I wish OP would dive a bit more into the Stripe example as not-a-marketplace.
There's Spreedly, which at first glance might be more of a marketplace.
But then there's also an argument that Stripe itself is an API-as-a-marketplace, where they support different card providers/types, ACH, and a host of global methods.
Is one interpretation more correct than the other? (at least as it relates to an investment thesis)
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Another example is the Priceline API (and the GDS's before them), which I believe solidly qualify as an API-as-a-Marketplace under this definition.
> Just like a traditional marketplace, an API-as-a-marketplace has two sides: suppliers and buyers.
When I make a payment on a site with stripe (my transaction-in-need-of-payment-processing being the "demand" side), there's not really a pool of "supply side" vendors I'm trying to be matched with... I'm just interested in knowing that my money is going to the business I'm checking out with.
To concoct this into an example that's more of a marketplace:
- the business owner needs a payment processor for people checking out like me -- payment processing is the service
- imagine that transaction fees varied based on the nature of the individual transaction (imagine say an individual <$1 visa transaction is different from a $<1 mc transaction is different from a $1-$10 preferred-vendor visa transaction or something hypothetical like that)
- there's multiple payment processors that offer various fees -- Stripe, Braintree, Paypal, etc.
The marketplace solution now is the one that matches the demand side (a $1-$10 preferred-vendor visa transaction) to the payment processor that makes most sense (supply side) for each individual transaction.
Obviously payment processing works different than this. That's why Stripe is an API, not an API-as-a-marketplace.
Now, replace "payment processing" with "shipping" and "$1-$10 visa transaction" with "1-10lb package going to Somewheretown"... now you have a situation that sounds like the real world. That's the niche the article says Shippo is filling.
There's Spreedly, which at first glance might be more of a marketplace.
But then there's also an argument that Stripe itself is an API-as-a-marketplace, where they support different card providers/types, ACH, and a host of global methods.
Is one interpretation more correct than the other? (at least as it relates to an investment thesis)
---
Another example is the Priceline API (and the GDS's before them), which I believe solidly qualify as an API-as-a-Marketplace under this definition.