Using someone's API? You don't have a business, THEY do.
Using someone's API? You don't have a business, THEY do.

Whether you're using Adsense, Adwords, Twilio's APIs, Google Maps or Search API, or even Wikipedia's Suggest API to generate traffic and/or revenue, you don't have a business.

You have a website that provides traffic, and potentially revenue, to the provider, and they can terminate or redirect your business at any time, without notice.

Sure, you may have revenue right now, but if you don't re-invest those revenues to build your own dataset to support your requirements, your business WILL go away at some point, or the terms will change in such a way that makes your ability to generate revenue disappear.

No company will guarantee you that the API will be available forever, nor will they guarantee you that they won't deprecate the API, or even just your license, should they decide to compete with you in that space.

Sure, it's okay to build an app using an API provided by someone else, but if you plan on building a business with that functionality, you owe it to yourself, and to your customers, to implement your own version of that API and the supporting data to ensure continued availability after the supplier ultimately turns its sights on your niche.

No, I'm not paranoid. My experience tells me that an API provider, especially a public one, is like a nasty virus. It has to consume more and more of the market, by whatever means necessary, to generate more revenue to satisfy it's stakeholders.

Google is a perfect example of that. It provides marketing services to FourSquare and other check-in services, but then it uses the data they generate using it's services to build and market it's own checkin service, while STILL taking their money for ads.

Don't get me wrong, I don't hold anything against Google for using its market position as it does. It has spent the time and money to get where it is, and FourSquare has the right to use or not use Google services to market itself, and it had to accept Google's terms of usage in order to do so.

That said, Google doesn't build anything that has a dependency on singular external sources, as it expects its users to do with its APIs. If there is a single source, Google buys it or replicates the dataset using it's own means, then positions itself as the primary source for that data.

Take map data. Google didn't have any map data. It licensed and bought its way into the market, and now if you google "maps", Google comes up as the primary source, and there are ZERO ads for that keyword. It used to be that when you typed "maps" into Google search, you'd see ads for Rand/McNally and other map service providers.

Now, they're all gone and only the big online map data providers are atop the natural results, and it's uncommon to see any ads.

Think you can SEO your way to the top of the list in maps? Good luck. It's not happening.

If you're currently in this position, you should be preparing for your business for imminent collapse. Alternatively, you could build or buy your own version of the dataset(s) and/or API(s) you use so that they have no outside dependencies.

If you're an investor, and you're approached by someone using external data sources as a platform for their business, DO NOT invest unless they have a solid plan to buy or build their own version of the dataset(s) or API(s). In fact, I'd suggest making any investment contingent on them doing so.

Just my $0.02 (adjusted for inflation).