API Metrics for Product Managers | API Product Management

Summary

This script discusses the importance of tracking metrics for API success, distinguishing between business and internal APIs. For business APIs, which aim to generate revenue, metrics focus on business performance, growth, and actual API performance. Key metrics include daily usage, revenue per client, and error code breakdowns. Internal APIs, designed to solve internal problems and improve efficiency, prioritize performance metrics like response time and uptime, along with cost reduction metrics. The video invites viewers to contribute additional metrics and engage with the content.

Takeaways

• 📊 API metrics are crucial for tracking the success of APIs and can be categorized into business, growth, and performance metrics.
• 💼 Business APIs aim to generate revenue and grow adoption, focusing on metrics like daily usage, revenue per client (RPO), and top industries using the API.
• 🔍 Performance metrics for APIs include response time, uptime, request breakdowns, error code analysis, and requests per second (RPS) supported by the API.
• 📈 Growth metrics for APIs track adoption trends, new client acquisitions, and revenue changes over time.
• 🏢 Internal APIs are designed to solve internal problems, with a focus on improving efficiency and reducing costs, rather than revenue generation.
• 📉 For internal APIs, key metrics include response time, uptime, and the ability to handle high request volumes, reflecting the importance of reliability and efficiency.
• 🛠 Internal API metrics also consider the cost savings achieved by the API, such as human cost saved per API call and the cost per API call.
• 📝 The script suggests tracking the number of API calls made per day as part of the business metrics for internal APIs, indicating the volume of usage.
• 🔑 Understanding the specific goals of an API, whether business or internal, is essential for determining which metrics to track and prioritize.
• 💡 The script encourages feedback and suggestions for additional metrics to track, highlighting the importance of continuous improvement in API management.

Q & A

What are the key metrics to track for the success of APIs?

The key metrics to track for API success include business performance metrics, growth performance metrics (adoption), and actual performance metrics of the API itself.

How do business APIs differ from internal APIs in terms of goals and metrics?

Business APIs aim to make money by selling the APIs and growing adoption, focusing on metrics like revenue, RPO (Revenue Per Order), and customer industries. Internal APIs aim to solve internal problems, improve efficiency, and reduce costs, focusing on metrics like response time, uptime, and cost savings.

What are the business performance metrics to track for a business API?

For a business API, track daily usage, revenue, RPO (Revenue Per Order), percentage of product revenue from the API, top customers, and top industries consuming the API.

Why is the response time important for the performance metrics of an API?

Response time is crucial for API performance metrics as it directly impacts the user experience and the efficiency of processes that rely on the API.

What does RPO stand for and why is it significant in API metrics?

RPO stands for Revenue Per Order and is significant in API metrics because it helps understand the revenue generated per client, which is essential for prioritizing growth efforts and requirements.

How can the adoption matrix help in tracking the success of an API?

The adoption matrix helps by tracking API calls per day, week, and month to understand trends, new clients or users, and revenue changes, which are all critical for growth initiatives.

What are the performance metrics to consider for an internal API?

For internal APIs, performance metrics include response time, uptime, request per second (RPS), and breakdown of failure scenarios by category.

How do business metrics differ for internal APIs compared to business APIs?

For internal APIs, business metrics focus on reduced costs, such as human cost saved per API call and cost per API call, rather than revenue generation.

Why is uptime a critical metric for internal APIs?

Uptime is critical for internal APIs, especially for systems like order management, as it ensures the API is available 24/7 to support real-time operations without interruptions.

What is the significance of tracking the breakdown of failure scenarios by category for an API?

Tracking the breakdown of failure scenarios by category helps in debugging issues, understanding error patterns, and improving the overall reliability and stability of the API.

How can the metrics for an API help in prioritizing requirements and growth efforts?

Metrics help in prioritizing requirements and growth efforts by providing insights into which customers and industries are using the API most, the revenue it generates, and areas where improvements can lead to higher adoption and efficiency.

Outlines

00:00

📊 API Metrics for Business Success

This paragraph discusses the importance of tracking API metrics for API product managers and business professionals. It differentiates API metrics from platform performance metrics and suggests a high-level list of metrics that are common between APIs and performance platforms. The speaker outlines the need to track business, growth, and actual performance metrics of APIs. Two types of APIs are introduced: business APIs, aimed at generating revenue and growing adoption, and internal APIs, focused on solving internal problems and improving efficiency. The paragraph sets the stage for a detailed exploration of metrics for each API type.

