At a high level, we view the API as an extremely leveraged distribution channel for web companies. It helps to think of your application as a utility or building block that when delivered through an API, can help you tap into existing distribution without having to reinvent the wheel. These can take the form of mashups, ‘YOUR APP inside’,‘powered by YOUR APP’ along with many other variations. In any case, the API gives you a scalable way to extend your reach into sectors or vertical markets that may otherwise be inaccessible.

Dave McClure preaches you should "bake your business model into your
API", to which we wholeheartedly agree. However, we also believe you should
bake your API into your business model. In other words, put it on your strategic roadmap from the outset. Not only does this help to vet your application and its market viability early, but it also supports early focus on core functionality rather than adding endless features.

Creating relationships with key strategic partners early on can help bring exposure, as well as clue in the rest of the business community as to the value and potential market opportunities your service can bring them. You should work to identify a target list of partner candidates that represent the most strategic benefit to your company’s mission, i.e.: press, exposure, & network effect. Putting a few partners in place as examples in key sectors will help to drive a more organic business development pipeline.

Tremendous graphic representation of the API ecosystem: