Hive: A Flywheel Approach

in LeoFinance2 months ago

This is one of the most interesting aspects to what is taking shape in the blockchain community. It is a business idea that long was sought but had varying degrees of success. These days, a couple of the technology companies are really making strides with it.

To start, what is the flywheel approach?

In physics, a flywheel is a device that rotates to generate energy by its momentum. That energy is then spun out to a motor, providing an effective form of power. The key is that very little energy is required to put in, once the disk is spinning, to get more output.

In business, it is a similar concept. Once a company is started to enter the psyche of consumers, very little effort is required to get them to expand to something new. This allows for companies to keep entering new arenas and leveraging their existing customer base.

Essentially, this looks like a chaotic approach. A company is going in many directions at one time, seemingly without a plan. The idea is that when there are breakthroughs, they are worth more as the ecosystem grows. With more offerings, the total revenue of the company, will skyrocket. Profits should move at a faster pace at some point since the cost of customer acquisition is lower.


Amazon and Tesla are two examples of companies employing this strategy. Amazon went from an virtual bookstore to full-blown online retailer. They started adding new products, which only required another page added to their site, and they could leverage the customer base. Over the last 2 decades, this put them at the head of the retail category.

Tesla is another company that appears to be going in a dozen directions at the same time. It appears that every few months, another business is proposed, the latest being a Tesla restaurant. While this looks misguided, in the end, if it all comes together, this will really send the company's profits into orbit. The more people who buy their cars, the more that are eligible to use the charging stations, buy software upgrades, subscribe to gaming platforms, and, yes, eat at the restaurant. They might also by home energy systems from the company.

Hive is operating on a similar model. By being decentralized, sans a company leading the way, people are free to build and develop what they want. This is taking things in many different directions at one time. Each project is making its own progress which is pulling the entire ecosystem forward. When combined with a variety of projects, the total impact could end up being great.

Each new Hive account is a potential user for many different applications. This is where the Network Effect that was focused upon in Reed's Law comes into play. As one utilizes a single application, the likelihood of that person employing something else on the network is great. Thus, it take very little energy for a second project to benefit from the same person.

We saw this with Leofinance. People were using that application and, when Cubfinance was introduced, many got involved with that. Ultimately, the reverse will be true. As more people find Cubfinance, a percentage of them will move around that ecosystem, working their way back to Leofinance and, perhaps, then onto other Hive applications.


This is why Hive's account management system is so powerful. If we think about what Facebook, Twitter, and Google were able to do, it is beyond just their own platforms. How often have we come across a site where it says "sign up with Google"? Those companies established themselves as account management systems in addition to social media platforms.

Hive has a somewhat unique account system. Unlike many in the blockchain world, there are no 32 character, autogenerated wallet names. Each person can create a unique username just like on any of the other platforms previously mentioned. This allows for people to easily remember their account (wallet) for future use.

For the moment, it appears that Hive is going in a million different direction, thus making no progress. A new tribe is popping up here and there. We watch the development of different applications discussed like SpkNetwork and HSC, yet see little evidence of that coming to fruition. There are a number of games, each which has a few updates, but nothing major. All of this seems like it is not moving things anywhere.

That could be an accurate assessment, especially taken individually. However, in totality, there is a different story. As each aspect experiences a bit more success, a marginal amount of growth, then we see things advancing, even if microscopic. That will not always be the case as development continues.

As a follower of Tesla, there is a similar situation there. Many look at that as a car company since that is where the overwhelming majority of the revenues come from. They do not look at the other stuff since it is, from an accounting perspective, basically a rounding error.

Nevertheless, if one delves deep, there is some progress being made. It might not be significant in terms of the overall numbers but that could change down the road. As things start to develop, that aspect of their business could face a massive explosion a year or two from now.

It is the same thing on Hive. While we are dealing with inches instead of miles, all of them do add up. The flywheel requires the most energy when it is stationary. To get it started eats up the majority effort. However, once it is going, each additional unit of energy output needs very little input.

