Child Entrepreneur to IKEA Founder
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All adults probably heard or known this famous Swedish furniture company, from the meatballs to the Scandinavian names, then the sleek and minimalistic nordic furniture.
But all the things that made IKEA today have a past and a reason for the company’s branding, marketing, and vision. All thanks to Ingvar Kamprad, IKEA started from its creator’s character and hard work and made IKEA the reflection of Ingvar Kamprad.
So, how did a farm boy from Sweden become the young creator of a multinational corporation?
Ingvar Kamprad’s Humble Beginnings
Ingvar Kamprad was born on March 30, 1926, in Pjätteryd (now part of the Mhult Municipality) in Kronobergs län, in Sweden, and was the son of Feodor Kamprad (1893–1984) and Berta Linnea Matilda Nilsson (1903–1956).
Ingvar's mother was Swedish-born, but his father was born in Germany and moved to Sweden when he was one.
Franzisca ("Fanny") Glatz, Kamprad's paternal grandmother, was born in Radonitz (Radonice), Bohemia, then Austria-Hungary, while Kamprad's paternal grandpa, Achim Erdmann Kamprad, was born in Altenburger Land, Thuringia. In 1896, they moved from Germany to Sweden.
Ingvar Kamprad’s Humble Beginnings
According to family history, Kamprad is a variant of "Kamerade," which means comrade, and is a name that dates back to the 14th century; the Kamprad family became wealthy estate owners in Thuringia in the 19th century. The mother of Achim Kamprad was a distant relative of Paul von Hindenburg.
Achim, the younger son of an estate owner, purchased the largest farm in the region, Elmtaryd (presently standardized Älmtaryd), with 449 hectares of land close to the little community of Agunnaryd (now a part of Ljungby Municipality) in the province of Småland.
Ingvar Kamprad’s home of ancestry, Smaland.
A few years after the birth of Franz Feodor, Achim committed suicide, leaving the property to Franzisca, who eventually passed it on to Franz Feodor. From age six, Ingvar Kamprad resided on the farm with his grandmother, parents, sister, and parents.
Ingvar visited and maintained contact with family members in the Thuringian town of his ancestry.
Primary school education was challenging for Ingvar for reasons unknown during his time. It turns out that Ingvar struggled in school because of his dyslexia.
But what is dyslexia?
Apart from his dyslexia, Ingvar’s father once remarked that Ingvar would never rise to anything since he avoided jobs like milking cows. Ingvar was given an alarm clock for his birthday, and he set it for 5:30 in the morning to ensure everything got done. To be sure Ingvar would get out of bed, his father even took the clock's "off" button.
When he was 14, he attended a boarding school nearby. From 1943 to 1945, Ingvar attended Gothenburg's Handelsinstitut, now known as Hvitfeldtska Gymnasiet.
Ingvar Kamprad’s Early Entrepreneurial Spirit
When Ingvar was a young boy, he realized he was good with numbers and a quick learner. This prompted his entrepreneurial spirit to come to life, and he started to build a business. Circumstances made a smart kid smarter, so he sold matches at age five.
He discovered he could get matches in large quantities for a meager price in Stockholm, sell them individually for a low cost, and earn a significant profit.
By setting low prices, he could help his customers while making a profit for his family. Since Ingvar was always a businessman, he then moved on to selling different merchandise.
Fish were necessary for farmers who did not have fishing rights. It was also essential to have Christmas cards, magazines, and seeds for the garden. To reach as many customers as possible, he rode his mother's bicycle to farms until he earned enough money to buy his own.
Ingvar convinced his father to buy nets instead of fishing when angling for fish didn't bring a big catch. Putting his fishing earnings in a cigar box, he sold the fish he caught and shared the profits with his father.
He maintained a supply of pencils, watches, wallets, and belts under his bed. When he was seven years old, Ingvar began riding his bicycle further away to bring products to neighbors because his classmates also needed them.
When Ingvar was 17 years old, his father handed him a $1,000 bonus for his school achievements.
Ingvar was sympathetic to his family's plight and wished to assist them. Instead of doing farm tasks, he focused on helping the family. His family went against the grain and backed their little match-selling entrepreneur, whether or not his minor contributions made a difference. His father's mother was the first customer of the future IKEA entrepreneur.
First Ventures of Ingvar Kamprad
Ingvar continued his business while attending college. Because he was too young to establish the company he desired, his father provided legal approval and paid the registration price as a graduation present in 1943.
Ingvar created IKEA at the kitchen table of his uncle Ernst. But this 17-year-old future IKEA entrepreneur was not selling furniture... yet.
His future began to form when he realized that success relied on the simplest, most cost-effective distribution from the production to the customer.
However, IKEA didn’t start as how we know IKEA today. Kamprad’s original furniture business began as a mail-order sales business. But pens had issues, so Ingvar saw they didn’t have a future either. Like his match money, he saved to invest in something else.
Kamprad diversified his portfolio by adding furniture in 1948.
Sweden During the Great Depression and WWII
But before we learn what Ingvar Kamprad was up to in the late 1940s, let's take a quick look at what transpired in Sweden in the preceding years.
Like the rest of Europe, Sweden was affected by the Great Depression and the 1930s economic troubles.
The Kreuger Crash aggravated Sweden's economic crisis. However, the Social Democrats' election victory in 1932 signaled the start of a new era, with leaders opting to invest rather than save their way out of the crisis.
The welfare state was created from this, as was the notion of Folkhemmet (literally "the people's home"), in which the state granted subsidized loans to everyone who wished to establish a home.
Simply put, the government invested in its citizens and their homes. The Swedes, who had escaped some of the horrors of World War II, had positive outlooks on the future.
Therefore, the conditions were relatively favorable when young Ingvar Kamprad began selling furniture. Homeownership was important during this time of faith in the future. It was a time when demand for furniture items was growing, and people had some spare cash to make their homes.
An Experiment That Resulted in Better Lifestyles
After the war, Ingvar did a sensible experiment that improved lives–furniture.
The post-war Swedish government had built lots of housing and offered home furnishing loans. Plus, it had many small furniture factories.
When furniture debuted in the 1948 brochure, Ingvar wrote IKEA would offer more if customers showed “reasonable interest.”
So five years after IKEA was founded, the first furniture advertisement appeared in a brochure in 1948. Kamprad began selling low-cost furniture. A few chairs and tables were displayed for the population looking to make their homes more comfortable.
Despite selling crystal jewelry and Argentinian leather briefcases, IKEA's success came from the furniture. People received the new merchandise so well that IKEA focused solely on home furnishings in 1951.
The following brochure included a sofa bed from Elfs Möbler in Älmhult and a crystal chandelier from Örsjö. IKEA sold out all items. Orders were placed by coupon, and factories delivered the goods.
He launched a showroom in Almhult, Sweden, two years later.
Shaping IKEA's Flatpack Idea
The 1953 IKEA catalog introduced three tables, DELFI, RIGA, and KÖKSA. Products assembled at home were the solution that enabled rational distribution and thereby meager retail prices for the customer.
So it was revolutionary when, in the 1950s, IKEA published its catalog offering furniture of good quality at low prices with fast delivery directly from the factory.
It is hard for people today to understand how radically different IKEA was from traditional furniture dealers in the 1950s. If you wanted quality furniture, you had to go into a shop, choose a product, and then wait many weeks or months for delivery.
At the same time, Ingvar Kamprad was starting his brand-new mail-order business, IKEA. He had recently begun switching from selling pens and nylon stockings to furniture and was frustrated by the costly, challenging delivery process. The goods—particularly the tables—were frequently broken in transit.
In 1956, Kamprad added flat-boxed furniture to IKEA's inventory to be built at home.
Triva, a line of flat-pack furniture, was the first to be introduced in Sweden in 1944. Nordiska Kompaniet, better known as NK, a renowned Swedish department store, developed and sold it with little success.
However, IKEA took flatness to the next level, using it as the basis for a revolutionary business model that allowed customers to assemble the furniture themselves.
Ingvar got the idea for flatpacks and customer assembly from a supplier in Hultsfred, Sweden, called Ovendals. They showed him an unusually sturdy table with a new fitting that made assembly easier for the customer.
It marked a turning point.
It is thought that the Thonet chair was the first piece of flatpack furniture. Initially created by Michael Thonet in the eastern part of Czechoslovakia, then Austria-Hungary, it was introduced into the world in the mid-19th century.
However, this chair was packed and shipped in bulk rather than sold directly to private customers. The technique evolved gradually but steadily in the early 20th century, mainly in Central Europe.
The new items decimated shipping and labor expenses and made it easier for buyers to get their purchases home. Because of the small size of the packaged goods, Ingvar could stock them in the sales location rather than in a warehouse. This led to the first IKEA store opening in 1958.
This intelligent approach gave them the advantage of building a global brand in the future. One example is their product organization system.
The Idea of IKEA
Have you ever wondered how IKEA came up with distinctive Swedish names for all their furniture? Ingvar Kamprad, who had dyslexia, made his challenge into a good company internal strategy.
Because Kamprad chose to face his disability, he made a once-challenging part of his life into a stepping stone and became the branding aspect of IKEA.
