Flywheel
A self-reinforcing business cycle where each component feeds the next, building momentum over time. Once spinning, the flywheel continues with less effort and accelerates growth.
Used in the Books
This term appears in 4 chapters:
"...ternational revenue: $4B+ annually (2023), paid for migration cost in 4-5 years Network effects: - More hosts → more guests → more hosts (global flywheel) - International travelers use Airbnb globally (book Paris listing from U.S. app, cross-border transactions amplify network) - Local competitors (Wim..."
"...apital was a finance business bolted onto an industrial company. NBC Universal was a media business bolted onto a manufacturing company. There was no flywheel, no reinforcement, no fractal discipline. Worse, GE forced integration that destroyed value. The "One GE" initiative mandated shared services, unifi..."
"...mponent demand, which attracted more component suppliers, which made components cheaper and faster to obtain, which attracted more assembly work. The flywheel spun faster. By 2000, Shenzhen's population had reached 7 million with GDP of $27 billion. The city was becoming an emerging tech hub, no longer jus..."
"...y by city - once density crossed ~30-50 drivers per square mile, wait times dropped enough to attract riders; more riders attracted more drivers; the flywheel accelerated. Standards competitions: VHS vs. Betamax, Blu-ray vs. HD DVD illustrate tipping points in standards battles."
Biological Context
Flywheels parallel positive feedback loops in biology. Successful predators get stronger, hunt more effectively, and grow stronger still. Mutualistic relationships where both partners benefit increasingly over time follow flywheel dynamics. The key is identifying which elements reinforce each other.
Business Application
Amazon's flywheel: lower prices attract customers, more customers attract sellers, more sellers enable lower prices. Each turn accelerates the next. Building a flywheel requires identifying which business activities compound.