API (Application Programming Interface)
An API lets one piece of software talk to another. It's a set of rules and endpoints that define how apps can request data or trigger actions from a service.
What is an API? Explained for Founders
Think of an API as a waiter in a restaurant. You (the user) tell the waiter (API) what you want. The waiter takes your order to the kitchen (backend server), then brings back your food (data). You never enter the kitchen—you just interact through the API.
Why APIs matter for startups: (1) Integrations: Your product can connect to Stripe, Slack, Google, etc. without building payment/messaging/calendar from scratch. (2) Ecosystem: Other developers can build on top of your platform (Shopify's app store, Twilio's integrations). (3) Automation: Users can connect your tool to Zapier, Make, n8n. (4) Mobile/web separation: One backend API powers both iOS app and web app.
REST vs. GraphQL: REST is the standard—simple, predictable, widely supported. GraphQL lets clients request exactly the data they need (reduces over-fetching). Most startups should start with REST unless they have complex data requirements.
API-first companies: Stripe, Twilio, Plaid, Algolia—the API IS the product. Developers integrate via code, not a UI. This enables bottom-up adoption (engineers try it without asking permission) and compounds through network effects.
Building an API for your product: (1) Document everything (without docs, no one will use it), (2) Provide SDKs for common languages (Python, JS, Ruby), (3) Rate limit to prevent abuse, (4) Version it (v1, v2) so you can evolve without breaking existing integrations, (5) Monitor usage—API analytics tell you what customers value.
Examples
Stripe's API lets you charge credit cards with 7 lines of code. Google Maps API powers location features in thousands of apps. OpenAI's API gives you GPT access without managing infrastructure.