Are there any solo devs or small teams out there genuinely paying their rent from selling API access?
What's your API? How much MRR? What's your pricing model? How did you find your first paying customers? And most importantly - what problem are you solving that people will actually pay for monthly?
Bonus points if you can share: - Your biggest challenge (rate limiting? customer support? competition?) - Whether you'd do it again - Any "I wish I knew this before starting" wisdom
1 is an OCR and document extraction service [0]. We started with three customers asking for the same services and found none that were really useful (and supported Chinese characters) on the market at that time. Lately the product pivoted to based on (fine-tuned) LLM/VLMs and focus on adding various features that LLM out of the box are missing (fine tune based on specific customers data, prompt tune for particular type of elements e.g. Checkboxes, split 100s pages of PDF into dozens of documents with a few pages)
We're at around 55k MRR, the price model is per page, and we sign annual contracts with most clients (with some discounts)
2nd is an open-source CIAM [1]; Around 35k MRR.
We knew nothing about marketing when we started, so we partnered with local GCP/Azure as an ISV to get our first paying customers, which drove us to the more "Corporate" segment of the market.
A huge challenge is obviously how to market the product, but customer support for developers is tough as well -- you have to be developers to provide support for other developers, and sometimes it feels like you're troubleshooting for another dev team.
For example, one time we had a client email us saying they were getting incorrect results from our API suddenly, after many back-and-forth emails, we finally asked if we could do troubleshooting with a video call and share screen -- turns out they were interestingly calling our API via a proxy with cache enabled.
[0] https://formx.ai
[1] https://authgear.com
It turns out that the most effective and easy way for their sales rep to pitch your products to their client is if you have something complementary. For us, this is because they have similar products, so they can propose it to the client if they don't like the native one.
Anyway, this guy was the go to guy for gas customers, and knew the database inside and out. So he created his own company, resigned as a full time employee, waited until the panic had set in properly.
Then he offered consulting services back to the energy company saying he'd take care of any database processing costs, or cloud migration costs or whatever, and moved the customer data for gas customers to his own system. Then he created an API, waited a while more and said he was going away again.... Or he could stay supporting this setup if the energy company agreed to a monthly fee and API usage. Then, as far as I know, he sat back and just watched the money roll in while he automated everything else about the job.
That sounds highly illegal.
The company could have called the bluff and passed on the consulting services.
> Maybe there’s a more charitable way to tell the story.
Yeah, management didn’t give the guy a raise so he quit and he could say no when they came begging.
If there’s anything that went wrong here it was management asking ‘what if we pay him more’ but not asking ‘what if we don’t’.
I’ve considered doing similar for one corp I’ve once worked with. The corp used an obscure hybrid cloud solution, unfortunately, the cloud provider didn’t really understand the corps needs (governance,devex,monitoring) making it impossible to do anything basic without manual action from an administrator. Pretty solvable with a couple of APIs and a few dashboards
The company couldn't even function without that person. Calling that an extortion is quite a leap.
How? The original company could have hired another employee to replace him, instead they entered into a b2b relationship with his company.
I've often considered something similar. I used to support a bunch of apps, where I thought "I could build most of these from scratch and they'd be better than what I'm supporting." Even if my employer didn't find value in them, and hired someone else to support the old junk, other companies would probably buy the new ones.
If the employee deliberately made the IT infrastructure worse, then maybe that would be fraud, but it sounds like he was the main person who was improving it.
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I guess check your employment contracts and whatnot, but it's very common for people to leave a company and start consulting and/or freelancing in the expertise they gained at that company. And it's not too uncommon for former employers to be one of their first clients or get your first clients from relationships associated with your former employer.
All of this assumes you don't burn bridges and have the interpersonal skills, in-demand expertise, luck, timing, and interest in building out a small service-based business.
What am I missing? Can you spell out some boundaries for what you're implying because I must be wildly missing it.
I put it in maintenance mode in 2019, so it's about 99% passive income, as I spend only about an hour or two on maintenance per year.
I'm surprised all my clients haven't switched to LLMs, but maybe I still outdo LLMs on price/accuracy since it's so niche.
I'd like to sell it to someone who wants to do something with it, but it would probably take me 30-40 hours to package everything up to hand off to someone, so I consider just the opportunity cost there to be around $5-10k, and I don't think anyone wants to pay $10k for an API that makes $200/mo.
What I wish I knew: don't use RapidAPI. They charge 20%, they have a terrible interface, and they let customers run up huge charges and walk away without paying anything. I wish I'd just rolled my own simple thing with Paddle.
[0] https://zestfuldata.com/
You get a real job to have health insurance.
Looks like that $200 is just side income, not their main job.
[0] https://mtlynch.io/resurrecting-1/
[1] https://stackoverflow.com/a/52304008/90388
[0]: https://x.com/DmytroKrasun
[1]: https://screenshotone.com
I didn’t consider wrapping any service.
What needed for scraping is a bit different for what needed to screenshot websites.
I need to have full control over my cluster to guarantee the best possible quality.
SEO, social media and other channels. I spent a lot of time on all of that.
docker run -p 3000:3000 browserless/chrome:latest
https://capturekit.dev
If anyone wants to build “turn websites into APIs” and do it really well like OP, feel free to hmu.
Highly experienced full-stack and rust developer with experience at startups, G and Google X.
