API stands for Application Programming Interface. A geek term which means you can build a system that uses functions from another (through the API).
Google, Digg, Twitter use APIs to stimulate innovation and really open the platform up.
Having an API maximises the potential of your service. Smart on every level: leverage, stimulate innovation, buy out those that work, learn from those that fail…
Arising amongst these purely ‘tech’ services are startups building web platforms that connect the previously unreachable through their online platform. Once they are connected innovation can really happen.
Take Mint.com for example, by working with many different banks across the USA and importing their data into Mint they provide an industry standard. The data is in a centralised location, abides by the same rules and can be opened up.
You see once you have ubiquity across an industry of data abiding the same structured rules you then provide a platform for innovation to happen over the API.
What could you do with Mint transaction data?
Compare spending versus external events (like google news, browsing habits, locality), provide a ‘new’ cashflow management tool, let people check their bank account via twitter or text.
Imagine the possibilities if you can create the same platform model in other industries, a platform for every postshop in the world, connecting all car yards or even every mobile network in the world.
Build a real life business api, open it up, see what happens.