01 Intro
APIs used to be plumbing. Stripe, Twilio, and Plaid showed that being the pipe can out-scale owning the faucet. Now infra startups in payroll, healthcare, and logistics apply the same lesson. Their weapon is a single require statement embedded in someone else's code.
This essay breaks down why API-first is a strategy, how it compounds, and which categories are still up for grabs.
02 Why Invisible Beats Everywhere
• Embed once – win one developer and live inside a workflow
• Scale passively – usage rises, revenue follows
• Signal mastery – a Powered By badge tells customers you value reliability and developer taste
• Stay sticky – no daily logins, no churn; rip-and-replace hurts too much
Every customer effectively resells your API inside their product. Shopify turns each store into a silent Stripe terminal.
03 Patterns of API-First Winners
- Developer-led adoption
Self-serve docs, sandbox keys, generous free tiers. First users are side projects on Hacker News, not procurement teams.
- Usage-based pricing
Charge per call, shipment, or payroll run. Net revenue retention often clears 130% because you only grow when the customer does.
- Coverage as moat
Integrations with legacy systems are the hard part. Each connector compounds defensibility: Plaid's 12k banks, Redox's 80+ EHRs, Shippo's global carriers. Plot the curve and you get an exponential that looks suspiciously like fate.
04 Vertical Cheat Sheet
• Payments – Stripe, Adyen → card processing, payouts → embedded in checkout; compliance handled
• Comms – Twilio, MessageBird → SMS, voice, WhatsApp → direct tie to engagement, SLA lock-in
• Fin-Data – Plaid, Belvo → bank connections → thousands of endpoints no one wants to rebuild
• Payroll / HR – Finch, Check → unified HRIS & payroll data → per-employee pricing, deep workflow hooks
• Healthcare – Redox, Particle → EHR interoperability → regulatory burden plus hospital integrations
• Logistics – Shippo, Project44 → labels, tracking, EDI → physical ops need 99.9% uptime
05 Distribution Without a Sales Team
• Embedded referrals – a fintech adds cross-border payouts; Stripe rides along
• Ecosystem pull – one HRIS signs with Finch; dozens of downstream vendors follow
• Powered-by loops – partners list Shippo in docs; new merchants adopt it by default
Enterprise reps still matter, but only after the technical win.
06 Counter-Arguments and Failure Modes
• Graduation risk – Uber tried to ditch Twilio once the bill hit eight figures. Mitigation: move up-stack (Twilio Flex, Stripe Treasury) and set volume pricing early.
• Slow ramp – usage starts small. You need patient capital or a vast long-tail funnel.
• Commoditisation – pass-through APIs invite price pressure. Moat = breadth, compliance, and unbeatable DX.
What if this is wrong? If integration costs collapse faster than usage grows, vertical SaaS with embedded APIs could capture the margin. Bet accordingly.
07 Where the Next Giants Will Emerge
- High integration tax – legacy systems, regulation, messy endpoints
- Obvious meter – a billable event you can count
- Need for software distribution – teams prefer shipping features over chasing vendor contracts
FHIR pipes in healthcare, emissions accounting, and usage-metered AI inference already tick those boxes. Someone will wrap them in a docs page and become indispensable.
08 Meta-Layer & Brand Control
Invisible infra is powerful, but total invisibility cedes narrative control to the platforms that embed you. The meta-layer lesson: own the function call and the story. Stripe's API reference reads like marketing copy; Twilio's developer evangelism graduates tinkerers into champions. Pipes need brand.
09 Closing Thoughts
Owning pixels was yesterday's playbook. Today's sweeter spot is owning the function call: code that executes thousands of times a day, compounding revenue while someone else's interface hogs the spotlight.
So ask yourself: compete for UI real estate, or become the protocol the pixels rely on?