In 2015 “there’s an API for that” became an oft-repeated phrase, entering the vernacular with the same frequency as the app-based equivalent. Fueling the usage of this phrase is an increasing number of organizations taking their products to market using a SaaS-first (Software-as-a-Service) approach, exposing an Application Programming Interface or API at the core of their offering. This growth has delivered breadth to the API economy, with the majority of industries offering a burgeoning number of APIs fulfilling an ever greater number of use cases.
In the past we’ve covered how areas like IoT, FinTech, eCommerce, sustainability, and others have become more and more programmable. Despite this growth there are doubtless some industries and sectors where APIs are relatively underrepresented, which could be of specific interest to entrepreneurs looking for the next growth market. We’ve taken a look at some of these areas of potential growth to see how they align to gaps in the API economy.
An interesting growth area is cost cutting, with IT Business Edge citing third-party administration and insurance claims adjusting having grown 7.7% between 2011 and 2016 with many insurance companies outsourcing work in an effort to cut costs. APIs could be used in a number of ways in this sector:
- APIs could be used to create a marketplace for such services, allowing freelancers to bid for and win jobs alongside the large corporations;
- They can also serve as an integration mechanism, allowing adjusted claims to be logged and retrieved by any consuming application;
- Finally, APIs have a role to play in the automation and digitization of workflow and processes.
There appears to be few API providers trying to grow a SaaS-first offering in this space. One example of an organization developing their API offering (although not from the SaaS perspective) is the Ability Network, which markets their API toolkit as helping insurance companies who are looking for “more efficient and less costly ways to obtain the data they need”. With some creativity entrepreneurs could expand this approach, providing a platform for claims handling that could integrate with existing insurance toolsets and applications via an API.
Food Data and Analytics
The idea of the connected refrigerator has been kicking around the Internet of Things (IoT) space for the last 20 years, but that does not belie the fact that food data and analytics is a sector in the food industry that is ripe for growth. Inc.com highlights the fact that only 0.14% of a $21.5 trillion global market accounts for the development of “software for food logistics, processing, and retail” (according to research by Frost and Sullivan).
There are many APIs in the food space already, but the majority of these focus on subjects such as online ordering, take out, restaurant guide and recipes; a human being is involved as either the initiator or consumer. Food data and analytics differs in that much of the activity involved is autonomous, helping those working in the kitchen with their activities without having to ask. Some of the uses of APIs for food data and analytics include the following:
- Clearly the self-ordering refrigerator would become a reality, and spawn new conversations between the refrigerator, the foodstuffs inside it, and the supply chain taking place via APIs;
- The autonomous supply chain for the connected refrigerator would undoubtedly lead to the creation of a new marketplace for food where a refrigerator’s shopping list could be sourced from different suppliers at the best price, all facilitated by APIs. Moreover, this has the scope to integrate with many other APIs, such as loyalty and coupons, group buying, reselling or donating surplus foodstuffs, and so on;
- Like the connected refrigerator, the IoT components of the “connected kitchen” would also rely on APIs for inter-communication. Sensors on devices like food processors, scales, and saucepans would have a method for communicating with online recipe books or reacting to different food weights or other conditions that may change cooking times or the proportion of different ingredients.
Many of the protagonists in this space, including companies like Innit, are specifically interested in the kitchen equipment — there is clearly a relationship between these kitchen IoT devices and APIs. However, from a SaaS-first perspective the market leaders will be those that help facilitate the autonomous supply chain, and it remains to be seen who will be first to market in providing such services at scale.
Forbes highlights freight trucking as a major growth area for small business, quoting a 25% increase in sales for the 12 months ending May 31 2015, with speciality haulage such as tankers and refrigeration experiencing growth rates at nearly double those across small business in all industries.
The trucking industry is always looking for cost-cutting measures — whtether it be aerodynamic tire flaps designed to cut wind resistance, or partially self-driving trucks that save fuel economy up to 10% by platooning. But what can data and software contribute?
