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How to improve customer experience
What is the Flywheel Effect?
Flywheel Effect: Positive feedback loops that build momentum, increasing the payoff of incremental effort.
When good things you do lead to more good things âjust happeningâ.
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Dissection of the Flywheel Effect
The Flywheel Effect is used to describe a handful of concepts at once, which are rarely split apart:
- Momentum: Flywheels are hard to get moving. If they get moving, they are likely to continue.
- Feedback Loops: The faster the wheel is spinning, the easier it is to add incremental speed.Â
- Compounding Return on Effort: Continuous small inputs add up into an impressive output, eventually.
- Direction: Sustained effort must be focused in one direction in order to maintain momentum and compounding returns.Â
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Network Effects (Demand-side Economies of Scale)
Network Effects and Flywheel Effect are very commonly conflated because they so commonly occur together.
- Network effects almost always lead to or create a Flywheel Effect, but the Flywheel Effect can occur where network effects do not, as weâve seen in the previous examples.
- Network Effects are the most powerful source of the Flywheel Effect.
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How to Push the Flywheel
- Pick the right direction as early as possible: Changes in direction (except small corrections) reset the Flywheel. The earlier you can get moving in the right direction, the sooner the efforts will compound + the momentum will build.
- Focus Efforts: Find the things really moving the Flywheel the most, and focus efforts on those pieces of work. Find ways to eliminate work that doesnât push on those core pieces (like Atlassian), or fold them into current efforts.
- Make Progress Visible.
- Look for additional positive Feedback Loops.
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