IKEA is one of the world's leading furniture retailers and is well-known for its distinctive product names. Most of his items were identified by a series of numbers, but Kamprad struggled to recall the codes for each one, which indicated dyslexia.
So, rather than outsourcing those obligations and ignoring the problem, he turned his impairment to his advantage by devising a more inventive method for arranging his products. This became the most recognizable part of his now-global business.
The name IKEA originates from the founder's name, Ingvar Kamprad, followed by Elmtaryd, the family farm where Ingvar was born, and Agunnaryd, the nearby village in Småland where he was raised.
Kamprad constructed a naming system in which he assigned names to each item of furniture. Large furniture, for example, is named after Swedish locations, chairs and desks are named after people, and outdoor furniture is named after Swedish islands. Because most of the names were recognizable to Kamprad, this technique made it easy for him to recall and visualize each product.
The founder’s frugal and efficient way of marketing and selling their furnitures became a win-win situation both to IKEA customers and the IKEA itself. Indeed, Ingvar Kamprad is a marketing legend we can learn from.
IKEA’s Global Growth
IKEA stores followed, initially in Western Europe and then in other parts of the world.
Outside of Sweden, the first stores opened in Norway in 1963 and Denmark in 1969. It was only a matter of time until IKEA swept Europe from there. After a few years, the company established its first store outside Scandinavia.
Over the next decade, IKEA stores popped up worldwide, with crowds lining up for grand openings in nations like Japan, Australia, and Canada. With 53 shops, Germany is IKEA's largest market, followed by the United States with 51. IKEA now has 458 stores in 60 countries.
Ingvar Kamprad’s Other Works
Kamprad was mainly a private guy, yet he had published some important works. He published his frugality and simple principles for the first time in a manifesto titled A Testament of a Furniture Dealer in 1976.
Kamprad also co-authored Leading by Design: The IKEA Story with Swedish writer Bertil Torekull. In the autobiographical book, Kamprad goes into further detail about his views as well as the challenges and successes of starting IKEA.
Ingvar Kamprad’s Legacy
IKEA began selling items on the Internet in 2000, and the firm quickly grew. By 2003, it had amassed such a following that its catalog had the world's most giant yearly print run, and by 2009, it was available in over two dozen languages.
Every IKEA shop has had a café since 1958, which served branded Swedish prepared specialty foods such as meatballs, gravy packages, lingonberry jam, various biscuits and crackers, and salmon and fish roe spread until 2011. Chocolates, meatballs, pickles, pancakes, fish, and other drinks are among the things available under the new name.
In Russia, IKEA owns and manages the MEGA Family Shopping Center network. It also introduced UK IKEA Family Mobile, a virtual mobile phone network based on T-Mobile, on August 8, 2008. It was the cheapest pay-as-you-go network in the UK when it first launched.
IKEA began its foray into the smart home market in 2016. One of the first ranges to highlight this shift was the IKEA TRDFRI smart lighting kit. It has also expanded its product line to include flat-pack houses and apartments to bring down the cost of a first-time home for a first-time buyer.
Kamprad’s Investments and Collaborations
Ingvar Kamprad (aka ING + KA) owns INGKA Holding, the parent company for all IKEA stores. The Dutch Stichting INGKA Foundation was established in memory of him.
In May 2006, the Economist reported that the foundation was the world's wealthiest charity.
Despite this, the Bill & Melinda Gates Foundation has grown. While it has a large endowment, IKEA's primary purpose is to minimize corporate taxes and protect itself against takeovers. Ingvar Kamprad served as the foundation's chairman.
Kamprad’s Awards and Recognition
The IKEA founder, Ingvar Kamprad received the following awards:
- H. M. the King's Medal (H.M. Konungens medalj)
- The Royal Order of Vasa (Kungliga Vasaorden)
- The Swedish Academy of Engineering's gold medal (Ingenjörsvetenskapsakademiens stora guldmedaljen)
- Ingvar Kamprad Life time Achievment Award 2010
Kamprad was also listed among the world's wealthiest people in a 2004 article in the Swedish business weekly Veckans Affärer. According to this report, he owned the entire company, an assumption that IKEA and the Kamprad family rejected.
INGKA Holding and Stichting INGKA Foundation held most of the shares, but Kamprad retained a relatively limited degree of control over the company.
As of March 2010, Forbes magazine ranked Kamprad as the eleventh richest person in the world with a fortune of US$23 billion.
After his lawyers proved that IKEA is owned by the foundation he established and heads in Liechtenstein, he dropped to 162nd.
Although his net worth dropped, he retained his billionaire status.