For now, it is a lot of trudging on Hive. This might be the case for the rest of the year. In fact, it will likely be how things are. There will come a point, however, when we do see things accelerating. The development continues, bringing more exposure to Hive from different areas. While this is not evident to most, there is some penetration happening in certain arenas that could make Hive a viable player there.

The flywheel is a very accurate analogy. As we see things start to rotate at a faster pace, we will enjoy more success with a great deal less input. We simply are not to that point as of yet.

In other words, we are the train still climbing up the mountain. It is taking a lot of effort to advance even a few feet. There is a peak to this summit however and when we reach it, that is when things will accelerate.

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There are now 6.5 million El Salvadorans who can join Hive and earn and then convert to BTC and spend it directly on goods and services.

Is there a good way to send Hive directly to a Lightning wallet without BTC fees? @blocktrades this would be a great way to promote Hive.

That is true. The more people who are exposed to crypto, the greater the opportunities for Hive. We obviously are still building out some infrastructure but it is good to see. We will get people onboarding others if we can penetrate that country.

Hive as a transfer of value system is something that is completely overlooked.

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I'm going to look into what it takes for Lightning integration as soon as I have a free moment.

I've done a more detailed post setting out this Hive Lightning integration idea and other opportunities for Hive in El Salvador.

 2 months ago Reveal Comment

The featured pic on this post caught my attention. 😂

I'm familiar with the flywheel concept from an inbound marketing (content marketing) perspective. Hubspot does an incredible job with it, and they use a flywheel that looks exactly like the one you've posted in some of their content.

Usually, we break those three sections up into different "stages of awareness" during the "buyer's journey."

In the case of ""—our "buyers" would be "new users." And they'd fit into a number of different verticals (developers, end-users, and various specialists).

I've often thought about how Hivers could work together as a community to build out a content structure of helpful information around various topics of interest to the verticals (with pillar pages and proper linking structure) in an effort to rank in search engines and draw new people in.

What do you think?

You hit the nail on the head. Working together.

We are all in the same cooperative here, hence should look for ways to increase the value of other platforms. There is no reason to think in terms of competitions. The more people who are brought into Splinterlands, as an example, the more that can help Leofinance. The more STEM people we have, the better that is for the photography groups.

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The more STEM people we have, the better that is for the photography groups.

And hence, the flywheel approach. 😁

I would imagine that if we just had more Hive Accounts venture out of their comfort zone and experience the Blockchain,that would give us a boost from the inside,as an example if you have a LeoDex or Hive Engine Account you can buy NFT's on the showroom with ease, I would have shopped NFT's sooner had I known how easy it was. I am excited about Hive it's an evolutionary revolution of social media, tokenized communities, Defi etc. We will hit that magic moment naturally, but with the community openly working the marketing on top of the Dapps, will speed up and create a larger platform, Hive is going to be my vehicle to gain real independence!

Ease of use is something that needs a great deal of attention. We made strides in many areas but are lagging in others. We will see how the development goes but I hope they keep ease of use in mind when creating stuff.

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Doesn't it come back to getting more people on Hive by continuing to improve the onboarding process and making it easier then for them to see what apps are available and use them and so on? Not so much for me but many people do a ton of things on their phones, so having more apps developed that are mobile friendly might push the train up the hill a little faster too.

Mobile is an area that is lacking so yes it needs attention.

Hiveonboarding is rather simple these days as is Leofinance. So it is getting easier. We still need the ability to sign up with Facebook and Google accounts since that is what people have.

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@taskmaster4450le, I think it would be way easier to get people over here to Hive if they could just use their Facebook and Google accounts to sign up and login. And then they could have the choice to secure their account by creating keys. Have a great day! 😀

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What a great analogy. It is easy to overlook some of the awesome stuff that Hive has going for it when you are just used to using it every day. The parallel between sign in with Google and just using your Hive account via Keychain to log into any number of sites is pretty awesome. It will be awesome when they have some cross blockchain stuff going on and I can just use my Hive account for pretty much anything!

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Yes it will be awesome if we can put the Hive blockchain in the middle of a lot of stuff. The podcast with @brianoflondon really shows how we can do that. If Hive does become something very important in the podcasting world, that could be the springboard to much greater things.

