What is the flywheel effect? The Flywheel Effect is a framework that shows how businesses become great by building a virtuous cycle. Jim Collins defined it in his book Good to Great after he researched patterns of successful companies. In this article, you’ll see how Jeff Bezos’s meeting with Collins shaped Amazon’s fate. And how…
Category: Business Strategy
How To Think In Funnels (And Achieve The Best Possible Outcomes)
Thinking in funnels is a mental model that breaks down your goals into different stages. So you can improve the conversion at each stage to achieve the best possible outcomes. We’ll start with a marketing story from the 1890s to understand how it was born. And finish with how to think in funnels. Let’s go.…
The Law of Diminishing Returns: How To Do More With Less
What is the law of diminishing returns? The law of diminishing returns is a concept from economics that indicates after a certain point, increasing only one input starts producing fewer returns. Let’s see how Henry Ford used it to increase the productivity of Ford workers with fewer working hours. And how you can do the…
How To Think In Systems (And Why McDonald’s Has a University)
Ray Kroc was a milkshake mixer salesman. One day, he received an order of 8 mixers from an unknown restaurant. He didn’t believe it at first. 8 mixers could make 48 milkshakes at once. Why would a single restaurant need that many milkshakes? So he decided to visit the restaurant to see what was going on. And…
Critical Mass In Business: How To Reach “The Success Moment”
Everything is hard at the beginning. Started a business? Good luck finding your first 50 customers. New social media account? Getting your first 10,000 followers takes forever. People put in the effort (and money) for months, but don’t get any visible return back. It’s frustrating. So most people quit at this stage. Crossing the valley of…
Synergy In Business: How YouTube went from near failure to global dominance
In April 2005, YouTube co-founder Jawed Karim uploaded the first video on the platform: Me at the zoo. And the platform went live. The founders expected YouTube to succeed. But nobody imagined it would happen that fast. People loved uploading and watching videos. In one year, YouTube reached 25 million daily views. And new users kept coming.…
Sustainable Competitive Advantages: Become Irreplaceable (With Examples)
“In business, I look for economic castles protected by unbreachable ‘moats.’” That’s how Warren Buffett answered a question on what he looks for in a business to invest in. What did he mean by a moat? Let me explain with an example. Everybody can make a caffeinated soda. But for a new competitor, beating the…
How To Beat Bigger Competitors: Blitzkrieg
The German army shocked the world when they entered Paris in 1940. On paper, the French army was ready before the invasion. They expected an attack. So they bolstered their defenses for years. They even built the “impregnable” Maginot line, a 280-mile-long fortification. But the Germans defeated the French army in only 6 weeks. How was it possible?…
The Iceberg Model: Solve Business Problems The Right Way
What Is the Iceberg Model? Most people react to problems. They see the apparent reason and look for quick fixes. But in complex systems —like a business— problems usually have deep root causes. Like what? Like the processes, structure, or people’s beliefs. Not fixing these reasons causes issues to occur again and again. And turn…
RICE Scores: A Simple Method For Project Prioritization
“This is done, what’s next?” That’s what you ask yourself after finishing a project. It seems trivial, but it’s the most important question that defines your results over the long term. Why? Well, most people believe productivity is doing a lot. But that’s an illusion. Real productivity comes from doing the work that brings you the best results. So it’s…