I don't think I'm authorized to share any of the specifics, so will keep it generic.
The API is a world-class machine learning model for a specific scenario. There's a public price list, and various customers manage to negotiate various discounts.
Our biggest challenge is that Google Lens (while much worse than us for our specific domain) is becoming good enough for the average potential customer.
I think one of the regrets is only doing the ML API and not the end-user apps. It turns out the people creating the front end pocket most of the money.
Well, yes. They're solving a pain-point for the paying customer. You're solving a pain-point for someone who is solving a pain-point for the paying customer.
You're one (or more) degree's removed from the source of the revenue.
I'm curious why this is not preferable? You can focus on your core competency and I imagine you have enough apps using your API that it more than makes up for getting only a small slice of revenue from each.
Would you be able to elaborate on this? I don't fully understand this statement.
You set API pricing at 1.5 cents per image analysis.
Another company creates an Android hotdog/not-hotdog app. They price it at $5/month. Each app user does an average of 60 food queries per month.
You get 60 API calls = $0.9 revenue. Let's say half of that gets used for compute costs. You're left with $0.45/month profit per user.
The company that made the frontend around your API gets ($5 - 30% app store cut - $0.9 your API cut) = $2.6/month profit per user.
> Would you be able to elaborate on this? I don't fully understand this statement.
the economic player with direct contact to the customer "owns" the customer and has a lot of power in negotiation with suppliers. the customer-facing players have the most information about their customers, and can offer adjacent products (want fries with that?)
Uber and Lyft make big money, not their drivers. Amazon and Ebay make big money, not their sellers. McDonalds makes more money than their food suppliers, and franchisees.
The exception is with something like intellectual property, let's use movies as an example. The owners of the content want to sell it widely and will do a variety of distribution deals for different distribution channels. However, if any distribution channel starts taking a big slice of the money pie, the terms of the contract renewal will be changed because without the content they are dead.
I think this generally means you chose too small a market for your API. If the API is 1:1 an app, then sure build the app. But if the API supports a dozen apps which make some money but your API flounders, then I think you never had a chance. The market wasn’t really ever there.
The challenge when exploring this topic: the incentive to stay under the radar. Those succeeding don't have much to gain from sharing details here. Worst case: it could invite competitors into their space.
Communities that thrive on growth (e.g., open-source) tend to share freely, but API businesses, especially ones which are easy to execute, often guard their edge.
A recent finding I had, while not necessarily an API: services which help you 24/7 stream a lenghty video file. YouTube live streams seem to work well for those lofi-types of channels, and there are services which are built to enable autopilot live streams.
At the end of the day, it is about what the customer is willing to pay for.
Back when The Pirate Bay was huge, music was essentially free. But Spotify came along and proved people are ready to pay for something better.
ImageMagick is an open source tool for resizing images etc. But some people successfully build API services or SaaS-services on top of it.
It works because people AND businesses pay for convenience.
What space do you have knowledge of? What pains do people have in that domain that can be solved with tech?
Always start with the problem. And start with an industry you know by heart or customer profile you truly care for.
For me that was software developers. I was that customer myself. I programmed a certain kind of solutions, realized there should be an API for this and built that API.
I know right this very second exactly how I could do a unique twist on my existing business and conservatively make another $1 million a year in profit within 2 years. But I already work 60+ hours a week on this business and I’m making tons of money, and the risk of revealing my secrets to another person to build the new business is simply too high.
Our MRR is ~500 000 EUR and our pricing model is pay-as-you-go (per SMS, per MMS, per phone call minute, per month for virtual mobile phone numbers).
The problem we solve is programmatic access to the mobile networks, specifically in Europe/Sweden.
We got out first paying customers through offline networking: going to hackathons, meetups and poking tech friends to find the first few early adopters.
Which is also our biggest challenge, it is hard to scale an offline based go-to-market method.
It has certainly been a painful struggle to get here and it still feels surreal it works so well.
Very custom contracts and back in 2011 when we started there was no such thing as a virtual mobile phone number.
These days the operators are a bit more aware of the value of A2P (application-to-person) versus P2P which was/is very much on the decline. That also means the operators have capacity built of ready to be used without new investments.
As for our own software, we are mostly a Python based shop. And we use tons of open source. The most heavily used components we replace over time with cusomized software as these are generally fully not suited for our needs.
The true value for our customers is our technical support, our operator conectivity, the robustness of the platform, and lastly the nice REST API with it’s debugging capability.
We basically have full international support these days, but are strongest in Northern Europe.
For instance, if you want a virtual mobile phone number in Sweden that supports both SMS and voice, Twilio can’t provide that but we do.
Plus we have nicer API if you aks me :)
Company name is 46elks. The country code to Sweden is +46 so the name is an hint our service is in the telephony space.
When we launched 3 years ago our differentiator was that we could train both cheaper and faster by running on TPUs, these days GPUs have mostly caught up, and open source models are not as competitive as they once were.
It’s making ~5k/month these days, not bad as we’re no longer actively working on it, but a fraction of what we were doing a year ago.
The main challenge for us was the non-technical part. We built an API-first product because we love the tech and felt it’d allow us to focus on that part. But we still had to do marketing, sales support etc which we didn’t enjoy or excel at.
Now we’re both back in larger companies where we can focus on doing ML. It was satisfying to build a working business from scratch, no regrets, but I’m definitely happier now.