Uber, Spotify, and Netflix: Singular Flywheel Strategies Revealed
What’s the secret behind Uber, Spotify, & Netflix’s continuous growth in focused markets?
The singular flywheel strategy:
It’s one of the hardest challenges in business to fully devote yourself to a singular flywheel. It’s a daily battle of saying “no.”
Uber, Spotify, and Netflix have done it beautifully. Let’s explore…
Uber’s Flywheel
It’s based on the two values that drive ride-sharing:
- Faster pickups: More geo coverage → Faster pickups → More demand → More drivers → More geo coverage
- Lower prices: More geo coverage → Less driver downtime → Lower prices → More demand
What’s genius about Uber’s flywheel is that it counter-positions the company against its competition. The key element in each flywheel is more geo coverage. That’s vastly different from Lyft, which took a more focused approach.
Spotify’s Flywheel
It’s based on the two key vectors Spotify competes on:
- Data: Word of mouth → Users/ scale → Engagement → Data → Personalization → Improved experience
- Promoters: Word of mouth → Lower customer acquisition cost → Better cost structure → Users
Spotify’s flywheel is genius in its own way. It acknowledges the reality that it’s in a low-margin business by focusing on lower customer acquisition costs. It also builds an ever-increasing moat with its data-based personalization flywheel.
Netflix’s Flywheel
Like Uber and Spotify, it’s based on the company’s two key motions:
- Content Flywheel: User experience → Time spent watching → Filmmakers → Movies and shows → User experience
- Data Flywheel: User experience → Time spent watching → Data
Netflix has a very interesting flywheel because user experience and time spent watching are shared in both motions. It’s a company that drives maniacal focus by reducing down the parameter set. In a market as competitive as streaming, it’s genius.
The interesting thing?
The two circle pattern is NOT the only way to build a flywheel. This deep dive is how to build a flywheel that fits your business.
Takeaways:
Each of these flywheels has amazingly simple structures. They have just two motions. To continuously grow in a single market like these behemoths, you have to focus on a few key timeless vectors. That’s the genius approach.
