Flywheel Effect
"Success builds on success - each turn of the flywheel makes the next turn easier until momentum becomes self-sustaining"
Origin: Jim Collins' Good to Great (2001)
The Key Insight
Flywheels are real, but they're not perpetual motion machines. Every positive feedback loop coexists with negative feedback that eventually dominates. The strategic question is: what could reverse your flywheel, and how do you prevent it?
What People Think
Build a self-reinforcing cycle where each component strengthens the others. Amazon's flywheel: lower prices → more customers → more sellers → more volume → lower costs → lower prices.
The Deeper Truth
This is positive feedback loops - the same dynamics that drive exponential growth, network effects, and ecological tipping points. In biology, these are autocatalytic cycles where products of a reaction catalyze their own production. But biology also shows that all positive feedback loops eventually hit constraints and either stabilize (homeostasis) or collapse (boom-bust).
Biological Parallel
Ecosystem succession shows flywheel dynamics: pioneer species improve soil → more species can grow → more organic matter → richer soil → more species. Coral reefs show it: coral creates structure → structure attracts fish → fish waste fertilizes coral → more coral. But these flywheels can also run in reverse: reef damage → fewer fish → less fertilization → more damage.
Business Application
Flywheels are real and powerful, but they require: (1) genuine causal connections between components (not just correlation), (2) sufficient initial push to overcome friction, (3) absence of negative feedback that overwhelms the positive loop, and (4) protection from external shocks that can reverse the wheel. Many supposed 'flywheels' are actually just growth - the self-reinforcing dynamic is weaker than assumed.
When It Breaks Down
Flywheels can spin backwards. The same feedback loops that accelerate growth can accelerate decline. Amazon's flywheel depends on customer trust - if that erodes (counterfeits, fake reviews), the wheel can reverse: worse experience → fewer customers → fewer good sellers → worse selection → worse experience. The flywheel metaphor understates how quickly momentum can reverse.