When is now the best time to learn how to ask great questions? Better questions that will allow you to set your business apart from the herd? Today, I invite you to discover new ways to look at your business by sharing a personal entrepreneurial story with you.

As a 10-year-old boy, I produced tin soldiers that I sold to my family, relatives and neighbors. My first entrepreneurial experience as a tin soldier producer resulted in the following financial figures: Tin soldiers sold for 5 Deutschmarks, and after deduction of the cost for the input materials, I could pocket a net profit of 3 Deutschmarks per tin soldier. The production time for one colored tin soldier was one day. This meant that as a tin soldier producer, I could have earned a maximum annual profit of 1,100 Deutschmarks, but only if I used all my time for nothing other than producing tin soldiers every day and thus neglecting my school obligations and sacrificing my playtime. In addition, the calculation did not factor in the immense pressure on tin soldier prices and profit margins from the intense competition between all the tin soldier manufacturers in my village (since all of my friends were also producing tin soldiers and focused on the same neighborhood as their target market).

Looking at this situation, it becomes obvious that this was not a particularly good business. In order to get some ideas for improving the competitive situation, a tin soldier producer could ask the following questions:

• How can I increase the efficiency of my tin soldier production process?

• How can I reduce the cost of tin soldier production?

• How can I increase the quality standards of my tin soldiers?

• How can I sell more tin soldiers than the other tin soldier producers?

• How can I market tin soldiers in a more attractive way?

• How can I create more demand for my tin soldiers?

• How can I extend my tin soldiers to other markets?

• How can I corner the tin soldier market?

• How can I force competing tin soldier producers out of the market?

All of these questions may sound very familiar to your personal business situation once you eliminate the word ‘tin soldier’ out of each question above (or replace it with the word ‘product’). And all of these questions focus on ways to more efficiently exploit an old value, which was the dominant business strategy in the last decades of the 20th century. However, “we are entering the era of Ideanomics” (Peter Drucker), where the creation of new, meaningful value through creativity and innovation is the name of the game. So what are better questions for businesses to ask in the rapidly changing business environment of the early 21st century, the New Age of Value Creation? Let’s revisit our tin soldier producer metaphor:

In the tin soldier business, you start making real money if you are the producer of the molds. Thus, one is tempted to ask questions such as “How can we create a better mold?” or “How can we design more attractive tin soldiers?” However, a list of really great questions that players in the tin soldier business should ask reads as follows:

• How do you start to create VALUE in the tin soldier business? And: What is the VALUE of tin soldiers anyway in the 21st century?

• What business am I really in? The tin soldier production business? The toy business? The children’s entertainment business? The history business? The imagination business?

• What are the future trends in the business that I am really in?

• How can I create a new, valuable product or service that satisfies an unmet need?

• How can I create a unique customer experience?

• How can I make customers’ dreams come true?

• What new business model allows me to market my new value in a novel way?

• What strategic partnerships or network solutions allow me to multiply my new value?

• How can I magnify the image of my brand or company?

Unlike before, the new list of questions directs attention to ways to create a new value and then to leverage that value through multiplication or magnification. This new set of refocused questions forces you to shift your perspectives onto what is needed to create value and then generate ideas and look for novel solutions to deliver this meaningful value to the market.

An example of a company whose phenomenal success story can be linked to one of the questions listed above is YouTube. First, YouTube created an innovative online video-sharing service that met an unsatisfied greater need. Thereafter, YouTube leveraged their new value proposition (essentially a Business-to-Consumer (B2C) solution) through network multiplication over the internet. In less than 20 months after securing funding from a venture capital firm and some angel investors and the set-up of their venture, the YouTube founders Chen and Hurley became multi-millionaires because they asked and entertained the right kind of questions. Their value-creating and globally leveraged business idea was named “Invention of the Year 2006” by Time Magazine.

Lesson: As consumers rule in the Age of Value Creation, learn from the YouTube founders and from our smart tin soldier producers to ask better questions that focus on value creation and value leverage.

© Dr. Detlef Reis 2008. This article was published in parallel in the Bangkok Post under the same title on 18 December 2008.