"Competitive advantage can be represented visually as 1 or more feedback loops. These create the advantage “flywheel” that maintain and grow a moat over time."

"In the Economies of Scale flywheel above, the primary driver of more volume is low prices."

"If prices are maintained or increase, scale will yield higher margins → more resources to spend on growth → more sales volume."

"The Brand Habit flywheel exhibits the typical loop for habit-reinforcing association of a brand with a specific quality or job-to-be-done."

"Another example of brand advantage is more of a social proof effect: Product has success → the cool kids want it → improved perception of product → …"

"The most successful moats have multiple flywheels that feed off of each other’s momentum."

"Friction and limiting factors"

"In systems thinking, reinforcing feedback loops are almost always slowed by a balancing loop attached to it. Growth doesn’t continue unchecked, and flywheels always run into friction."

"Switching costs & network effects — product quality slips as the incentives to improve aren’t strong when customers can’t leave → value of a competitive offering overcomes switching cost."

"Direct network effects — any source of decreasing value to users, which could cause users to exit and turn the virtuous cycle into a vicious one."

"Where are the sources of positive feedback?"

"How do you get the flywheels moving? What strategies can help get inertia? (For example, “doing things that don’t scale.”)"