On first impressions it appears that freight trucking is underrepresented in the API economy: For example, a keyword search on the term “trucking” in the ProgrammableWeb API Directory returns only 18 APIs listed using this phrase. The use cases for APIs in this industry would include the following:
- Acquiring space on partially full trucks;
- Reselling business when demand exceeds capacity (especially important for small businesses who may need to subcontract work a times of peak demand);
- Providing a marketplace for purchasing the best possible rate for shipping good across a range of carriers (either aggregating multiple data sources and surfacing the data with an API or aggregating other APIs).
There are some established products in this industry such as Project 44. Project 44 recognizes the value APIs can bring to the trucking industry and specifically describes their product as an Integration-Platform-as-Service (iPaaS), connecting shippers to carriers via APIs. Entrepreneurs entering this sector could clearly exploit a similar approach, delivering API-based SaaS-first solutions to the market.
The construction of buildings with minimal environmental impact has become one of fastest growing industries in the USA according to Go Banking Rates, which cites a predicted $303 million share of GDP for this sector in the period 2015 to 2018. Whilst “green” APIs are becoming more common, due partly to home automation initiatives that allow external control of heating and lighting systems (for example ThinkEco), APIs related to green building itself appear to be relatively sparse. Their application for green building projects could be significant:
- If governments or regulatory authorities provided services via APIs to approve building proposals (including design and type and quantity of materials) in an automated fashion, this could increase the rate at which green buildings are constructed and lower the barrier to entry. The approval process is typically manual (for example, in the UK a series of inspections and reports is required making it a labor-intensive process) and providing equivalent services wherever possible via APIs would introduce many efficiencies;
- APIs could help provide ongoing incentives to green building owners, with APIs providing the facilities for monitoring the continued “greenness” of buildings in return for tax breaks or similar from the government.
There are of course APIs that provide some of the functionality required to create SaaS-first APIs for green building; for example, Brighter Planet offers an API that allows the consumer to calculate the carbon footprint for a variety of activities. However, to offer a SaaS-first API the provider will clearly need to develop a platform that will facilitate many more aspects of green building.
Home Health Care
Go Banking Rates also highlights home health care as being a fast growing industry, with a predicted annual growth of 2.6% each year in the years to 2022: this is almost certainly a consequence of an aging population, with a predicted 20% of the US population over 65 by 2040. Health care APIs are already experiencing significant growth, but home health care appears to be a niche that is underrepresented. Like green building, APIs could be important facilitators for this industry for a number of uses:
- Access to patient records for a distributed workforce of carers and health professionals will undoubtedly be critical to the growth of home health care. This is especially important for health sectors in countries like the USA where records could be held by multiple providers with many variations (as this map of patient record ownership shows);
- Like earlier examples, a marketplace for caretaker services could be established, fueling an Uber-like culture around sourcing and supplying care staff locally. Dovetailed with this approach is the regulation of staff, with APIs providing the means to perform due diligence and cross-checking of caretaker qualifications.
It stands to reason that governments will drive many APIs in the heath care space (for example the US government’s HealthCare.gov developer portal APIs), but clearly there is space for entrepreneurs to foster innovation through API-based services. Companies like Validic, which provides a platform for connecting patients devices to health care providers are already making inroads with an API-based SaaS-first approach.
There are many industries in the world that are growing rapidly which entrepreneurs will inevitably exploit. The examples we’ve investigated in this post highlight how a SaaS-first approach, fueled through APIs could bring even greater growth to these industries.
It is also important to consider that entering the API economy is a two-way street: APIs will directly benefit the stakeholders of these industries, but they can also bring those industries to new markets, with developers using APIs in innovative ways not conceived by the providers. If APIs fuel the further growth of these industries it will be an exciting time for the API economy as a whole.
What do you feel are important growth areas that APIs have the potential to disrupt? Comment below!
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