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A business flywheel describes a system in which the output of one part is amplified and adds energy to other parts. A physical flywheel does something different: it is a primitive battery, a way to store energy to be deployed later, much like the spring in a mechanical watch.
Disney and Amazon are famous for the concept, and it inspired a lot of founders to draw out their own versions. A listener pointed out that the phrase describes the wrong physics.
Disney's version links films, comic strips, clubs, merchandise, music, television, and parks, each feeding the others. There is no better shorthand for a system of integrated components that creates positive feedback loops, so the phrase stuck.
How does a flywheel store energy?
A spinning wheel holds rotational kinetic energy, which grows with its mass and speed. Putting more mass near the rim raises how much energy it stores. Engines use flywheels to smooth the bursts of power from their pistons. Modern grid systems also use spinning flywheels to store electricity.
Where did the business flywheel come from?
Jim Collins popularized the metaphor in his book Good to Great in 2001. He described a heavy wheel that builds momentum with each push. Companies began drawing their own flywheel diagrams. Amazon and Disney became the best-known examples.