A flywheel is a system where each of the components is an accelerator. Invest in any one of the components and, as the flywheel spins, it benefits all components. The system grows when the flywheel spins. 📝Jim Collins popularized the flywheel concept in 📝Good to Great. [1]
📝Amazon
In the early 90s, 📝Jeff Bezos incubated his initial idea for 📝Amazon, a business that used the internet to offer customers a larger selection of goods at a lower price than competitors. These two facets—greater selection and lower price—are the foundation of Amazon’s leading principle: customer obsession.
What started as a guiding principle of offering the greatest possible selection at the lowest possible price, no matter what, evolved into a larger business model—and mechanism of growth—than Amazon ever realized it had in its early years. This business model is the Amazon flywheel, an economic engine that uses growth and massive scale to improve the customer experience through (again) greater selection and lower cost. Amazon first discovered its magic flywheel model, dubbed internally as The Virtuous Cycle, in their e-commerce business before expanding its mechanics to fulfillment and cloud services. [1]
References
- The Amazon Flywheel: Part 1, samseely.com