Keywords

💡API

API stands for Application Programming Interface, which is a set of rules and protocols for building and interacting with software applications. In the context of the video, APIs are the central focus, with discussions on how to track their success through various metrics. The video differentiates between business APIs, which are designed to generate revenue, and internal APIs, which aim to solve internal problems and improve efficiency.

💡Metrics

Metrics in the video refer to the quantitative measures used to track the performance and success of APIs. They are crucial for API product managers to understand how well their APIs are doing and to make data-driven decisions. The script discusses different types of metrics such as business, performance, and adoption metrics, each with its own set of indicators relevant to the API's purpose.

💡Business API

A business API, as mentioned in the script, is an external API designed to solve a client problem and generate revenue. The video emphasizes the importance of tracking business metrics for these APIs, such as daily usage, revenue per client, and the industries consuming the API, to understand profitability and prioritize growth efforts.

💡Internal API

Internal APIs are APIs that are built to solve internal problems within an organization, often focusing on improving efficiency and processes. The video script suggests that while business metrics like revenue may not be as relevant for internal APIs, performance metrics and cost reduction become the primary focus.

💡Performance Metrics

Performance metrics are a subset of API metrics that focus on the operational efficiency and reliability of the API. The video discusses the importance of monitoring response time, uptime, and request per second (RPS) for both business and internal APIs. These metrics help in ensuring that the API is robust and can handle the required load, especially for critical systems like order management.

💡Adoption Metrics

Adoption metrics measure how widely an API is being used and accepted by its target audience. The video script explains that for business APIs, tracking daily API calls, new clients, and revenue changes after launching the service are essential to understand the growth and adoption of the API.

💡Revenue Per User (RPU)

RPU, or Revenue Per User, is a business metric that the video script uses to illustrate how much money is being made from each customer using the API. It's a key indicator for business APIs to understand the financial contribution of individual users and to prioritize marketing and growth strategies.

💡Request Per Second (RPS)

Request Per Second is a performance metric that indicates the number of requests an API can handle in a second. The video script uses RPS to discuss the capacity of APIs, especially in the context of business APIs that may have to handle high volumes of requests, such as those scheduling Facebook posts.

💡Uptime

Uptime refers to the percentage of time that an API is operational and available for use. The video script highlights the importance of uptime for both business and internal APIs, as it directly impacts the user experience and the reliability of the services that depend on the API.

💡Error Codes

Error codes are numerical or alphanumeric values returned by an API to indicate that a request has failed for some reason. In the video, understanding the breakdown of error codes is mentioned as a way to debug and improve the performance of APIs, which is crucial for maintaining a high level of service quality.

💡Cost Matrix

The Cost Matrix in the context of the video refers to the financial aspects of running and maintaining APIs, particularly for internal APIs. It includes metrics like human cost saved per API call and the cost per API call, which help organizations understand the financial benefits of using APIs to automate processes and reduce manual labor.

Highlights

API metrics are crucial for tracking the success of APIs, differing from general platform performance metrics.

High-level list of metrics includes business, growth, and actual performance metrics of the API.

Two types of APIs discussed: Business APIs aimed at revenue and customer adoption, and Internal APIs focused on solving internal problems and improving efficiency.

Business APIs are external, solving client problems, while Internal APIs address internal efficiency and processes.

For Business APIs, track business performance metrics such as daily usage, revenue, and average revenue per user (ARPU).

Identify top customers and industries using the API to prioritize growth efforts.

Performance metrics for Business APIs include response time, uptime, and request per second (RPS).

Adoption metrics for Business APIs track API call trends, new client acquisitions, and revenue changes.

Internal APIs focus on performance metrics like response time and uptime, critical for real-time systems.

For Internal APIs, monitor the API's ability to handle high request volumes and breakdown of failure scenarios.

Business metrics for Internal APIs track cost savings and efficiency improvements, not revenue.

Human cost savings per API call and cost per API call are key metrics for Internal APIs.

The number of API calls made per day is a measure of adoption for Internal APIs.

