The Flywheel Concept That Will Change Your Business - In Just 24 Minutes

Remember when you first started your business and it felt like a game? You couldn't wait to wake up and work on it, and now it's stress, overwhelm, and fire drills. Today we're going to change that. Here's what we'll cover: how flywheels create greater results with less effort, two examples that I actually run— newsletter growth and direct sales— and a 15-minute weekly check-in that keeps the system improving. Let's start with the 3 laws of flywheels, and then from there I'll show you the 3 different ways of doing things in your business. And when you see how to move from option 1 all the way to that 3rd way, you'll see how the path out to the business you want is actually obvious. All right, so let's get to the board. So in a minute, I'm going to break down the 3 laws of flywheels and the 3 ways of doing things in your business. But first, I just want you to know that flywheels is one of those words that so many people use in business. It's, it's a buzzword, but everyone uses it and they don't actually know what it means. So we're gonna dive in and I'm gonna walk you through exactly what it means, how to implement them, and just how to take your business to the next level. But first, the 3 ways of doing this in your business. I wanna map this out because once you understand it, you're gonna see it everywhere and you're gonna immediately know how to level up, what you do next. So the first way is scattered. So scattered is when you're just jumping around and you're doing all kinds of things. You know, it's, you could be spending time on pretty much anything. And what you do on any given day is really just determined by your motivation, what shows up in your inbox, or, you know, what someone else happens to suggest. This sounds fun. And you're just jumping around between all of these different things. This is the way that most creators run their business. I've certainly spent a lot of time doing it that way myself. The next way of doing things that's a bit of a step up, but still not where we wanna get is linear. So linear is where you take the tasks that you know you need to do and you put them in a predictable format where you can do them over and over again. You document them. This is the standard operating procedure, the SOP that so many professionals use to run their business. As this is so much better than scattered, it's still not the optimal way to run your business. Because the optimal way, you're not gonna be surprised by this based on the title of the video and everything else, the optimal way, the flywheel. This is where we take our linear process and we put it in a loop. But it's a lot more than just bending it around or writing the exact same thing in that circle. What it actually is is making it so that every time you go through this, it closes perfectly. Each step flows smoothly from one into the next. And when you do things like this, you can do the same activities over and over again and get much better results. So these are the 3 ways of doing things in business. And the goal is, if you're currently doing things in a scattered way, we want to go to linear. Document the process, get consistent, something that you can do over and over again. We can even hire a team member to do for you. Now, if you're linear in your processes, well, we want to turn this into a flywheel. And that's what this video is about. Now, as I said, you can't just bend this into a circle and say, oh, it's magically a flywheel. If you wanna make flywheels, we have to get into what actually defines a flywheel. And that's where we come over here to the 3 laws of flywheels. So the first law is flow. So activities flow smoothly from one into the next. And that's so important when we visualize a flywheel, cuz it's not just that they flow from the early steps, but actually that we close that loop and bring it all the way around. So each step is the logical conclusion of the previous step. Now the second law is ease. Each rotation of this flywheel is easier than the last. Now this is particularly interesting when we combine it with the third law, which is growth. So each rotation produces more than the last. That means every time we go around this flywheel, we're getting more email subscribers, more revenue, more testimonials. Whatever this flywheel is set up to do, We're getting more with every rotation. All right, so if you take a step back and look at these laws combined, particularly Law 2 and Law 3, it's getting easier with every rotation and it's producing more, which kind of sounds too good to be true. Like you're telling me I'm gonna do less and less work and I'm gonna get more and more results. Yeah, that's exactly what I'm saying. It works in real life physics and it absolutely works in creator flywheels. So up next, I'm gonna show you some really practical flywheels, including what I call the million subscriber flywheel. which would be a perfect example for how it gets easier over time and produces more results. So now up on the board, I have the million subscriber flywheel. This is the flywheel that we use to grow Sahil Bloom's newsletter from 100,000 subscribers to now over 850,000 subscribers in just a few years. I wanna break it down. The first thing with every flywheel is you have to have a goal. You want to have one goal. Too many people are saying, I want to do this and that and this other thing. But no, focus in on one goal. And for this, the goal is pretty clear, it's in the title, a million subscribers. So the thing that we're measuring as our goal is subscriber growth. Now the next thing that I like to track is the cadence. How often are we measuring this flywheel? I'll talk about measurement a bunch more later on, but this flywheel could either be measured on a weekly basis, if you're watching it really closely, or a monthly basis if you want to zoom out just a little bit. So with that out of the way, Well, let's dive into the flywheel itself. I like to start at the top. That's new subscribers. This is where subscribers are coming in from X, from LinkedIn or Instagram, and they're going into lead magnets or other things they might want to opt into before they get the newsletter. So we've got new subscribers coming in there. The next step is interesting. This is sort of a multiplier step, and that is Kit's Creator Network. So through the Creator Network, Sahil's partnered up with other great newsletter operators and they're recommending each other. So every subscriber that comes in here is really getting turned into, let's say, 1.4 subscribers. So he's getting like a 40% boost on all subscribers who come around. Now what's happening next is he's sending a twice a week newsletter to those subscribers. And twice a week is important, but I'll share why in a second. So that newsletter. Is going out twice a week. Now he's selling sponsorships in that newsletter. So to everyone who's subscribed, they're seeing the sponsorships. And then what he's doing is he's taking the money that he makes from sponsorships and he's pouring it back into growth. And he's doing this through the SparkLoop partner network. And this is how he's able to tell other creators, hey, if you recommend my newsletter, I will pay you $1.50 or something like that for every engaged subscriber you send to me. He can also spend money on Meta ads or really any other source. Then what the— that's getting him is more new subscribers. So you can see we actually have a loop closer here and we're coming around and we're back to the beginning. So now let's walk through this flywheel again, but let's do it from the perspective of the three laws. So the first law is flow. Every step flows smoothly from one into the next. Look, we went all the way around, we made it back to the beginning. Law number 2 is ease. So every rotation of this flywheel needs to get easier over time. And then the third one is growth. Each rotation needs to produce more than the previous rotation. Let's walk through it. The more new subscribers that Sahil has in, the more they're amplified in the creator network, and then the more people receive his newsletter. And this is where growth really kicks in. If this sounds like something you might be interested in going a little more in detail on, I've got my Creator Flywheels course and enrollment on that is opening now. So it's a course and group coaching program where I'll help you build and implement flywheels in your business. So we'll get into some more details at the end, but I just want to let you know that enrollment closes in the coming weeks and there's a limited number of seats. All right, let's get back to the board. So if he has 100,000 people reading his newsletter, He can charge a certain amount for sponsorships, $1,000, $2,000 per issue. Because he's sending twice a week, he's getting 2 touchpoints, means he can sell twice the number of ad slots. That gives him significantly more money to dump back into growing his list through advertising, which gives him a lot of new subscribers. So an early rotation of this flywheel might give him, you know, a few thousand subscribers a month, but a later rotation As he's able to charge, you know, that 500,000 subscribers, able to charge 3 to 5 times as much for sponsorships. That gives him 3 to 5 times as much to reinvest, which gives him 3 to 5 times as many new subscribers. So early on, instead of getting 1,000 subscribers or 5,000 subscribers a month, you can be getting 10, 20, 30,000 subscribers a month. Because what you're seeing here is effectively a snowball, right? You make that little snowball and you start rolling it and it goes very slowly at first. but then as it gets bigger and bigger, it compounds and then it gets to the point where this is almost an unstoppable force. So this flywheel has been absolutely crazy and it's really taken Sahil from 100,000 subscribers to over 830,000 in just a few years. And this whole flywheel is built around Kit, and that's really what makes it so powerful. Now, I might be a little biased because I founded Kit and I'm the CEO and I spend basically all of my time building and growing this product. What the team has done is really built the power of flywheels into every aspect of this product. So that's why we have the creator network, so you can partner with other people and really amplify your growth. That's why the newsletter writing process is so easy and streamlined. And then we're selling sponsorships for you and helping you earn money from advertisers directly on the platform. And then that's why we also purchased SparkLoop, that you can reinvest and pay other creators to help you grow and get new subscribers. So. If you are not using Kit right now, you should definitely go to kit.com and check it out. So now you've seen the 3 laws in action with a very tangible, specific flywheel, but now I want to show you measurement because that is such an important step. So measurement for your flywheel sounds complicated, but it can actually be really quick and easy. The first thing is that you want to set a weekly calendar reminder to have you come back and see how is this working, right? That weekly cadence is so important. We're looking at ease and growth. You want to keep it to about 15 minutes. So I'll show you a screenshot of what I use to measure flywheels up on the screen. But here on the board, we're just going to keep it really simple and high level. The thing about measurement is that it sounds hard, but actually we're going to break it down into just 15 minutes per week. The first thing is you always want to start with cadence. How often does this flywheel happen and when should you measure it? I said for the million subscriber flywheel, we could do weekly or monthly. If this is the main goal in the business, then make it weekly. The faster you measure and the more time you spend on it, then the faster that you're gonna get results. What we're gonna do here is our cadence is weekly. And so what you wanna do is create a calendar reminder for yourself, time scheduled on your calendar. Let's say Friday is at 2:00 PM where you're gonna go in and you're gonna look at this flywheel and measure how is it actually performing. Now the metrics that we want to look at are ease and growth. So what that means is we're going to have a line in the spreadsheet for each one of these steps. And on ease, we're going to measure the friction. How difficult was it to do each one of these things? And then let's try to mark specific examples of what we might improve next time. On growth, well, how did it actually perform? How many new subscribers did we get? How much revenue did we make from sponsorships? Write those out in specific numbers. And then once you've gone through each of the individual steps, you wanna zoom out and say, hey, what can I improve? If you could just make one fix per rotation, what would that be? Right? I wanna be able to check off, I reduced friction in this way. So for example, maybe I found that the newsletter writing process was quite difficult this time. And so I implement a fix next time to make it easier to come up with ideas and to streamline that process. And that's it. Measurement is really quite easy, but what it does is it keeps you on track doing the same activities over and over again, and then it makes sure that you're really hitting those two laws of ease and growth and making sure that, that flywheel is living to its full potential. So we talked about measurement and how to measure the flywheel and why that's so important, but I want to show you how specifically this flywheel produces more with every result. So here's why each rotation produces more. First, the audience grows. Second, as we come around, sponsors pay more. What that means is as we come around here, we have more budget to reinvest. Now, having more budget to reinvest means that the partner network expands our reach. And finally, that means faster list growth back to new subscribers. And we've completed our circle. We've closed the loop. We've got a flywheel that's producing more with every rotation. All right, so that's the million subscriber flywheel. Now I wanna show you a really powerful flywheel that I personally used to grow Kit in the early days from $2,000 in monthly recurring revenue, over $100,000 a month revenue. All right, so now let's walk through the direct sales flywheel. So here on the left I've got a sheet where I can draw that out, and then on the right I brought back the measurement sheet because measurement is so important. Every flywheel. Kicking this off, we're gonna measure the direct sales flywheel by how many new customers we bring in and how much revenue is that. But the first step in the flywheel is to identify new customers. The next step is outreach, and then we have the sales call, and after that we have follow-up, and then from there we do a concierge migration. And then finally, we're gonna close out the loop with a testimonial. Now, as this beautiful flywheel It closes the loop. We've got all the steps in place. Now let's talk through it at a high level. So this is what I use to drive $2,000 MRR to $100,000 in MRR and really start out by identifying key customers. I focus in on a specific niche that I wanted to serve really well and use tools like BuiltWith and Nerdy Data and anything I could to find out who might be a good fit customer that I could reach out to. Second thing that I would do is I would just send an outreach email. And I keep it really, really simple. So I'd say, hey, my name's Nathan Barry, and I was wondering if you had any frustrations with Mailchimp or AWeber or whatever the tool was that I identified in that previous step. And I'd say, the reason I ask is I built an email marketing tool called Kit. It's for creators like you, and I wanna understand the pain points so I can build a better tool. They would usually come back and say, oh yeah, I'm really frustrated with this and that and this other thing. And then I could say, funny you bring that up. Because I actually was frustrated with the same things. It's true because I used these tools before I started Kit, and I would use that to get them on a sales call. And from there I would talk to them about their frustrations, understand their business, and then say, hey, would you be interested in checking out my product? Hey, you know, can I show it to you? Often that would go well, but I wouldn't usually close the deal on a call, right? That's really aggressive to have happen right away. And so that's why the follow-up was so important. We're at outreach over time and make sure to stay in touch cuz maybe this month wasn't the right time to make a switch, but next month would be. The next step was the concierge migration. And this was so important because what happened is people would say, oh, I'd love to switch over. That sounds great. Your product is much better, but honestly I'm not going to, it's way too much work. And I would get rejected time and time again and I just didn't know what to do. There wasn't any amount of convincing that I could do that would get them to say, Uh, yeah, okay, you know, I'll sign up. So finally one day I said, you know what, it's not that much work. I will do it for you for free. And they're like, uh, okay. And so then that's how I found myself doing all these migrations myself. But what it meant is that we got a little bit of momentum and we got going very gradually and I got these customers in, which then gave me people that I could reach out to. For a testimonial. So now what happened if we work our way all the way around this, I'd get the testimonial and I'd also ask for referrals and use that to help identify other like-minded customers. So this early rotation was brutally hard, and that's actually a characteristic or a trait of flywheels. They start out really, really difficult at first, and then they get easier and easier over time. That means the first rotation was really, really painful and difficult because I didn't have any customers. I didn't have any reputation. I didn't have any testimonials. But the next rotation, I had a few more people that I could call out in the outreach and I got more credibility. I got better at the concierge migrations and on from there. If we talk about measurement for a second, you know, the cadence on this one is also weekly. I could have a time that I check in and I could just go through and measure, hey, what are the hardest parts? What can I do to reduce friction there? How can I have a better outreach process? How can I make migrations more smooth? And then where can I drive more growth, right? So maybe how can I increase the number of people that I'm reaching out to? How could I get better at collecting testimonials? I'm gonna have a higher close rate on my sales calls. All of these things measured every week compound over time, and that's what ultimately took us from $2,000 in MRR to $100,000 in MRR in just 12 months. Hey, really quick, I wanna break down flywheels and how they work in real life cuz this isn't just theory or something that people talk about in business books, flywheels exist in real life. And I came across them when putting in a pump at an orphanage in Africa. We're trying to pump water without using electricity. So you might think, okay, you're going to use a hand pump. That's not what we use here because we're not camping for the weekend. We've got to provide consistent water for 100 kids. So instead we put in a flywheel. And what a flywheel is, it's this large metal wheel that turns. So instead of the linear up and down motion of a hand pump, It's this rotational continuous motion of a flywheel. The hand pump has a direct correlation between effort and impact, whereas the flywheel starts difficult and then gets easier and easier over time. In a minute, we'll wrap up this video and give you some next steps for you to implement flywheels in your business. But before that, I wanna show you this last flywheel, which is really about podcast recording. Now I have a day job running a fairly large software company and so I can't spend all of my time recording podcasts. And as I was producing this podcast that I'm really proud of, it was just taking a huge amount of my time. And so I had to take a step back and work with my producer Kara in order to design a flywheel that would allow me to meet my goals for quality and my constraints for the amount of time. So let me walk through the steps and then we'll talk about how we improved each one. So the first step is really to plan the episodes. And then from there, we're gonna batch record, and then we have a debrief meeting, and this step is really important. And from that, we're taking the things that we learned and the friction points that we found, and we're going to improve the system. The big problem that I was having is the weekly podcast in person was taking a huge amount of my time. So what we did instead is we made a, a plan for how we're going to tackle this as a whole, and then we did these batch recording events. So instead of recording every week, we record once a month. We have 4 guests fly in, we do this great batch recording event that includes the individual episodes as well as a dinner with everyone. And then what that allows us to do is be really intentional about reducing friction in other areas. So what we do is in this debrief step, we identify all the points of friction from a batch recording and we get to very specific action items of how we're going to improve them. And that goes into the plan for next time. So friction, fix, and then how it's gonna get easier. So two examples that I wanna walk through. One is markers. This lovely blackboard and paper is fantastic with how it looks. Totally a pain to get markers to write on it. And so for weeks as we'd record these episodes, we'd just be frustrated with the markers weren't right. They were drying out. You had to cap them every time. And so we made sure to test a ridiculous number of markers So we got ones that work consistently every single time. Shout out to Sharpie on that one. The second one is recording intros. Our team who produces the show on YouTube came back and said, hey, give us higher quality intros so the guests look better, but also so we can cut trailers that are gonna have better retention and watch time. So I would try to riff this at first and I did not do a good job. So then Kara, my producer, would give me notes on the phone, like a script that she would write during the episode. And say, hey, why don't you take this and, you know, review it and then deliver that to the camera? And I would do a terrible job at that. Actually, the worst part is I kind of felt embarrassed in front of my guest because I sort of butchered the intro about them and I was supposed to memorize it. Just did not go well. So then after another one of these rotations, we're like, we've got to do something else. And so out of the 6 cameras in this room, we actually put a teleprompter on one of them. So now during the episode, Kara, my producer, writes an intro, both her writing and then a custom AI project to help fine-tune that. Then at the end of the episode, I just tell the guest, great episode, loved recording with you. Hang tight for a second. I'm going to record an intro. And off the teleprompter, I just read the most perfect intro and they're blown away. They're super impressed by it. It took something that was embarrassing for me and turned it into a point of pride and just reduced so much friction. So as we've gone around this over and over again, it's taken something that was taking a huge amount of my time, and now it's allowed me to run a weekly podcast that I'm super proud of with guests that I love spending time with in just a day and a half a month. So that's flywheels. Flywheels have changed everything about my business and my life, and I would love for you to implement flywheels as well. So as you're going through this, there's just 5 steps that I wanna walk you through. The first one is just sketch your flywheel on paper. By doing that, what you're gonna do is just map out all these ideas. You're not gonna get it perfect the first time, and that's why doing it on paper, you know, with sticky notes, cards, anything you can move around quickly is gonna help you find the right flywheel. The second one is to pick your cadence. So the cadence at which you measure this flywheel is really important. Some of them are going to be a weekly thing that you're operating really quickly and staying on top of. Others, you're going to be at a much higher altitude. You might have a monthly or maybe even a quarterly flywheel that operates much more slowly. The third thing that you want to do is to add that 15-minute calendar block that's going to keep you on track every single week. The biggest mistake that I see with flywheels is people start out doing them and they're hard, and so then they stop doing it. And really, you never do it for long enough in order to see the 3 laws kick in and especially to see that friction decrease and the growth really take off. That calendar block is so important. And then number 4, you want to choose 2 starter metrics. You don't have to measure everything at once. You can layer on a few things over time. So just choose 2 to start with, and then after you get a few rotations under your belt, maybe add a 3rd and then a 4th. And then finally, number 5 is is you want to reduce one friction with each rotation. Know that that flywheel is going to be hard when it gets going. It's going to be way more difficult than the hand pump version. But if you just reduce one friction every time you rotate it, it's going to get easier and easier. And eventually you'll get to the point where either you build a flywheel that makes a newsletter that completely transforms your life and business, or you get to the point where you're producing a podcast and it's just so easy that it brings you joy every time. Because all of that friction has been eliminated from it. So that's the introduction to creator flywheels. It can sound overwhelming and difficult, but really what you want to do is just pick one flywheel and start. What it means is that you can make each rotation easier and you can have those results compound over time. I've just seen incredible results in my own business and in so many students that I've helped implement this. It's going to make a huge difference for you as well. If you want to go deeper, enrollment in my Creator Flywheels course is open now and it's going to close in a couple of weeks. You can check that out at creatorflywheels.com. And if you're watching this weeks or maybe months later, go sign up anyway, go check it out. Because what you're going to find is if you get on the waitlist, I'll send you more great content about flywheels, and then you'll be the first to know when we open it up for another cohort.