Investor Connect Podcast

Flywheel Effect

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The flywheel concept comes from the industrial world in which a large mechanical flywheel gains momentum from small steps and eventually creates enough momentum to generate its own motion.

In the startup world, the flywheel effect refers to an alternative to the sales funnel by building a growth machine by connecting strategy with incremental steps in building customer loyalty.

Growth comes from satisfied customers who continue to use the product and tell others about it.

The flywheel effect generates exponential growth.

To create the flywheel effect, the startup should seek ideal customers and not just any customer. 

For startup founders choose your customers carefully and leverage them to find more.  

Set up a strategy for acquiring customers, keeping customers, optimizing your profit, and generating new customers from your existing ones.

Use the hedgehog principle which states a company should understand what it can be great at and not just set a goal for it.

Companies achieving greatness most often have a flywheel effect in place. 


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.


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Music courtesy of Bensound.

Direct download: Flywheel_effect.mp3
Category:general -- posted at: 5:00am CST