The Flywheel Effect

As part of this week’s lesson, we were asked to read an overview of the concepts discussed in the book Good to Great, by Jim Collins.  Good to Great is a book that talks about the characteristics that can be found in companies that went from being good to great. In the book, it mentions that the companies that go from good to great don’t do so by implementing some sort of radical change program, but instead by using pragmatic programs that were based on three elements: disciplined people, disciplined thought, and disciplined action. 

One idea that was introduced to me through reading the overview this week is the idea of the flywheel. A flywheel is a heavy, metal disk that sits horizontally on an axle. The amount of effort it takes to get the wheel to make one rotation is immense, and so is the amount of effort it takes to get the wheel to make two, three, and four rotations. However, after consistent pushing to turn the wheel, the wheel begins to use it’s own momentum to propel it around. The individual pushing the wheel doesn’t have to push any harder than before, but the wheel is beginning to pick up speed.  This idea of a flywheel teaches that continued and sustained efforts will produce positive results, and will allow a company to gain momentum. I think a lot of the successful businesses out there are successful because they don’t try to take any shortcuts, but instead put in the hard work that it takes to be a great company and they keep pushing and pushing until things start to really take off on their own. This concept is one that I plan on implementing in my own start-up business someday.

$100 Challenge Update

This week I introduced a new line in my product offering. Before, I was just offering bags of chocolate hot cocoa mix. However, after seeing that most people only purchased one bag, I decided to add another bag of cocoa mix that was a variety pack. My reasoning in doing this is that I anticipated that I could bring up the average number of bags sold through each transaction by adding more variety, and thus increasing my revenue. In these new variety mix bags are a serving of chocolate, peppermint, and marshmallow hot chocolate mixes. I am optimistic that this will increase my revenue and help me achieve my goal of making a $100 profit.