The Flywheel Effect — PM Mental Model #2

4 min readMar 7, 2024

To keep things interesting, I am going to randomize the Mental Models I blog about, today we are looking at Product Growth and “the Flywheel effect”. I first came across the subject while reading about the success of the Amazon Marketplace. A flywheel is an old mechanical concept but think of it in terms of riding a bike, at the start, it’s tough to get going. You must push hard on the pedals, and it feels like you can barely move forward but as you keep pedaling momentum kicks in and you get faster and faster with far less additional effort needed to increase each unit of speed, thats the basic idea behind the Flywheel.

Definition:

The flywheel effect is a concept that illustrates that when you align your entire organization and build your products around delivering an exceptional customer experience you can unlock an extraordinary release of energy and momentum accelerating product growth.

Key Components:

Attract: The flywheel effect begins with attracting users to the product through compelling features, marketing efforts, or word-of-mouth referrals. Initial attraction lays the foundation for further engagement and sets the stage for building momentum.

Engage: Once users are attracted to the product, it’s essential to keep them engaged by delivering value and providing a seamless user experience. This involves fostering active usage, encouraging interaction , and addressing user needs and preferences effectively.

Delight: Delighting users with an exceptional experience and exceeding their expectations is crucial for sustaining engagement and fostering loyalty. By consistently delivering delight, whether through innovative features, personalized interactions, or superior customer service, the product will attract more and more users who in turn become advocates for your product extending its reach and influence, accelerating its growth.

Use Case — The Amazon Flywheel in Action

Selection

A potential customer is looking to purchase a book online. They visit the Amazon Marketplace, attracted by its vast selection of books covering many genres and authors. Amazon’s commitment to offering an extensive range of products ensures customers can easily find the book they are looking for no matter whether it’s a bestseller or a niche title. Customers are also attracted to the fact that you not only have access to a bookshop but the ultimate “Everything Store” (Amazon even sell prefabricated homes).

Better Customer Experience

Customers are attracted to Amazon’s focus on customer experience with a seamless checkout process, fast shipping options, and reliable customer service. Amazon’s focus on enhancing the customer experience ensures that customers have a positive and hassle-free shopping experience, increasing their likelihood of returning for future purchases.

Traffic

Impressed by the experience, customers start to tell their friends and family about this online store where you can buy anything and everything. They start to write positive reviews (helped by Amazon’s easy and quick process and prompting). They become advocates for Amazon, generating word-of-mouth referrals, and attracting new customers to Amazon’s platform. Additionally, Amazon’s marketing and partnerships drive further traffic increasing visibility and reach.

Sellers

As Amazon’s customer base continues to grow, more sellers are attracted to the platform to reach a broader audience. Sellers recognize the opportunity to leverage Amazon’s extensive customer base and platform to expand their business. They list their products on Amazon, further enriching the selection available to customers and fueling the flywheel’s momentum.

Lower Cost plus More Selection Equals Better Customer Service

With more sellers and more selection, there is more competition, which leads to lower prices. Amazon also strives to provide additional cost savings for all via investments in technology, logistics, infrastructure, and initiatives like “Fulfilment by Amazon”. Lower costs and more selection led to an even better customer experience leading to a faster flywheel, momentum, exponential growth, and almost unimaginable success.

How do I Build my Flywheel?

There are several steps Product Managers can take to discover and build out their Product Flywheel (we will cover all of these in future blogs):

Understand your Product & Market
Map the Customer Journey
Identify your Key Metrics for Success
Identify Feedback Loops
Experiment & Iterate
Focus on Customer Value
Monitor and Optimize Performance

In conclusion, the flywheel effect serves as a powerful mental model for product managers, offering valuable insights into driving sustained growth and success. By understanding and harnessing the principles of the flywheel effect, product managers can unlock a multitude of benefits. The Flywheel effect empowers product managers to adopt a strategic, customer-centric approach to driving growth and innovation. By embracing this mental model and applying its principles in their product development efforts, product managers can unlock untapped opportunities, propel their products to new heights of success, and ultimately, deliver exceptional value to their customers and stakeholders.