Get my new weekly sketch in your inbox

Join over 30,000 people learning something new in a moment each Sunday.

The "virtuous cycle" of Amazon and Uber illustration: closed loop flow diagrams demonstrate the effect of growth on factors like demand, price and service for Amazon and Uber.

The ‘Virtuous Cycles’ of Amazon and Uber

Networks effects can lead to massive, rapid growth especially if you manage to get a virtuous cycle turning.

Amazon leveraged this model by Jeff Bezos in 2001 for mega growth. Amazon calls it a virtuous cycle (and some call it a virtuous circle). And, more recently, the Uber variation, by David Sacks explains much of Uber’s wild ride. The virtuous cycle is a form of flywheel where once it gets going it keeps on spinning.

When you build a platform that leverages network effects in the right way it can enable growth way beyond what has historically been possible.

Also, see Metcalfe’s Law, the business flywheel, exercise and sleep

You’re welcome to use and share this image and text for non-commercial purposes with attribution. Go wild!
See licence

Buy Me A Coffee