Times are changing rapidly for developers.
A few years ago, if you wanted to make money with code, you had two solutions. The classical low risk-low reward method was to get a 9–5 job. However, if you wanted more control, the only other way was to go self-employed and take a much higher risk.
This is not the case anymore. As the online ecosystem evolved, more and more companies have realized that they would rather pay to use a properly developed and maintained external solution, instead of developing it internally for hundreds of times the cost.
On the supply side, this had created ample opportunities for developers to turn their tools into fully fleshed out services and charge users based on a subscription fee. Digital channels, such as Twitter or Facebook, were established to sell digital products, making things simpler for coders with an entrepreneurial side. Creating an app from your bedroom has never been easier and the SaaS model (Software as a Service) was thriving.
Thus, starting a business had become an aspiration for many. However, just building an excellent product is not enough. As the product distribution channels had become accessible for everyone, the competition intensified. Coding, devops, product development, sales, marketing, branding: they all require different skill sets. To be successful in a saturated market, all must be extraordinary.
SaaS was built to match the demand of non-technological companies to use advanced software solutions without having to build them. On top of this, developers with intentions to build SaaS products have created a new demand: services for setting up and monetizing their products, allowing the creators to focus on the software.
Enter API marketplaces.
What is an API marketplace?
To be successful as a SaaS business, there are several things one must pay attention to. For instance,
- product development,
- hosting and devops,
- customer support,
- market research,
- pricing and monetization.
This raises the barrier to entry, as doing all of it requires a larger team rather than a few coders. To make it easier, entrepreneurs and hackers noticed two key things that had shifted the balance significantly.
First, most services can be delivered in the form of an API. To give an example, let’s consider an example from finance. If you perform algorithmic trading, you want a magic function which you can call to return the data and perform the quantitative analysis, instead of having to do it on your own from raw data. Or, if you want to do social network analysis on Twitter and gain insights on what is happening, you don’t want to crawl the site to make a database of tweets. Instead, you want direct access to search and analyze the data programmatically.
Second, that there is a need from developers to set up a service quickly without having to worry about all of the above except coding. This led to the rise of API marketplaces, taking care of most burdens for builders. Developers need to focus only on providing the best service possible, without worrying about how to monetize their API.
So, how do these API marketplaces work and what can they provide?
How to monetize your code using an API marketplace
Simply speaking, an API marketplace takes care of two problems: monetization and distribution.
Suppose that you have built your service and have a hosting solution in place. To profit from your code, you would have to implement a solution to authenticate users and accept payments for subscriptions. However, the less code you write, the less you have to maintain, so you have more time to focus on the product.
API marketplaces such as RapidAPI takes care of this. For instance, there you can register your API and set up a payment plan easily. Users call your API through RapidAPI, who is responsible for authentication.
For the users, calling your service is as simple as possible. An API key is issued upon subscription, which is used to authenticate the callers without you having to do any extra work.
To demonstrate how simple this is for the users, here is an example code snippet, straight from the documentation of Dark Sky, one of the weather forecasting APIs at RapidAPI.
Also, your service is listed in the marketplace, so it is searchable and discoverable by potential users.
On the flip side, RapidAPI charges a 20% fee on all payments made through it. This should be taken into account when working out the pricing plan, especially because you also have to cover the hosting costs.
Here are a few additional case studies and hands-on tutorials which will be useful, if you utilize these platforms to make money with your code directly.
The next generation of API marketplaces
Despite the significant improvements API marketplaces provided, things are still not quite there yet. As things stand, the responsibility of working out a hosting solution still lies with the developer. Depending on how much the API needs to scale, this can require serious expertise. (And if the API is successful, it will need scaling.)
Besides, you must pay the hosting fees upfront, even if your application is not successful. In certain cases, for example, when the service requires a running GPU instance, these costs can be significant.
Recently, a new contender has arrived to bring API marketplaces to the next level. Byvalue, an upcoming NoOps platform, promises to streamline the entire process of monetizing your code, without requiring you to work on optimizing hosting and paying any costs upfront.
At the moment, they are in Beta, and they are looking for early adopters to join their community and help build their marketplace. If you are interested in shaping the future of how developers monetize their code, you should definitely check them out!
We live in a time where opportunities are all around us. As the distribution channels of digital products have evolved, making money by building software and selling it as a service was gradually enabled for everyone with coding skills. Delivering services via APIs became a tried and tested business model, for small and large enterprises as well.
Initially, the required technical expertise went far beyond the domain knowledge of the problem to be solved. Deploying and monetizing the product was time-consuming and difficult.
Thus, API marketplaces were created to address this need and do this work for the developer. If you are looking for ways to profit from your code, API marketplaces such as RapidAPI are definitely the way to go.
However, the problem is far from resolved. New startups like Byvalue challenge the current implementations of marketplaces and set out to provide a one stop shop experience for all who want to turn their code into profit.
If you want to diversify your income streams or maybe even go self-employed, offering services via APIs is a great way to go.