Linear commerce and the rise of flywheels

Over the past few months we’ve been increasingly looking to the digital economy for learnings that we can apply to ‘traditional’ (if this actually exists any more) businesses.

One of the concepts that we’ve embraced is the idea of linear commerce. Put as simply as we can, linear commerce is the commercial opportunity that arises where digital media and e-commerce meet: i.e. a great product will always need an organic and passionate audience to consume it – and captive audiences need products and services innovated to their specific interests and tastes.

It’s what happens when a beauty blog builds a captive audience around its content and then develops a set of products to sell to that audience (Glossier).

It’s what happens when a cycle apparel business builds a community group around shared identity, social activities, meet-ups and codes of conduct that helps to massively reduce its marketing costs (Rapha).

It’s what happens when one of the most followed people on social media creates products that she knows will appeal to that same set of followers – and builds a $200m business off the back of it (Kylie Cosmetics).

(It’s also one of the best ways for D2C businesses to avoid becoming hooked on the sweet, sweet drug of paid traffic – as we’ve written about previously)

And one characteristic of linear commerce which makes it so attractive is that an engaged audience will not only buy a product, but will help to shape future products – in effect helping to reduce R&D budgets and drive innovation.

Which means that linear commerce isn’t static. In fact it isn’t really linear at all – it’s circular. Which makes it more like a flywheel:

The interesting thing about this (very simple) flywheel is that it’s largely been driven by the creator community and their ability to leverage a new infrastructure of accessible, low-barrier-to-entry tech platforms (Patreon, Shopify, Substack to name just a couple). So whereas traditionally (and simplistically), building a business was a matter of creating a product, building a brand around it, and finding an audience to sell it to, the creator economy flipped this on its head: build a community (or audience) of highly engaged, passionate people, whose buy-in slowly but surely builds a sense of brand, from which you can create products to sell back to the community (or even better co-create product with the community so they have a deeper sense of involvement in the innovation process and more emotional skin in the game). The community feel more and more invested in the brand and become vocal advocates for it, increasing the size of the community and the strength of the brand. Rinse, repeat, and grow.

Of course it’s not just DTC and ‘creator economy’ businesses that have leveraged flywheels – plenty of ‘digital native’ businesses have also used them to build scale – most famously Amazon. And within that simple audience/brand/product cycle there are many more elements that will depend on the type of product or business – data, customer experience, content etc etc.

We’ve baked flywheel thinking into launch and comms strategy for a number of clients recently. It’s worth asking yourself how it could fit into yours.

Image credit: @xokvictor