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- How to Build Your Product Flywheel (+AI tips & tricks)
How to Build Your Product Flywheel (+AI tips & tricks)
Master one of the most powerful tools of product strategy.
Imagine you’re a growth product manager at Airbnb. You’re in charge of developing a product strategy for how the company can improve retention and encourage more repeat usage of the product.
Everyone’s got an opinion. Some think Airbnb needs to focus on improving the traveler experience, others on the host experience, and still others that Airbnb’s overall marketplace needs to be larger. It’s the stakeholder alignment challenge of a lifetime. Just when it seems impossible to make progress, you break it out – your flywheel.
Suddenly, many things become clear. Most of those opinions were right, they just needed to be structured. Now we can see that retention is a function of many things, all at once. Traveler experience, host experience, marketplace size – they all matter and they all feed into each other, but some are more important than others.
From here, the conversations around where to focus your strategy can be more constructive, centered around things like strengthening the weakest parts of the flywheel, or doubling down on things that are working.
Flywheels are one of the most powerful concepts in all of product strategy. They’re also incredibly high leverage since you can reuse them again and again, and others can use them to make the same decisions you would.
But despite all this, few PMs take the time to make them, mostly because they don’t know how.
Here’s an overview of today’s issue:
A step-by-step guide for creating your own flywheels
Some tips on using AI as a partner for this process
Lots of examples of real-world flywheels
Additional resources to learn more
Let’s do this.
What exactly is a flywheel and why are they important?
As we’ve seen, a flywheel represents a self-reinforcing loop made up of key elements of a company's products and services.
They rely on the momentum of a company's operations, creating a self-perpetuating cycle of improvement and success. The more the flywheel turns, the more momentum it gains, and the less effort is required to keep it going. This makes it a powerful model for driving continuous growth.
As a second-order effect, the act of creating a flywheel encourages alignment across different parts of a company, and serves as a valuable tool for self-reflection at the company level.
What makes a good flywheel?
Good flywheels are:
Simple: A good flywheel should be easy to understand, yet capture the essence of your business model. Their goal is to aid decision-making, not be perfectly accurate. So here, while the model on the left might be more accurate, the one on the right is more useful.
Customer-Centric: The flywheel should focus on creating value for the customer, as happy customers lead to business growth.
Adaptable: A good flywheel can evolve with the business, accommodating new elements or adjustments as needed.
Why should you learn how to make good flywheels?
Besides the points above, there are lots of reasons you should personally be interested in learning to map good flywheels:
They’ll make you way better at product strategy.
You’ll get a deeper understanding of your business.
They drive alignment within your organization, and foster communication,
Done right, flywheels help drive business outcomes.
These things will immediately and obviously present you as highly competent.
How to Make a Flywheel
Alright, alright! Enough talk.
Here’s how we’re going to do this. First, I’ll run through exactly how to do this the “classic” way, i.e. without any use of AI tools. This is important context.
Then I’ll run through it again, very quickly, with tips on how you can integrate AI to power this up.
Classic Flywheel Creation Process
Block off at least one entire hour for this process.
Put your phone away and mute Slack notifications. This is DEEP WORK, baby.
I highly recommend you start this process with pen and paper. It’s gonna be messy. Starting these things on a computer makes it too tempting to start editing too early. What you need now is unrestricted freedom.
If you have access to a printer, print this article so you can have it as a reference beside you as you work.
Brainstorm a list of all possible flywheel pieces:
Your first goal is to consider all the possible elements of your flywheel.
Start a 15-minute timer.
Make a list. Don’t doubt yourself. Just list all the possible levers.
You can’t stop until all 15 minutes are up.
If you get stuck, just sit there until something comes to you.
Consider these questions:
How does your product create value for its customers?
What are the contributing factors to the metric you’re trying to drive? What could make it increase? What could make it decrease?
What are all the relevant actions users of your product can take? What are the major pieces of the UX journey? What determines which actions they can take?
What are the most important business (non-user) activities?
What are the key resources (human, financial, physical, intellectual) in your business and how do they interact with each other?
How does your business attract new customers and retain existing ones?
Identify the Core Element(s):
Determine which elements are at the core of your flywheel.
Start a 10-minute timer.
What are the main drivers of your business? In the Airbnb example at the start of this article, it was More Trips.
Ask yourself these questions:
What is the one thing that, if removed, would have the greatest negative impact on your business?
In the eyes of your customers, what is the most important aspect of your business or product?
If you were to explain the essence of your business in one or two words, what would they be?
Which aspect of your business is most crucial to your success?
You’re doing great. Now for the fun part. Start connecting the pieces together. Give yourself another 20 minutes.
To figure out how each element of your flywheel can feed into and reinforce the others, consider these aspects:
Identify dependencies: Consider how one aspect of your business might affect another. For instance, does improving product quality lead to better customer reviews, which in turn might drive more sales?
Look for virtuous cycles: The goal of a flywheel is to create a self-reinforcing loop where each piece feeds into and amplifies the next. Try to identify elements that not only relate to each other, but can also enhance each other in a cyclical way.
