A Flywheel is basically a machine that stores rotational energy. Usually, when you add energy to a flywheel, it literally starts to spin and if you add more energy, it spins faster. Unlike a funnel, Where the only way to maintain a constant speed is to keep adding stuff to it. A flywheel will keep spinning unless some other force comes along and slow it down.
From a business perspective, the rotation of the flywheel represents the growth of your business and the happy customers provide the energy that fuels that growth. Either because they buy from you again or because they bring new customers to you by promoting your product to other people in their network.
But if you produce unhappy customers, either by selling to people who are a bad fit for your offering or by overpromising and under delivering, they will work against your flywheel.