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In the last decade the cheap computing available through the cloud has revolutionized the way startups do business. Starting with AWS, the cloud has made it infinitely easier and cheaper for small tech startups to build their product.

Now, according to leading VC Accel Partners, a new trend is driving startup growth: APIs. APIs – or application program interfaces – have become the new version of “picks and shovels” or the internet. If you look at many of the most popular applications, you’ll probably find a number of third party APIs and programs running in the background.

Take Uber for instance. Uber uses APIs to connect to such third party products such as Google Maps, Twilio, Braintree payments and others. No longer do startups have to build everything themselves, but rather can now use APIs to “outsource” some of the nitty-gritty of product building such as mapping or SMS to  outside companies. As you can see from the chart below via Programmable Web, the growth of APIs is massive:

According a recent blog post, Accel partners Rich Wong and Vas Natarajan believe that “today’s fastest-growing startups aren’t just launching great products, they’re launching “composites” – stitching together off-the-shelf APIs with proprietary code, and wrapping it all in a unique brand and design. For anyone moving at startup-speed and building at web-scale, APIs aren’t just a band-aid to the future; they’re a necessary part of the foundation.”

When you think about it, what Wong and Natarajan say is so true, and between APIs and the power of the cloud new startups can really get off the ground with very little capital. Need a big data solution? Microsoft has a highly reviewed Machine Learning API. Need a mapping solution? Google Maps has you covered. Need an SMS solution? Just go to Twilio’s API. The potential power and technology even a small little shop now has access to out there is truly amazing when you think about it!

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