API Business Models

What does an API Product Manager do?

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Emily Canon is an API product manager at PEXA, a digital property settlement platform for e-conveyancing or transactional property across Australia and now in the UK. In this article, Emily shares her insights around the role of an API product manager, particularly discussing how customer-centricity and product management practices can be applied to API products.

We are now viewing APIs as products. That means we are applying product management practices to ensure that the APIs we build hold mutual value for our customers and, in turn, for us. So why have a customer-centric approach for APIs? Well, just like with any other product, customer centricity enables you to produce products that your customers want, and need, which gives you more options to monetize potentially or to provide additional value back to your core product by offering these APIs as a connective tissue, so that customers can seamlessly interact with your product in their digital channel of choice. Organizations can have noble ambitions with APIs, with the acceleration of API development in the last couple of years, largely due to the pandemic. But in reality, the last thing you want to do is produce APIs that have no customer and that sit untouched. So, to ensure that this path isn’t taken, customer centricity and product management allow you to build products your customers want and, in turn, provide value to your organization.

So, from this perspective, API should undergo the same rigors as front-end products, with the product manager leading the way. The API product manager represents the customer’s voice, advocating for the customer and determining the market fit of the APIs for the broad customer base. That could be through research, data, insights, personas, journey mapping, or interviews. But it is the role of the API product manager to ensure that the APIs your organization is building are wanted or needed, appealing to your broad customer base, and in alignment with your business goals and strategic direction.

You can’t talk about customer centricity without understanding who your customer is, and with APIs, the immediate answer that comes to mind is developers. They are your primary API customer. As an API product manager, it’s your role to advocate for them, work toward giving them a frictionless onboarding experience, and give them APIs that are easy to use, have immaculate documentation, and are seen as valuable. But I go one step further than this to say that depending on your type of business, API customers could also include business managers, whether business product managers, business process managers, or operation managers, as sometimes they can be the decision-makers around whether or not to use your APIs.

A great way to understand who your customer is is through customer personas or archetypes. Personas and archetypes allow you to group your customers by characteristics or behaviors, which bring them to life, empathize with them, and understand their goals and mindsets. By employing this design thinking practice, we can get one step closer to our customers to understand them. The research techniques to develop personas or archetypes for front-end products are very much the same for APIs. We’re demystifying APIs as purely a technology capability; instead, we’re viewing them as a product. We’re applying product management principles, such as interviews or observations, to develop personas.

In our case, we wanted to develop a set of customer archetypes. We went through the process of defining a set of research questions. We set up some interviews with customer stakeholders, from developers who are the primary users of the API, some business managers who have made decisions on whether or not to use them, and also business analysts who are sometimes the first point of contact in using or looking at your API for the implementation. Importantly, at the end of that process, we understood that we had five different customer archetypes, not just the developer, as is the common school of thought, not taking away from the fact that they are the primary API customer. But there are others we need to consider to make our API product strategy and our go-to-market strategy successful.

This brings us to API product strategy, which is a core element of the role of an API product manager. Here, customer centricity and product management come together, enabling us to form a strategy for bringing value for our customers and our business in alignment with our business goals and strategic direction. With APIs, there can be a tendency to take an internal-out view and to reflect on what data or functionality we as an organization have that can be developed into an API and then externalization or monetization. The problem with that internal-out perspective is that it doesn’t necessarily always equate to meaning or value for your customers. It could lead you down that path of developing APIs that sit untouched. So instead, you need to shift your focus, bring it back to customer-centricity, and start with the question, how can we create value? It all comes down to research and feedback to formulate an evidence-based strategy.

What does that look like in practice? If I receive feedback about my APIs, I treat it as gold. I take every opportunity to go on-site with customers to have meetings with customers to hear from them directly. I work closely with my customer success teams to stay extremely close to our customers. I run surveys and interviews and stay across the API data usage. I also have a product board where I centralize all of these inputs to give me easy access to enable me to strategize and prioritize more effectively. Human engagement and interaction are critical in eliciting quality feedback, so have workshops with your customers and ask them questions to understand pain points, inefficiencies, interests, etc.

Another important process is to understand the customer use cases for how they’re using your APIs. Sometimes customers have used our APIs in a way not necessarily how we initially had imagined. This is important, as it enables you to continue to evolve your product strategy based on real usage. I guess the success of an API product is to become a seamless and critical piece in many different customer experiences and ecosystems.

For your software development lifecycle, it’s not just the API product strategy where customer feedback is critical. You should also consider staying customer-centric during the design and delivery of your APIs. Keep your customer at the heart of API discovery, design, and delivery.

API economy has grown significantly in the last couple of years. A Gartner report released this year shows that 80% of surveyed organizations plan on providing publicly exposed APIs in 2022, Compared to 46% in 2019. Your go-to-market strategy is critical for an API to stand out in this API economy. This is about making your APIs discoverable and your onboarding experience frictionless. Quality documentation is central to this. When customers start using your APIs, they want as much self-service capability as possible. They don’t want to have to ask you questions about what this means or how to do this. Giving your customers immaculate documentation will ultimately lead to higher customer conversion. An API developer portal is also critical as a central access point for your APIs for customers. Understanding the friction points in our API onboarding experience is required. To do this, we use a product management technique of customer journey mapping, where we speak with our customers and understand their end-to-end journey. We understood their painful moments, the friction points they felt, the frustrating moments, and the delightful moments, which gave us feedback to continue improving. It is part of the role of an API product manager to coordinate and collaborate with marketing and sales to achieve greater customer adoption of your APIs and to work towards a frictionless developer portal experience.

Measuring your APIs is another important element of the role of an API product manager. Finding the right business metrics can be challenging. There’s a tendency to focus on the operational metrics for APIs, like error rates or requests per minute. They are simpler to measure. It is also important to measure your APIs from a business perspective. If you have direct monetization, you can track the incremental value the API brings to your business. You can track the new channel enablement your APIs have brought to your business. You can track the revenue or the transactions that have flowed through your APIs. You can also look at the number of partners using your API and the value of those partners to your business. Suppose you want to look at it from a customer perspective. In that case, as an example, you could understand the time savings and efficiency gains that your API has provided to your customers through activity automation. You could potentially overlay a monetary value on that. Depending on your API maturity, customer retention is an interesting business metric that measures retention for customers who use your APIs instead of your web channels. The assumption is that the personalization, customization, and ability to weave your API into their workflow or digital experience seamlessly has provided a compelling retention strategy.

To conclude, APIs can open new business opportunities if we approach them through a customer-centric mindset. Product management practices, allow you to keep customer focus, and ultimately provide APIs that hold value for your business, and your customer.

  • Firstly, use product management techniques like personas to understand who is your customer, what their drivers are.
  • Secondly, research and feedback are critical to developing an evidence-based API product strategy that always welcomes human interaction as part of this.
  • Thirdly, work on offering a frictionless onboarding experience as part of your go-to-market strategy and tailor your go-to-market strategy to suit your customer types.
  • Lastly, measure and track your APIs to understand their business value and impact, as that allows you to truly understand the success of your product strategy and continue to evolve your product strategy.
Emily Canon
Customer-centric API Product Manager, passionate about creating frictionless digital experiences while generating customer and business value. Excels in Product Strategy, and is driven to meaningfully solve customer painpoints and problems, while building commercially successful digital products. Exceptional communication skills, adept at building authentic and collaborative relationships with stakeholders and customers. Experienced people leader, motivated by seeing team members grow and excel. Thrives at the intersection between technology, business and customer.

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