Xignite’s product, financial data, is in abundant supply all over the world, so there is little chance of competing based on the raw materials provided. But by using well-designed, developer-friendly APIs as a differentiator, Xignite has built a business with more than 1000 customers that make 15 billion API calls a month. Those who seek to find new markets for their data through APIs or who are creating APIs for an internal audience will likely benefit from the principles that Stephane Dubois, Xignite’s CEO, uses to design his company’s APIs.
For starters, Dubois points out that APIs must be adapted to the use case so that the developer gets all they need in a way that minimizes coding efforts. “This is the reason that all API supermarkets have failed,” said Dubois. “One-inch deep and one mile-wide API catalog are frustrating to developers. They will be used as a last resort, but quickly abandoned if an offering comes along that is adapted to the developer and the type of apps they are building.”
When he founded Xignite in 2006, Dubois found that the financial world had a few APIs that were essentially one-size-fits all and worse still, were built based on assumptions that no longer held.
“The kind of APIs offered were data-centric instead of being developer-centric,” said DuBois. “What some vendors did was simply take their old client/server layers and exposed them as APIs. The result was very cryptic and complex systems not easily usable by external developers.”
But there was another larger assumption about these APIs. Most of them were built for an era where the networks were slower and far more expensive than they are today. The previous generation of APIs often assumed that they application was going to store the data, not ask for it over and over again as needed. APIs need to be designed differently given the dramatic reduction in price for network bandwidth and the ability of the cloud to provide fast access to massive amounts of information.
“You have these massive cloud ecosystems like Amazon Web Services, where literally all the FinTech companies are building their products,” said Dubois. “Our service is there as well. We all benefit from the de facto co-location standard. It means that my customers can treat Xignite data like an on-premise database, and that’s exactly what they do.”
Xignite has always focused on how financial data can be used to power many different types of applications, not just trading systems. For that reason the company has attracted broad categories of clients. The first, which makes up the bulk of Xignite’s business are the new generation of FinTech startups such as Wealthfront, Personal Capital, and Betterment. These firms naturally gravitated to Xignite’s APIs, which were far better suited to building applications than the alternatives.
The second category of companies are the groups within the major financial players who are also building a new generation of applications.
“When we started, we had to adapt our APIs rapidly as we understood what our developers wanted,” said Dubois. “But especially with APIs, you must be careful, you must launch with a strong product and use versioning sparingly.” In other words, you need to run an agile process but make sure that the first phase is done in alpha and beta versions that are not widely distributed. When you publish an API for general availability, it must be baked.
When Xignite started in 2006, the demand for financial APIs was still mostly for the previous generation’s applications. Xignite found itself designing new types of APIs and extensions for every deal. But then a wave of FinTech startups provided a huge boost, and now Dubois feels his APIs are mature and ready to support a broad swath of applications.
“We have 80 percent of what most developers need to build mobile apps, personal finance apps, digital wealth management, and new payment systems,” said Dubois. “They can get the same data from other companies but it is a massive pain to build apps with it. Our core innovation is to see APIs as a user interface for developers. We like to think we bring all the empathy and sensitivity that is common in mobile and web interface designers to the task of API design.”
In other words, Xignite is not a financial data company, but a design company. In my view, anyone building an API must see the world the same way in order to have the best chances of success.