# Common Flywheel Patterns

Examples of flywheels across different business types. Use these as inspiration, not templates - your flywheel should be unique to your competitive advantage.

---

## Classic Examples

### Amazon (E-commerce)

```
Lower prices → More customers → More sellers →
Better selection → More volume → Lower costs → Lower prices
```

**Why it works:**
- Lower prices attract customers
- More customers attract sellers
- More sellers improve selection
- More volume enables efficiency
- Efficiency funds lower prices

**Key insight:** Amazon invested heavily in infrastructure (the "lower costs" component) even before it was profitable, betting on the flywheel.

---

### Netflix (Streaming)

```
More subscribers → More revenue → More content investment →
Better content → More subscribers
```

**Extended flywheel:**
```
More viewing data → Better recommendations → Higher engagement →
Lower churn → More subscribers → More data
```

**Why it works:** Two interconnected loops - content quality and personalization - both feed subscriber growth.

---

### Uber (Marketplace)

```
More drivers → Shorter wait times → More riders →
More trips → Higher driver earnings → More drivers
```

**Why it works:** Classic marketplace flywheel where supply and demand reinforce each other.

**Bottleneck history:** Early Uber focused obsessively on driver supply (their bottleneck) with subsidies and incentives.

---

### Salesforce (B2B SaaS)

```
More customers → More data → Better product →
Higher retention → More revenue → More investment → Better product
```

**AppExchange flywheel:**
```
More customers → More developers build apps →
Better ecosystem → Stickier platform → More customers
```

**Why it works:** Platform strategy created a secondary flywheel that strengthens the primary one.

---

## Patterns by Business Type

### Marketplaces

**Basic pattern:**
```
More supply → Better selection/prices → More demand →
More transactions → More supply attracted
```

**Variations:**

| Marketplace Type | Supply | Demand | Connection |
|------------------|--------|--------|------------|
| **E-commerce** | Sellers | Buyers | Selection/prices |
| **Rideshare** | Drivers | Riders | Wait times |
| **Job board** | Employers | Candidates | Match quality |
| **Real estate** | Listings | Buyers | Choice |
| **Food delivery** | Restaurants | Diners | Options/speed |

**Key challenge:** Chicken-and-egg. Must build one side before the other accelerates.

---

### SaaS / Software

**Basic pattern:**
```
More users → More data/feedback → Better product →
More value → More users
```

**Variations:**

| SaaS Type | Data Advantage | Product Improvement |
|-----------|----------------|---------------------|
| **Analytics** | More data → Better benchmarks | Industry insights |
| **CRM** | More usage → Better predictions | AI/ML features |
| **Collaboration** | Network effects → More utility | Integrations |
| **Security** | More threats seen → Better protection | Threat intelligence |

**B2B extension:**
```
More customers → More revenue → More R&D →
Better product → Higher prices/retention → More revenue
```

---

### Content / Media

**Basic pattern:**
```
More creators → More content → More audience →
More monetization → More creators
```

**Variations:**

| Platform Type | Creator Incentive | Audience Value |
|---------------|-------------------|----------------|
| **UGC video** | Ad revenue share | Entertainment |
| **Newsletters** | Subscriptions | Information |
| **Podcasts** | Sponsorships | Education/entertainment |
| **Social** | Influence/reach | Connection |

**Quality variation:**
```
Quality content → Engaged audience → Premium advertisers →
Higher CPMs → Attract better creators → Quality content
```

---

### Consumer Apps

**Basic pattern:**
```
More users → More engagement → More data →
Better personalization → More engagement → More users (via referral)
```

**Network effect variation:**
```
More users → More value per user → Higher retention →
More users (direct network effect)
```

**Examples:**

| App Type | Network Effect | Flywheel Connection |
|----------|----------------|---------------------|
| **Social** | Direct (friends) | Value increases with friends |
| **Messaging** | Direct (contacts) | Utility increases with adoption |
| **Dating** | Indirect (matches) | More users → better matches |
| **Gaming** | Direct (multiplayer) | More players → more fun |

---

### E-commerce / Retail

**Basic pattern:**
```
More traffic → More sales → More reviews →
Better SEO/trust → More traffic
```

**Inventory variation:**
```
More sales → Better demand data → Better inventory →
Fewer stockouts → Higher conversion → More sales
```

**Brand variation:**
```
More customers → More brand recognition → Lower CAC →
More margin → More investment → Better product → More customers
```

---

### Developer Tools / Infrastructure

**Basic pattern:**
```
More developers → More integrations/tools →
Richer ecosystem → More valuable platform → More developers
```

**Open source variation:**
```
More contributors → Better code → More users →
More contributors
```

**Examples:**

| Tool Type | Ecosystem Value | Lock-in |
|-----------|-----------------|---------|
| **Cloud** | Services/integrations | Migration cost |
| **Database** | Tools/expertise | Data gravity |
| **Framework** | Libraries/community | Learning investment |
| **API** | Integrations | Switching cost |

---

## Building Blocks

### Common Components

Use these as building blocks, not complete flywheels:

**Acquisition:**
- Organic traffic
- Word of mouth
- Network invites
- Content/SEO

**Engagement:**
- Usage frequency
- Feature adoption
- Time spent
- Actions taken

**Retention:**
- Habit formation
- Switching cost
- Data lock-in
- Network effects

**Monetization:**
- Conversion rate
- Revenue per user
- Expansion revenue
- Price increases

**Virality:**
- Referrals
- Sharing
- Collaboration invites
- Social proof

### Common Connections

| From | To | Mechanism |
|------|-----|-----------|
| Users | Data | More usage = more signal |
| Data | Product | Insights improve features |
| Product | Users | Better product attracts/retains |
| Users | Network value | Direct network effects |
| Revenue | Product | Investment in R&D |
| Content | Audience | Discovery/engagement |
| Audience | Creators | Monetization/reach |

---

## Anti-Patterns

### Not Actually Flywheels

**Linear funnels:**
```
Marketing → Leads → Sales → Customers (stops)
```
No loop back. This is a funnel, not a flywheel.

**External dependencies:**
```
More funding → More growth → More funding
```
Depends on external capital, not self-reinforcing operations.

**Wishful thinking:**
```
More features → More users → More revenue → More features
```
Often claimed, rarely proven. "More features" doesn't necessarily attract users.

### Weak Flywheels

**Requires constant fuel:**
If the flywheel stops when you stop pushing, you don't have momentum yet.

**No competitive advantage:**
If anyone could copy your flywheel exactly, it's not defensible.

**Single component carries all weight:**
If one component does all the work, the others might be unnecessary.

---

## Customization Questions

When adapting a pattern for your business:

1. **What's unique about your flywheel?**
   - What components would a competitor struggle to replicate?

2. **Where's your unfair advantage?**
   - Which component are you best positioned to dominate?

3. **What's the entry point?**
   - Where do new customers join the loop?

4. **What accelerates it?**
   - Which component, if strengthened, would speed everything up?

5. **What would break it?**
   - Which component is most fragile?
