Dissection of the Flywheel Effect - Deepstash
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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. 
  • 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. 

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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 “just happening”.

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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 we’ve seen in the previous examples.

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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 F...

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The Compounding Effect of Habits

The progress we experience from the compounding effect of any habit isn’t immediately visible. As a result, people give up quickly

They don’t realize that every day they show up they’re building momentum. They are moving closer and closer to a breakthrough or inflection point.

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