The importance of tracking specific metrics tailored to the type of API and its goals is emphasized.

Invitation for viewers to suggest additional metrics in the comments section for the given API examples.

Encouragement for viewers to like and share the video for further engagement.

Transcripts

if you are an API product manager or

someone who works in the business of

apis you know it's very important for

you to know which metrics to track in

order to track the success of your apis

Now API metrics are a little different

from the performance platform

performance meters but if you look at

the API like a feature you can derive a

high level list of sorts that is common

between both of these so the high level

list would consist of a business for

performance metrics then growth

performance metrics which is the

adoption and also the performance actual

performance metrics of the API itself

now I'm going to walk you through two

different types of apis because the goal

and the metrics for each of these might

be different so the first one is the

business API where the goal is to make

money by selling these apis and growing

the adoption and the second one is the

internal apis the goal here is to solve

an internet problem and improve

efficiency and and maybe the type of

metrics that you need to track here are

the performance and the cost Matrix

right so let's look at each of these in

a little more detail so like I mentioned

earlier there are two types of apis that

we are going to be looking at first is

the business API which is the external

API that is solving a client problem or

an actual problem and the second one is

internal API which is solving an

internal problem with respect to

efficiency and processes the broad

category of Matrix will be same if you

look at specifics metrics are different

for each of these so let's start by

business apis first so business apis are

type of apis that you build in order to

solve a problem now let's take a

hypothetical problem you've built an API

that enables you to schedule Facebook

posts there are three things that you

broadly track in this type of API right

so you track the business performance

and adoption which is the growth Matrix

assume that this is the API that you're

selling to customers so let's look at

business metrics first the goal here is

to understand how much money you're

making and from where you're getting all

of this money right so the daily usage

to see the revenue how much money you're

making per client which is RPO average

revenue per user and what percentage of

product revenue is coming from this API

primarily to understand and prioritize

requirements top three customers using

this API and top three Industries

consuming this API this is primarily to

kind of prioritize your growth efforts

as well so this was about business

Matrix let's look at performance metrics

now so in performance metrics you need

to look at the health of the API per se

so the response time the uptime of the

API breakdown of time taken to hit a

request to Facebook for making a post

versus the time taken by your API the

uptime of the Facebook so you have have

there been down times uh breakdown of

failure scenarios by category so if you

know apis you know there are error codes

so I basically want to understand what's

the breakdown of those error codes then

RPA is supported by the API which is the

request per second and important from a

performance perspective RP is supported

by the source which is Facebook in this

perspective so you need to know what's

the max RP is that Facebook's up and

then let's look at the adoption Matrix

for this API so for adoption you would

want to see how many API calls are

happening per day week and month to know

the trend if the API adoption is

increasing decreasing it Etc a

percentage change in the number of API

calls number of new acquired clients or

users after you launch the service and

percentage change in the revenue after

this API so all of this comes in

adoption Matrix any initiative with

respect to growth is where you track

what you track here so these are three

broad categories for an external or

client facing apis now let's move on to

an internal API where the goal is to

improve the to focus more on the

performance and reduce costs so for

internal performance API let's assume we

built an API to take data from Excel

sheet and post it in nanoms an order

management system now there are two

broad categories that you need to track

here so the adoption may may not be

necessary and might come as a part of

the business itself but the goal here is

the performance that's like the most

important thing when you're working with

an internal API so the response time is

very important because you're tracking

efficiency the uptime of the API is

really important because if it's an

order management system it has to be

real time and ongoing 24 7 then RP is

supported by the API so if there is a

huge bulk of customers that's coming is

the API able to handle that breakdown of

failure scenarios by categories this is

primarily to kind of debug when some

issue happens uh in the API per se and

then there are business metrics uh in

order to track the adoption business of

the API now business not in terms of

Revenue but in terms of reduced costs so

human cost saved per API call and for a

cost per API call and number of Epi

calls made per day so I think broadly

that's it for the Matrix itself if you

have some suggestions with respect to

what other B tricks to be tracked for

the examples we had taken uh please feel

free to add those in the comment section

um if you like the video please consider

dropping a like on this video please

also feel free to share this across with

a friend and I'll see you in the next

one thanks so much