Funnels are Out—Flywheels and AI are Transforming B2B Growth

Why the funnel model is leaking revenue, and how flywheels outperform.

Author

Tyler Morian
May 15, 2025

This week: We explore AI as a powerful co-pilot for marketing teams, why business flywheels outperform leaky funnels, and how market dynamics must shape your strategy. And TK Kader shares how to spot promising AI startup ideas in the current platform shift, with lessons from historical tech shifts. Giddyup!

Impact of Market Dynamics on Marketing Strategy

Is your strategy built for the market you're in, or the market you wish you were in? Ignoring broader category trends leads to costly miscalculations and unrealistic expectations, regardless of tactical excellence.

When opportunities drop or CPO rises, the culprit may be market conditions rather than execution. Liam Moroney highlights how "VC backed SaaS especially, a lot of the massive growth that gets celebrated has been heavily influenced for years by category growth." When that growth slows, maintaining share becomes exponentially harder than riding a rising tide.

For CMOs, this reality dictates whether to focus on capturing existing demand or the more difficult task of stealing share. Moroney argues marketing often over-emphasizes direct response, overlooking powerful market forces that even AI-enhanced demand generation can't overcome. Peep Laja reinforces this by noting 92% of B2B buyers purchase from vendors already on their Day-1 list, underscoring brand's critical role.

BIG IDEA: 🌊 Marketing effectiveness is fundamentally shaped by market dynamics; understanding category trends and your relative position is essential for sustainable growth and realistic target-setting.

WHY IT MATTERS: 🎯 Acknowledging market conditions helps CMOs allocate resources effectively between capitalizing on category growth or the harder work of building brand and stealing share—rather than blaming teams when the overall demand pool shrinks.

Comment insights:

  • Dale W. Harrison emphasizes that growth comes from either capturing your share of organic category growth or taking market share from competitors, each requiring different "marketing muscles."

  • Ryan Paul Gibson adds that "buyers don't think in categories, they think in use cases, workflows and problems," suggesting customer perception is key when assessing market dynamics.

  • James Hankins notes, "In reality overtaking a leading incumbent takes years and years," highlighting the difficulty of stealing market share when category growth slows.

SaaS Growth Strategies & Business Models

Are you building momentum or just chasing leads? Many SaaS businesses mistake activity for progress, failing to develop the interconnected systems that drive sustainable success.

The most effective SaaS growth comes from building reinforcing flywheels. TK Kader explains that companies often face a "flywheel problem," not a growth problem, and outlines five crucial systems: Go-To-Market, Product, Culture, Economics, and the Founder Flywheel. Dev Basu emphasizes that traditional funnels leak leads while flywheels compound demand over time.

Marketing leaders must embrace this systemic view. Rather than focusing solely on acquisition, Basu recommends expanding attention to user activation, account expansion, and win-backs. Even when hiring sales leadership, Jason Lemkin cautions that founders stepping entirely away from sales often see growth stall, highlighting the interconnected nature of successful GTM.

BIG IDEA: 🔄 Sustainable SaaS growth requires building interconnected flywheels across GTM, product, culture and financials—creating compounding momentum rather than one-off wins.

WHY IT MATTERS: 📈 Flywheel-focused organizations align sales and marketing better, improve LTV:CAC ratios, and build more predictable revenue streams compared to those chasing vanity metrics or short-term gains.

Comment insights:

  • Sara Wyman argues many early-stage companies hire VPs too soon, suggesting elevating strong early reps to build playbooks often proves more effective.

  • Robert Kaminski illustrates how "Focus is the ultimate growth lever," contrasting a $100M ARR company succeeding with one use case for one industry against a struggling $5M ARR company pursuing endless use cases.

  • Graham Riley notes how the Founder Flywheel "emphasizes the pivotal role of leadership in accelerating success," reinforcing the need for continued founder involvement.

AI in Marketing, Sales, and Customer Service

Is your team using AI as a thoughtful assistant or an autonomous replacement? The difference determines your ROI and customer experience quality.

AI is transforming B2B tech operations across marketing, sales and service. Teresa Torres recently shared her experiments with LLMs for interview analysis, finding Claude helpful but warning against outsourcing synthesis entirely due to hallucinations. Dharmesh Shah highlights how tools like Google Gemini could revolutionize email search, though current implementations fall short.

For CMOs, AI amplifies team capabilities but requires proper guardrails. Jason M. Lemkin warns that over-reliance leads to "terrible follow-up" and degraded performance without thoughtful implementation. The sweet spot is using AI to augment human skills while maintaining strategic oversight.

BIG IDEA: 💡 AI serves best as a co-pilot for marketing, sales, and service—providing efficiency while humans supply strategic direction and genuine customer connection.

WHY IT MATTERS: ⚠️ Without clear understanding of AI's limitations and integration with human expertise, CMOs risk diluted messaging, poor customer experiences, and diminished ROI on their AI investments.

Comment insights:

  • Tomer Iserovitch notes that current AI models often miss critical details and nuances that human experts catch during interview synthesis.

  • Asia Orangio shares how a founder using ChatGPT for interview analysis received output that was "laughably wrong and watered down."

  • Vidya Narayanan observes that while some Google AI applications excel, others lag significantly, revealing the gap between AI potential and practical application.

Sound Bites

Quick insights from videos and podcasts:

Until next week!