See This Guy: Ingvar Kamprad

Ikea

 


Do you have a BILLY bookcase in your living room (there's one sold every 10 seconds)? How about a LUNDSKÄR bathroom faucet?

Yes, the product names at IKEA are strange, incomprehensible and sometimes pretty damn funny (a wine opener called Groggy?).

But for all the strange-soundingness, there’s a logic behind the item names in the iconic furniture store: its founder, Ingvar Kamprad, is dyslexic and had severe problems trying to recall product numbers. So he decided to use memorable names and words instead, and it became one of IKEA’s defining practices.

So bedroom furniture is named after places in Norway. Fabrics and curtains? Women’s names. Kid’s items are names of mammals and birds.

And its this kind of creative problem solving that made Ingvar one of the wealthiest men on earth. In fact, he would prove time and again that creativity could not only solve problems; it could build an empire.

But it wasn’t an easy road to 700 million customers a year.

As a child in Sweden, his grandfather committed suicide when his company was on the verge of bankruptcy. And it was his grandmother who taught him to use willpower and perseverance to overcome difficulties.

His dyslexia prevented him from learning to read until he was nearly a teenager. And an academic career wasn’t really in his plans anyway, as entrepreneurship was his real school.

In the field of business, I guess I was a little different from the others, as I has started to show business activity very early. I still remember the pleasant sensation experienced by receiving my first profit. At the time, I was no more than five years.

His aunt helped him buy 100 boxes of matches, which he resold at a markup (is it me, or is it odd that a kid in kindergarten was selling flammables?).

He also bought pencils and Christmas cards in bulk and resold them to classmates.

At age 17, Ingvar borrowed a small sum from his father to open a store which sold everything from pens to matches (man, he loved those matches). And to attract customers to the store opening, he offered free coffee and a bun. 1,000 people showed up and it nearly bankrupted him. Wisely, he decided to sell coffee and buns in IKEA, another staple of the store.

After five years of stable profits, lightning struck, in the form of a competitor’s ad:

Guimars Fabriker from Alvesta, who was my main competitor, has been selling furniture in Kagnuit for a long time. I saw his ad in an agricultural newspaper and also decided to try my hand in the business. Thus, furniture sale, which I started by chance, and solely in order to outdo my competitors, has determined my fate.

Yes, the company that now uses 1% of the world’s commercial wood supply for its wares, began selling furniture because of its founder’s competitive ire was raised. He thought he could sell chairs and household items better than anyone else. 

He was right.

Since furniture was a luxury in 1950’s Sweden, his idea was simple: sell inexpensive yet stylish goods. And when the Swedish furniture industry used its muscle to prevent wood suppliers from selling to IKEA, Ingvar sourced wood from Eastern Europe. Which meant he could lower his prices still and attract more business/

He created stylish mail catalogues to promote his furniture. And a few years later, he opened the first IKEA “superstore”

And within a few more years, the IKEA formula was fully developed:

build huge stores where land was cheap (with room for a spacious parking lot), design and sell ready-to-assemble flat-pack items (Ingvar thought that people would actually like the challenge and satisfaction of putting cabinets and sofas together) and include easy-to-understand assembly instructions (ok, that might still need some work).

Despite his stature as a multi-billionaire, he so unimpressed by his wealth that he flies coach, stays in cheap hotels, drives a 20-year-old Volvo recycles tea bags (!) and waits until after the holidays to buy on-sale items.

Hey. sometimes brilliance comes with an ounce of eccentricity. A desk lamp named MILF? We’ll definitely take one of those, Ingvar.

John Lavallo57 Posts

John is Columbia Business School MBA with expertise in marketing, business leadership, and law. John is a successful entrepreneur who took his first company public. He currently resides in New York City.