order, communicates it to the kitchen, and then as your order is prepared, he brings it to you. So far so good? 

In essence, you’re served with your preference and at your convenience. Now, in our tech world APIs are the waiters for any sort of information you seek.

It pools in every bit of useful data that you, the seeker of such data, are looking for; from vast amounts of its data sources.

Such data sources, otherwise might not be of much significant use to their principal owner. However, since APIs connect the seeker and provider with such ease, every single bit of data becomes a lot more valuable.

APIs can be used by small businesses for an array of operational and logistical activities from invoice generators to inventory management.

It has become increasingly important for successful small businesses to establish and execute efficient API strategies in this dynamic environment, as more and more businesses create, incorporate and innovate in the field of APIs.

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Importance and growth of APIs 

1. Embrace new-technologies 

With the API market gaining traction, small businesses that act swiftly;

  • to create a business-backed plan and monetization model,
  • set up a suitable governance/oversight model,
  • and encourage new technology  

can generate significant new revenue and value sources.

In 2010, Realising this potential of APIs, Stripe entered an over-crowded payments market.

By identifying mobile app developers as the underserved segment of customers, it focused on providing services with a user-friendly interface and operability.

In 2020, Stripe has nearly 20% of the online payments market, and the company is valued at more than $100 billion. One of the mainstays of their success is their relentless commitment to designing their products past the customer’s perspective.

In other words, they created efficient and intuitive interfaces for developers to build applications using APIs and provided the documentation and tools to support them.   

2. API is a PRODUCT, treat it like one! 

When a small firm strategically recognizes APIs as engines for new business channels and new business models to bring in additional income or other such economic utility, it is considered to be leveraging its APIs.

The more user-centric you are when designing your API, the more traction your business portal will gain. However, a lot of APIs were created without thorough consideration or due attention.

An effective API strategy requires a significant time and resource commitment. By allowing manufacturers to track incoming parts and final goods, the logistics management of businesses becomes more efficient.

A prominent example of that is the use and integration of Google Maps with an array of businesses, from small manufacturing businesses like Ekudaan, handicraft jewels to shipping businesses like FedEx. 

3. APIs are here to SAVE YOU TIME! 

APIs give a developer the basic building blocks you’ll need to make a program. It even allows developers to bypass a few steps in the code creation process, saving time and increasing productivity. 

A company that optimized APIs to save time most efficiently was Twilio. It invented a new business model for the app economy.

Why is API Strategy so Important for Small Businesses, aware that application developers wanted low-friction services and global coverage, Twilio became the retailer for service provider wholesale APIs.

By examining different stakeholders (application users, application developers, third-party service providers) and the exchange of value between them, Twilio has identified a gap that can be filled.

fully – by combining and accelerating the services of service providers – for the benefit of all members of the ecosystem.

Principles for API development:

Now that we’ve come around the importance of API development, here are three key development best practices to remember when creating APIs:

  • Set and emphasis on expectations: 

When working with developers, it’s vital to let them know what’s expected of them, when it’s due, and what problems the API feature is supposed to tackle.

  • Alignment of Products and/or Services with APIs: 

It is critical to ensure that the APIs, as well as the goods and/or services to which they allow access, are aligned with the company’s overall aim and operating model.

  • Documentation and support: 

Ascertain that the appropriate tools are in place for the developers’ team to document their progress, address change management, and expose the API’s capabilities. 

Provide them with the resources they need to speed up development and implementation.

Zapier is one such powerful tool on the market that helps you unlock the potential of APIs. It provides a user-friendly interface for configuring automation points between the two services. 

Zapier is simple and elegant. You set up “Zap” to perform automatic actions based on “triggers” and “actions”. A trigger is an event, while the action is an event that ends once the trigger is detected.

For example, you add an event to your Google Calendar and it is posted to a specific channel in your Slack account. 

What Are the Advantages of an API-Driven Strategy for Business? 

APIs that are well-built and powerful are created using software development life cycle approaches. These infrastructures are capable of quickly processing and composing data.

Furthermore, Why is API Strategy so Important for Small Businesses when best practices for API development are followed, they become simple to create, productize, deploy, and alter. 

Salesforce has produced half of its revenue through APIs, according to a Harvard Business Review report, while Expedia.com has generated a stunning 90% in recent years. 

Before creating an API, it’s critical to think about what goes into a good API strategy. Companies that use it will benefit from the following benefits:

  • Modern application architectures, such as cloud services and Internet of Things devices, rely on APIs to enable innovation. 
  • Provide compelling digital experiences — Because APIs allow developers to design solutions for every channel, small businesses can create engaging digital experiences for any audience.


Today’s most agile and successful businesses, from startups to large corporations, use APIs to successfully compete in the marketplace by providing the added benefit of customer enjoyment.

Why is API Strategy so Important for Small Businesses, they even give other systems and applications access to information and capabilities.

APIs give value to a company by allowing it to monetize data assets, comply with new regulations, and encourage innovation by allowing access to business opportunities. 

To summarise, API is rapidly becoming a crucial tool for navigating the digital world. The adoption of API-driven methods is critical as organizations integrate smart technologies into their ecosystem. 

Author Bio

Hetvi works as a Product Associate at Refrens.com – Online Invoice Generator & India’s most powerful platform for freelancer’s growth. She has worked for some renowned companies as a Brand and Digital marketing associate. You can follow Refrens.com on Twitter, LinkedIn, and Instagram.

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