The flywheel effect

The fastest growing businesses have a flywheel that consistently leads to better results. But how do you build such a flywheel for your business?

What is the flywheel effect?

The flywheel effect — developed in Jim Collins’ bestseller Good to Great — builds on small wins, where each achievement fuels the next push.

Momentum doesn’t come from a single push — it’s the steady, disciplined efforts that build on top of each other and accelerate the flywheel. 

Every organization must have its unique flywheel that builds on its strengths.

How to build your flywheel

There are 4 steps that will help you develop a flywheel for your product or organization.

While each step is a challenge in itself, the steps themselves are simple:

• Identify your company's key drivers of success.
• Understand how these drivers connect and reinforce each other.
• Optimize each component of the flywheel.
• Consistently execute and refine your flywheel over time.

An example: Amazon

Here’s one of Amazon's flywheels:

1. Amazon offers lower prices.
2. Lower prices attract more customers.
3. More customers attract more third-party sellers.
4. More sellers expand Amazon’s offering and extend distribution.
5. Revenues grow relative to fixed costs.

👉 And this allows Amazon to offer even lower prices, creating a continuous loop and bringing us back to step 1.
 

Once such a flywheel is turning with enough velocity, growth becomes inevitable. Teams feel the momentum, morale soars, and results amplify. This isn’t just a strategy for financial success — it’s about building a lasting, resilient organization with strong competitive advantages.

Another example: Perdoo

At Perdoo, we've been using the flywheel concept since the early days.

Here’s the main flywheel that we used when we just got started:

1. Work closely with customers through our Coaching services.
2. Working closely with customers helps us create excellent content and improve our product.
3. High-quality content attracts more leads; an improved product creates happy customers.
4. More happy customers help us build social proof (case studies, G2 reviews, etc).
5. More leads and more social proof helps us attract more customers.

👉 And this allows Perdoo to work closely with even more customers, creating a virtuous cycle that brings us back to step 1.

Conclusion

In a world that often glorifies quick wins and overnight success, the flywheel concept offers a refreshing reminder of the power of sustained, intentional progress in a specific direction. One step at a time.
   

P.S. I highly recommend Jim Collins' monograph Turning the flywheel which further expands on the flywheel concept.