One of the most compelling themes of the digital sector over the last 10 years is the rise of the API economy. While the global giants are all well known, the path they traveled created a new way of thinking about business and stands along-side smart mobility as the most disruptive change of the decade.
To mark the end of that decade we asked out readers to tell us about the most predictable and unpredictable, and disruptive changes. These are described in this week’s Cover Story, however, the impact of APIs is worth calling out separately, according to the Which-50 audience.
- Related story: Cover Story: Our readers on the inevitable and thoroughly unpredictable disruptive decade
Stefano Charissis CTO HealthMatch told us he was struck by the “unbundling” of large established platforms, such as Amazon, eBay, Craigslist into smaller competing digital companies.
“They form around a particular vertical of the larger one with the goal of better catering to the specific needs of that user subset. For example, Craigslist ($1B revenue), with ads for rentals and dating, into AirBnB ($2.6B) and Tinder ($0.8B).”
Liz Miller, VP and Principal Analyst at Constellation Research made the logical link to the role of APIs as a business.
“Sorry, but I did not see Uber coming. Not that I didn’t think the travel industry, especially the taxi or ride share/driver industry, was ripe for transformation or disruption,” Miller said.
“But the reality is that while Uber applied its business model to cars – it is still an API business connecting service delivery to service consumers. They could have applied the model to any provider/consumer industry, and others have successfully done so. Airbnb isn’t a hotelier, it is an API that connects properties with space with dwellers/renters who need a place to stay.
“Uber even provides its API to developers to build upon. The rise of the API economy and its numerous incarnations has been fascinating to watch. When you consider that the API marketplace didn’t really take off until 2007, the fact that here we are heading into 2020 with Uber’s revenue hitting $3.166 Billion USD is a pretty big deal for the little API that could.”
And you can draw a direct line between APIs and commoditization says David Higgins, CTO at Rezdy, which claims to be the world’s leading independent SaaS booking and distribution platform for tours, activities, and attractions,
“Everyone wants to focus on the opportunity at hand so when you combine this with the preponderance of APIs, it became a no-brainer that anything that could be commoditised, was commoditised. Now part of creating software is as much how you stitch together these commoditised products to take advantage of your opportunity as it is actually generating unique IP.”
Ros Harvey, CEO of the agtech company The Yield, acknowledges the disruption created the rise of the gig economy off the back of APIs was unexpected 10 years ago.
“What is particularly interesting about these trends is the impact it has had on work. Clearly they have improved consumer choice and satisfaction. The gig economy has given workers flexibility which many value. But there are also social consequences that society has not worked through yet. For example, the gig economy has driven a casualisation of work with less worker and consumer protection.
In the case of housing Airbnb, it has also resulted in a shift to short term rentals over longer-term rentals which has hurt many in our communities, she said. “Technology is not socially neutral. It has impacts on how we live and we get to choose how we shape it. We need to get the balance right in the future of technology creating new business models and opportunities with the potential negative impacts.”