As of June 2015, Kamprad was ranked eighth in the Bloomberg Billionaires Index for having a net worth estimated at $58.7 billion. According to Forbes, Kamprad's net worth as of March 2015 was $3.5 billion.
Kamprad again dropped off the Forbes billionaires list in 2016 due to transferring his assets to his sons Peter, Mathias, and Jonas, who are all billionaires.
Mathias Kamprad replaced Per Ludvigsson as chairman of Inter IKEA Holding SA in June 2013 after Ingvar Kamprad resigned from the board. In the days following his retirement, IKEA's then-87-year-old founder defined,
Mathias' two older brothers, who have also held senior positions at IKEA, work on the company's long-term vision and strategy.
Kamprad brothers hold Ikano Group, a $9.1 billion conglomerate with interests in real estate, finance, insurance, and retail that was initially a subsidiary of Ikea but is now autonomous. However, it still owns eight Ikea branches.
Despite the pandemic, IKEA continues to expand. Job postings have grown by over 200 percent since May. 422 IKEA stores are operating worldwide in 50 countries as of March 2021, with a net worth of more than $1 billion and over 15000 employees.
Personal Life of Ingvar Kamprad
Ingvar married his first wife, Kerstin Wadling. The couple then later adopted a daughter, Annika.
Ingvar Kamprad married Margaretha Kamprad-Stennert (1940-2011), his second wife, in the 1960s. He first met her when she was twenty years old. They had three sons: Mathias, Peter, and Jonas.
Ingvar lived in Épalinges, Switzerland, from 1976 to 2014. He returned to Sweden in March 2014 after nearly forty years away.
Kamprad became an alcoholic while working with furniture manufacturers in Poland early in his career. He said in 2004 that he had control over his drinking. According to the New York Times, Ingvar Kamprad managed it by drying out three times a year
According to an interview conducted in 2006, Kamprad drove his 1993 Volvo 240 for two decades, flew economy class, and urged employees to use both sides on all documents.
According to stories, he reused tea bags and was known to save restaurant salt and pepper packets. Kamprad was renowned for his frugal habits, purchasing gifts and wrapping paper in the after-Christmas sales and going to IKEA for a "cheap meal."
The company he started is still famous for its focus on cost efficiency, operational details, and ongoing product development, which allowed it to reduce costs by an average of 2-3% in the ten years leading up to 2010 while continuing its international expansion.
In his book Testament of a Furniture Dealer, Kamprad expresses his social philosophy as described in the following:
Ingvar Kamprad had an estate in Sweden, a sizable residence in Switzerland, and a vineyard in Provence, France. For a while, Kamprad was a Porsche driver.
The Ikano Group, which owns a sizable minority stake in IKEA valued at US$1.5 billion, was established by Kamprad with his sons as its sole successors. He intended to give roughly $300,000 to his adopted daughter Annika.
At 91, Kamprad passed away from pneumonia at his home in Småland, Sweden, on January 27, 2018. Following his will, Kamprad left half of his estate to projects in Norrland, a lightly populated region of Sweden.
According to reports, Kamprad planned to expand Norrland and make it a place where young people might reside.
Key Takeaway: Ingvar Kamprad
Kamprad has established a profitable heritage in the worldwide retail corporation specializing in furniture. His accomplishments and legacy have served as an inspiration to aspiring entrepreneurs worldwide. Here are a few business concepts and lessons that entrepreneurs can learn.
1. Developing a Customer-Oriented Firm Objective
Entrepreneurs often start a business with a brilliant idea and invest most of their time and money before recognizing that they may diverge from their consumers' needs. You must build your services and products around your potential customers' problems to grow your business successfully.
You must also provide them with practical answers that they seek. Kamprad committed himself to delivering high-quality, well-functioning items, a major factor in IKEA's international success.
2. To Be Current, You Must Constantly Reinvent Yourself
Ingvar changed or revised product lines frequently throughout IKEA's history. Frequently revisiting your vision will give it new life and realignment, just like your financial plan will.
3. With Entrepreneurship, Age is Unimportant
Kamprad, who grew up in poverty, began his career by selling matches for a profit at five. He developed his company by selling Christmas decorations, fish, and pencils at ten while cycling around his neighborhood. He registered the company after receiving a monetary present from his father when he was 17, and it has since grown into the empire it is today.
Kamprad, regardless of age, had the desire to succeed (even if he couldn't drive). It should motivate many entrepreneurs today, whether they are 8 or 80 years old, to never regard their age as a reason they can't or shouldn't achieve something.
Without question, Kamprad's legacy will live on. It’s an honor to have been a part of his business path and seen the influence he has on our planet. He was crystal clear about what he wanted to accomplish: