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Monetizing Your APIs – Selling Shovels To Goldminers

Monetizing Your API

Create and monetize your APIs

This is a strategy many solo software entrepreneurs fail to utilize when creating their app portfolio. Often when I do my one on one consultations with app freelancers they describe this beautiful, eloquent ecosystem of software. Web app, mobile app, backend everything is there. They always ask how they can increase their revenue. I in turn always ask them “Have you monetized your API?” The look of shock always lets me know they never thought of it. The fact of the matter is, API monetization can be your most long-tailed stream of app income! If your API service is a critical part of another app, and that app lives on for 20 years, you have a lifetime customer, multiple that by 100 and do the math. APIs are a multi-billion-dollar industry and companies will pay as long as the service works and the data is there!

Why You Should Monetize Your API?

Think about it for a moment. Your API is the powerhouse of your applications. Without it, your product wouldn’t exist in the form it is today. If it solved a business need and there is an opportunity to solve others at a cost, then you should exploit that opportunity. By monetizing your API you can make residual money for your application being the backbone of another application that allows them to make money. While I am a fan of open-source software (I contribute to it daily) I also know that these tech companies make billions off of free software whilst the creators struggle to pay rent! If you have a product that other companies need, make them pay. If you still want to offer it free to hobbyist/solo devs? Rate limit the API and reduce scopes! In fact, a freemium model will ensure you have a consistent audience using your service which helps your overall brand!

Also by making your API accessible you open up your app to use cases you wouldn’t even dream or think of! How you envision your API usage will differ vastly from how your users use your API. These different use cases translates to more residual income for you and your business! This is the power of working smarter and not harder. Just provide the tools that OTHER people need to get their job done and you will have stability in the market. APIs are not as glamourous as the front end, but they can and often do make more money in the long run.

How Do I Sell My API?

When it comes to monetizing and selling access to your API, there are two models: in-app billing, using an API marketplace. In the first model, you would be using something like Stripe to charge either monthly, yearly, or per-use access. Using this model you have more direct control over how much make and charge as well as more flexibility with the use case. The major drawback is that you are responsible for the billing software and tracking usage. The alternative is to use an API marketplace such as RapidAPI. By using an API marketplace you get access to millions of potential customers who are looking for your solution! Honestly, if you are like me and have a much of micro-apis to monetize then putting them for sale on one platform would be less of a headache as well. Ultimately the choice is yours and I advocate you do research to find the best solution for your API and business model. Speaking of APIs, if you are an API developer and you want to have a one-on-one to get the most out of your API business, schedule a time here.

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