The founder of Ikea was one of the richest men on the planet, but his most famous trick is available to everyone

You may like Ikea more or less, but I don’t think there are many doubts about the success that the company has had throughout its history. One figure was key in his rise. His founder, Ingvar Kamprad, was a different man of his time. The businessman died with billions of dollars in his account and, however, the key that led him to success and that he strictly followed throughout his life was very simple. Hint: never spend more than necessary.

Ingvar Kamprad before Ikea. When you imagine the guy who built the Ikea empire, you may think of someone who lived a dream life that very few can achieve. However, if the company is what it is today, it is partly because Kamprad was the complete opposite of those stereotypes. Despite his wealth, he was known for your most frugal habits.

Born in Sweden in 1926, his beginnings as a “businessman” began very early. At the age of five he sold matches, and at ten he dedicated himself to selling bikes, fish or even Christmas decorations to his neighbors. At the age of 17 he created Ikea with the money his father gave him for his good grades. Of course, he didn’t sell furniture then, just small utensils for the house.

Kamprad in 1965

Ikea is getting older. It happened in 1956, when Kamprad revolutionized the market and the furniture industry itself with the introduction of flat boxes with furniture to assemble at home. Yes, this began a way of selling the product that has continued to this day and that reduced the company’s costs in exchange for the consumer doing the other part of the work: assembling the furniture.

The founder achieved such success that he became one of the richest men on the planet. In fact, when he died in 2018 he was eighth on the world list and had a estimated net worth of 58 billion of dollars. However, if you had met him in life, you would not have thought that you were dealing with a billionaire.

Kamprad’s life hack. Talking about the secret of the success of a company like Ikea in an article is nothing short of an act of faith. Surely it is better understood in a book and in a more relaxed way, but we can understand some keys through the figure of its founder. And Kamprad insisted on one thing: saving, and he carried that maxim every day of his life. “Everything we earn we need as a reserve,” He said.

For example, the man was known for flying economy class, staying in budget hotels, or drive a Volvo 240 GL of 93 that lasted 20 years. In fact, he only left it when he was convinced it was dangerous. Kamprad said that he learned to be prudent with money in the small town in southern Sweden where he grew up: “it is in Smaland’s nature to be thrifty.” Example of this it happened in 2014when he returned to Sweden after 40 years of tax exile with clothes “bought only in flea markets.”

The haircut anecdote. In the year 2008, The guardian told a scene which said a lot about the businessman’s personality. Apparently, after paying around 22 euros for a haircut in the Netherlands, he said the price was too high for his usual haircut budget, “I usually try to get a haircut when I’m in a developing country. The last time was in Vietnam,” he even said.

The philosophy of life, to the company. These habits not only represented the beginning of Kamprad’s personal philosophy towards consumerism, but were also to serve as a model for his employees. He New York Times detailed that low-cost flights, meals and hotel stays were initiatives that he promoted among executives.

In fact, in 1976 he distributed what was called “Testament of a furniture dealer“, a booklet with guidelines that Ikea employees have followed since then. In it, he details parts of his frugal philosophy, stating that “wasting resources is a mortal sin at Ikea.”

His inheritance, his legacy. Decades before his death, Kamprad had placed ownership of the Ikea brand in a complex network of foundations and holding companies. However, these assets were not transmitted to his heirs. Apparently, the Stichting Ingka Foundation, a Dutch entity whose stated purpose is to donate to charities and “support innovation” in design, controls most of the Ikea stores.

In addition, the Interogo Foundation owns the rights to the brand and controls global franchises through a subsidiary. This foundation is managed by a board in which members of the Kamprad family have minority control. That is, the heirs retained some of the wealth and control, but the majority of their fortune is held in charitable trusts. A complicated structure as a result of his desire to preserve Ikea’s unique culture and ensure its long-term survival.

Why Ikea. Before finishing this small collection of stories about the man who founded the most famous furniture company, a secret that many do not know. Why is it called Ikea? This is an acronym of the initials of Kamprad’s first and last name, and the initials of the name of the family farm where he was born (Elmtaryd) and the nearest town (Agunnaryd).

Image | Ikea, Haparanda Midnight Ministerial, Public domain

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