The Three-Legged Stool of API Companies - by Aashay Sanghvi

People use the three-legged a metaphor in various spheres — retirement planning and value investing are two examples. The basic premise is that three dimensions prop up an overarching idea or broader category. Each leg is useless on its own, but together, they provide support and meaning to the concept in question. Recently, I’ve found the three-legged stool as a useful framework to evaluate API-driven business models. Simplistically, infrastructure APIs enable developers to integrate products and services directly into an application, rather than having to build the micro-service themself or wrangle their finance + legal departments to work with a supply of fragmented vendors. These tend to make strong businesses because they have a recurring revenue stream (generally a take rate of transactions or subscription access), don’t require long sales cycles, and have high switching costs as middleware components. There are useful ways to think about other Internet-driven business models (ma

People use the three-legged a metaphor in various spheres — retirement planning and value investing are two examples. The basic premise is that three dimensions prop up an overarching idea or broader category. Each leg is useless on its own, but together, they provide support and meaning to the concept in question. Recently, I’ve found the three-legged stool as a useful framework to evaluate API-driven business models. Simplistically, infrastructure APIs enable developers to integrate products and services directly into an application, rather than having to build the micro-service themself or