API's: Everything You Need to Know

You may have heard of APIs, but what are they? APIs (application programming interfaces) move information between two different programs. They work like a messenger delivering letters from a post office to your house. They transfer information securely between two different locations.

For example, you’ve probably seen social media share buttons on website articles. These buttons allow you to automatically tweet an article, for example. These buttons are an example of APIs in work. The API moves from the article to Twitter’s tweet interface, enabling you to easily share an article and your thoughts

Why API's Are Necessary

Although APIs are not a new concept, they first started influencing the web in 2000. They immediately changed online businesses. As early as 2002, Jeff Bezos sent a mandate to his employees threatening to fire anyone who didn’t use APIs in their department. Clearly, APIs are essential for businesses—but why the shift in necessity?

APIs offer companies many benefits including automation, personalization, efficiency, amongst others. Additionally, there are 5 important reasons why businesses are choosing to leverage their use: trust, focus, efficiency, communication, and preparation.

APIs Promote Trust

One of the most famous and commonly used APIs is Facebook’s login API. This API allows customers to sign up for a website with their Facebook credentials instead of creating a new account on the site. This is beneficial both for customers and for websites. Because of Facebook’s universal brand, customers may be more comfortable using its login than giving a random website their information. This API helps customers feel safe while also increasing the number of signups for the website.

api's promote trust

API's Improve Communication

APIs can automatically move information between different departments. They can also share information with external developers. This helps to slice the time wasted by communication delays and middlemen. Using effective APIs, any department can access another department’s information. This saves the time spent on emails and calls trying to get answers and clear up confusion between coworkers.

This was Jeff Bezos’ rationale when he issued the Bezos mandate. He knew that departments were communicating inefficiently, and wanted his employees' communication to be more streamlined. That way, they could more easily help each other and external developers.

API's Increase Efficiency

The instant transfer of data enables companies to act quickly without delay. For example, shipping APIs are often used to improve company efficiency. They automatically compare shipping rates across different carriers to display the best prices, validate addresses to ensure packages are delivered to the right locations, and allow for real-time tracking so customers can see where their purchases are at any given time of the day. These services save both the seller and the end customer time and money. Efficiency is improved for everyone.

APIs Prepare Businesses for the Future

As technology keeps changing faster, businesses struggle to forecast what will happen next. It’s predicted that by 2021 there will be more than 11 billion mobile-connected devices in the world. With more and more people accessing information in novel ways, businesses must be prepared to change as customers dictate.

How to Begin Using API's

Although many businesses are eager to use APIs after learning about their benefits, they often don’t know where to start. APIs seem technical and inaccessible. However, using APIs doesn’t have to be difficult. Businesses have two options when obtaining APIs: build or buy.

Building vs. Buying

Both building a custom API and buying an existing API have benefits and drawbacks. Building an API in-house can be more secure—you don’t expose company data to an external developer. Building an API also allows you more control over the final product.

On the other hand, buying an API produces results faster. You often get a better product, one that’s already been tested and found successful. Buying an API is usually much cheaper than building one. Additionally, buying an API saves money down the road as external developers handle updates automatically.

If you’re not sure which option is better for you, you can use Baremetrics’ Build vs. Buy Calculator. This tool helps you decide which strategy would be most effective for your business. You can also search for existing APIs on sites like RapidAPI.com, API For That, and ProgrammableWeb.

Managing Costs

Businesses sometimes worry that APIs will be extremely expensive upfront. However, this often isn’t the case. Many APIs are free or almost free for companies to use. For example, PayPal offers businesses a checkout API that is free to set up (they charge a small percentage fee for each transaction). Many APIs are available at a low monthly subscription rate. More importantly, the return on investment for APIs is generally far higher than initial implementation costs.

APIs are revolutionizing the market and the future, offering businesses enormous benefits. They can help your business become more efficient, flexible, effective, and help prepare your entire organization for the future.

About the author - Ivan Serrano

Ivan is a a social media, personal finance and business journalist from The Bay Area In Northern California.