Billionaire Lessons from Ingvar Kamprad (from farmer to IKEA billionaire)

Today we're going to look at how a farm boy whose father told him that he would never make anything of himself used money his parents gave him for doing well at school to create his own little business. He named the company IKEA. This is the story of Ingvar Kamprad, one of the richest people in the world, and the top 3 lessons that you can learn from his success. (Evan Carmichel)


What is good for our customers is also, in the long run, good for us." - Ingvar Kamprad

Ingvar Kamprad (born 30 March 1926) was born in a small farming village in Switzerland where his grandfather had killed himself with a gun when he realized that he couldn't pay the mortgage on their family farm. Kamprad's grandmother then father kept the business going and his father frequently told him that he would never make anything of himself.

Determined to prove his father wrong, Kamprad woke up every morning at 5:50am by removing the 'off' button on his alarm clock. He then focused his efforts on his school work and was going to achieve until he made his father proud. After a particularly stellar year, his father gave him a cash reward as recognition for a job well done.

Kamprad used the money to start his own little business, a company he named IKEA. The name was a combination of Kamprad’s initials (I.K.) and the first letters of the farm and the village where he had grown up, Elmtaryd and Agunnaryd. He started off bidding for contracts to supply pencils and slowly expanded his business.

Today, IKEA has over 125,000 employees and Kamprad is the eleventh wealthiest person in the world, according to Forbes magazine, with an estimated net worth of US$23 billion.

Action Item #1: Build Around Your Customers

Too many entrepreneurs think they have a "great" idea and spend all their money and time developing it only to find out that customers don't want it. One of the best ways to ensure your success is to talk with potential customers, build your products and services around their problems, and give them practical solutions that they will pay for.

From the day he founded IKEA, Kamprad has been dedicated to providing good quality and well functioning products at low prices. This has been one of the key driving forces behind IKEA’s international success and the company hires its own designers, many of whom have gone on to win design awards over the years.

According to Kamprad: “To design a desk which may cost $1,000 is easy for a furniture designer, but to design a functional and good desk which shall cost $50 can only be done by the very best... We have decided once and for all to side with the many... What is good for our customers is also, in the long run, good for us.”

Action Item #2: Lead by Example

If you're building your business beyond yourself then you'll have to think about your leadership style and how you are going to inspire those working for you to give their best every day.

Kamprad believed that the best way to encourage hard work and a strong character in others was to exemplify that in his own life. Even though he's worth billions of dollars he still drives a 13 year old Volvo, often takes public transportation in Switzerland, doesn't have his own private office, and regularly flies economy class when traveling out of town.

According to Kamprad: “I’m a bit tight with money, but so what? I look at the money I’m about to spend on myself and ask myself if IKEA’s customers can afford it... I could regularly travel first class, but having money in abundance doesn’t seem like a good reason to waste it.. If there is such a thing as good leadership, it is to give a good example. I have to do so for all the IKEA employees.”

Action Item #3: Never Waste Your Time

You only have so many hours in a day to get work done and to accomplish your goals. Don't waste them! Every little step that you take to build your business will add up to big movements forward but you have to put the time in to turn your vision into reality.

Kamprad’s frugality is matched only by his desire to never waste his time. To that end he has built the IKEA corporate philosophy around efficiency and hard work. IKEA has always kept few layers of management, practically eliminated titles and privileges, and has almost no suits and ties in the office.

According to Kamprad: “Time is your most important resource. You can do so much in ten minutes. Ten minutes, once gone, are gone for good. Ten minutes are not just one-sixth of your hourly pay. Ten minutes are a piece of yourself. Divide your life into ten-minute units and sacrifice as few of them as possible in meaningless activity."

True Story

Kamprad has always been a fan of turning mistakes into opportunities. In 1956 a new IKEA employee had been standing with a colleague, trying to figure out how to get a bulky wooden table into the back of his car. Finally, against company policy, he said, “Oh God, then, let’s pull off the legs and put them underneath.” It was with that simple idea that IKEA would reorient itself towards the flat design production for which it has become famous today.

Quotes

"Waste of resources is a mortal sin at IKEA."

"Only those who are asleep make no mistakes."

"IKEA is not completely perfect. It irritates me to death to hear it said that IKEA is the best company in the world. We are going the right way to becoming it, for sure, but we are not there yet."