Consider customer behavior: Understand how your customers interact with different aspects of your business. For example, does a larger product selection lead to more browsing, which then increases the chances of a purchase?
Consider the customer journey: A useful way to build connections is to map out the customer journey from the moment they discover your product or service to the point of purchase and beyond. This can help you see how different pieces of your business interact from a customer's perspective.
Some things to keep in mind:
Embrace Imperfection: Recognize that no model can capture the infinite complexity of reality perfectly. Aim for a flywheel that's generally true and most of all, useful.
Simplicity is Key: Not every piece of information needs to be part of your flywheel. Keeping it simple can often make it more effective.
Find Missing Links: If you're struggling to connect two parts of your flywheel, consider that there might be an intermediary step or element that you're overlooking.
Once you feel like you’ve got the basic structure in place, you might find it helpful to move everything onto a computer. You probably already know what tool you want to use, but if not, some good options are:
Share your work:
Amazing job making it this far! Now it’s time to start socializing your flywheel for feedback. Start with your team and your manager before sharing too widely. There are probably definitely still some mistakes, and/or improvements you can make.
Practice discussing your reasoning and work these out before you open yourself up to wider scrutiny.
Once it’s ready, start sharing it more widely. You’ll be amazed by the response.
AI-Powered Flywheel Creation Process
Now with that context, here are some tactics for layering AI into this process.
Everything stays the same, except now of course you’ll need your computer at hand. This process should primarily still be done by hand, copying ideas from your AI tool onto the page before continuing. Don’t do any editing on the computer until the end.
You’ll need to have a crisp definition of how your product works and the goals you are trying to achieve for the AI to have enough context to help you. Here’s a prompt to start this process:
I'm looking to create a flywheel for my business and I could use some help. Role play a product strategy expert, with deep knowledge of making effective flywheels.
My company operates in the [industry].
We provide [description of product or service]. Our target audience is primarily [description of target audience].
In terms of our product, [description of key product features and how customers use your product].
Our main business objective is to [description of main business objectives].
We're particularly focused on [description of key areas of focus for improving or growing your business].
Do you understand this context? In the following questions, I will ask you for help with teasing out different elements of my flywheel.
Then for the following sections, here are some prompt ideas for getting some help.
Brainstorm a list of all possible flywheel pieces
What are some factors that could increase or decrease my key business metric?
Which parts of the user experience do you think could be used in this flyhweel?
Which aspects of the business might I be missing?
Identify core elements
Based on this information, what could be the main driver of my business?
Which aspects of my business might be the most crucial for success? Explain your reasoning.
Which of these factors seem like they might be related? How and why?
Which elements of this flywheel seem like they form loops?
How might a [item 1] affect [item 2]?
At this point, a picture should be starting to emerge. You should have key drivers and an understanding of the relationships between them
Finally, you can ask the AI to draw your flywheel for you! Use this prompt:
I have brainstormed some potential elements for a flywheel for my business, and I would like your help in structuring it and representing it in text.
Here are the key elements and drivers I've identified:
Element/Driver 1: [Brief description of what this element is]
Element/Driver 2: [Brief description of what this element is]
Element/Driver 3: [Brief description of what this element is]
Element/Driver 4: [Brief description of what this element is]
I believe that these elements interact in the following way:
[Element/Driver 1] feeds into [Element/Driver 2] by [describe how 1 leads to 2]
[Element/Driver 2] strengthens [Element/Driver 3] because [describe how 2 enhances 3]
[Element/Driver 3] contributes to [Element/Driver 4] in the sense that [describe how 3 influences 4]
[Element/Driver 4] in turn boosts [Element/Driver 1] by [describe how 4 loops back to 1]
Give me this output in Mermaid Code.
Here’s an example output:
Not too bad! You can easily mock this up on your own from there.
Challenge – Map OpenAI’s Flywheel
To put this all into action, you need to practice. And I want to see it 😎
Of course, you can’t share your internal docs, but mapping another company’s flywheel is great practice anyway.
Challenge: Draw OpenAI’s product flywheel.
Tag me on Twitter and I’ll Retweet your masterpiece!
Some tips to get you started, OpenAI’s business model relies on:
AI Models: OpenAI develops and offers advanced AI models like GPT-3/4 that can be used in a wide range of applications.
Licensing: OpenAI licenses these models to businesses and developers, which is a primary source of revenue.
API Access: OpenAI provides an API that allows developers to integrate its AI models into their applications, increasing usage and reach.
User Engagement: The more users interact with applications powered by OpenAI's models, the more feedback OpenAI receives, which can be used to improve the models.
Data: The usage of OpenAI's models generates a large amount of data, which can be used to train and improve the models.
Plugins and Extensions: OpenAI can expand the reach and usage of its models through plugins and extensions, enhancing user engagement and satisfaction.
Examples, examples, examples!
These flywheels can be of varying complexity. Here are a few I’ve found around the internet.
(In general, if you just google “product flywheel for [company]” you can find some great stuff.)
This epic flywheel from, uh, Epic Games:
And just for fun, Disney’s crazy flywheel:
If you want to keep diving deeper, here are some great resources: