A Perfectly Balanced Flywheel
We are going to end our series on The Flywheel Effect (at least for now) with an example of a perfectly balanced virtuous cycle.
Tastry, the sensory sciences company we have discussed before, has a very unusual flywheel. Unusual because it is perfectly balanced.
Tastry Network Effect Strategy
There are two massive drivers to this flywheel effect: consumer palate data and wine composition data. That’s it! And as each data set grows, it makes the other data set more valuable as well.
Of course, getting this flywheel spinning is not easy, which is why our friends at Tastry are working like crazy on many fronts to both increase their presence in retail stores to attract more consumer app users - AND increase the onboarding of wineries to increase the breadth of wine composition data base. But the beauty of this flywheel is that it is entirely self-reinforcing.
As more consumers use the app the value of being in the wine data base grows for producers – as they are reaching a larger and larger audience. And because a producer has to be in the app data base to be recommended, as the prevalence of the app increases – so should participating wine producer sales.
Conversely, the value of the apps recommendations to consumers are only as good as the depth of the wine data base. If too few wines are available for recommendation, then the app is less valuable, use will grow more slowly, etc.
In sum, this is a perfect virtual cycle: increase consumer palate data makes participation in the wine composition data base more valuable – and vice versa!
Understanding your company’s key drivers is the first step. Actually getting the wheel spinning faster and faster is the hard part. We have every confidence Tastry will – like Amazon – build a fantastic business by executing relentlessly to drive this flywheel.
Still spinning,
Joel