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Attract, engage and delight customers? That sounds good on the theoretical level. I wish that Hive would be like that practically, but you can see the sad and unfortunate reality. 99% content creators, 1% content consumers. Or even less. Thanks to the automatic curation, many curators does not even see what they curate, so they are not really content consumers.

You're talking about the social part and you aren't having in count the amount of other services that Hive provides, you don't need to post or curate to play SL do you?, you don't need to post to use blocktrades or Dlease and many others.

Yes, there are other services on the Hive blockchain. And probably more will come. But the social part looks like a big failure so far. Some people say that the HF25 will increase the real human interaction on the Hive blockchain. Let us hope that they are right.

What are you comparing the social aspect to?

What barometer are you using?

What is Hive's retention rate compared to other blockchain social media platforms? What is it compared to even the likes of Medium?

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What are you comparing the social aspect to?

What barometer are you using?

Nowadays the average number of comments per post is 2-3, and most of those comments are bot comments.

What is Hive's retention rate compared to other blockchain social media platforms?

I currently do not have any long term experience with any other blockchain based social media platforms. Except the Steem blockchain, which from the Hive blockchain has been forked.

What is it compared to even the likes of Medium?

I do not know.

I think you are missing the gist of what is happening. Do not allow your negativity to slant your views.

But then if you want to hold that outlook, you can but you will not see what is happening.

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I always wish people could be more active on HIVE.

They can be. There is nothing stopping them other than their own decisions.

In the end, they will pay for that.

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Many leave HIVE as they think it is like other social medias at first. Some of them try to produce quality post, but when they don't get the return of the efforts they leave in the end, too.

All this reminds me of my experience in construction where we would work for months to set the base and structure of a house and looked like wasted time when analyzing the visible progress and in just weeks when the walls would take shape everything would make sense and look like a home. Often times the fruits of our work are not hitting us in our face, but the time spent to build up the foundation is definitely worth it. It took me over two years to get to the point of earning anything relevant from my crypto related activity. Some would have probably quit, especially when not having anyone close around to push you forward.

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"It took me 10 years to become an overnight sensation".

How many actors toiled for years before they had the breakthrough role that made them a star?

There are many areas of life, even nature, where the results are not visible.

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I once wrote about how Hive is Decentralized, but a couple of people corrected me, saying it was Centralized and not Decentralized, I still don't understand why.

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Because they dont truly know what it means. They believe that to be decentralized there needs to be thousands of nodes and everyone needs to have the same stake.

It simply is not how things work. POS means those with the stake have more influence than those who do not.

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I never really considered it a flywheel but it does make sense. HIVE is building in all directions so we can definitely see a boost as people see the benefits of staying here.

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Yep going many different directions at one time while also looking like nothing is getting done. This is how it works. Yet when the ball is in motion, it makes it easier to accelerate it. That is what we are seeing with some of the rollouts.

@podping is adding a 5th podcasting host to their system this week. That is 20% growth. Not a great deal but it does pave the way for even more to be added. While they have 5 now (or will soon), they will look to double that next and get 10.

That will increase the value of the system to the bigger entities as they see more smaller ones realizing the benefits to it.

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Pretty much it's the new version of the "funnel" system from a few years ago when that was created. However in this case you get those that went through the funnel to start promoting it on the back end after they have engaged with your product.

What we really need on Hive are other systems/products that do much more than just be a blogging platform and we are starting to get there. Gaming is a popular method but no fee Hive doesn't really benefit from it if anything it becomes a exit point of funds and the selling of hive however they must earn or buy the hive so it does still bring benefits in terms of liquidity and movement.

You are right. We do need to close the loop and create a circular economy where most stays within the ecosystem. As more sinks are build and use cases, hopefully we will see that unfold.

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It would have been better if we had a breakthrough during the bull because it's easier to generate hype and attract people, or maybe Hive will prove me wrong and become very popular during the bear market.

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The market doesnt matter to users or builders. When you have people moving forward no matter what, things will explode regardless of the market.

Look at Priceline's and Amazon's growth rate after the dotcom bubble burst. They were not negatively affected.

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Great information about flywheel