Flywheel (n): A revolving wheel that is used to increase a machine’s momentum and thereby providing greater stability and continuous motion.
In 2001, Jim Collin introduces the concept of a “Flywheel” in his book, Good to Great.
During the dot com bust in 2000, Amazon was struggling to make a profit. Jeff Bezos met with business legend and author of Good to Great, Jim Collins to seek advice and discuss strategy. This meeting would change the trajectory of Amazon forever. Collins introduced Bezos and his executive team to the concept of a business flywheel.
“Bezos and his lieutenants sketched their own virtuous cycle, which they believed powered their business. It went something like this: lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned, and it should accelerate the loop. Amazon executives were elated; according to several members of the S Team at the time, they felt that, after five years, they finally understood their own business. […] he considered it the secret sauce.” — Brad Stone, The Everything Store, p. 126
In 2014, David Sacks twitter about Uber:
source: https://twitter.com/DavidSacks/status/475073311383105536
In 2016, Matthew Ball wrote a post about Disney
In 2017, Eric Jorgensen wrote a post about Flywheels —The Flywheel Effect - referencing (a likely recently written) post on Uber by Andrew Chen
In 2018, Brian Balfour & Reforge publish a post called “Growth Loops are the New Funnels”
In 2019, Max Olson further explores flywheels, breaking some down into basic system patterns in “Advantage Flywheels”
source: https://futureblind.com/p/advantage-flywheels
In 2019, Kevin Kwok wrote about Superhuman’s “acquisition Loops”. In a another post in 2020, this time about Figma’s evolution, he said:
“Companies are a sequencing of loops. While it’s possible to stumble into an initial core loop that works, the companies that are successful in the long term are the ones that can repeatedly find the next loop. However, this evolution is poorly understood relative to its existential impact on a company’s trajectory. Figma is a prime example of sequencing loops.”
Around the same time, also in 2020, Jake Singer, an ex-Amazon Product Manager, turned Enterepreur started a Substack called “The Flywheel”
In 1957, Disney founder Walt Disney laid out the company’s core strategy in a napkin sketch known as the “Synergy Map.”
