The Dark History of Ikea

Summary

Ingvar Kamprad, a dyslexic farm boy from Småland, Sweden, began his entrepreneurial journey at five by selling matchsticks. His business acumen expanded into various products and eventually led to founding IKEA in 1943. Focusing on affordable, quality furniture, IKEA revolutionized the industry with flat-pack designs. Despite early skepticism, IKEA's commitment to innovation, sustainability, and social responsibility has made it the world's largest furniture retailer, with a presence in nearly every home.

Takeaways

• 🔥 Ingvar Kamprad started his entrepreneurial journey at the age of five by selling matchsticks in 1931.
• 🌱 Born in 1926 in Småland, Sweden, Ingvar's family farm was in an area known for its hardworking and financially creative residents.
• 🚲 Kamprad expanded his business using his mother's bicycle to sell various products to neighboring farms.
• 🏫 Despite attending boarding school, Ingvar continued his business ventures, selling items like wallets and watches to his classmates.
• 💼 In 1943, at the age of 17, Ingvar founded IKEA with a registration fee gifted by his father.
• 📚 IKEA initially operated as a mail-order service selling household goods, and later expanded to include furniture as its main product.
• 🛋️ The introduction of the flatpack furniture design by IKEA employee Gillis Lundgren revolutionized the furniture industry by making products easier and cheaper to transport.
• 🌐 Facing boycotts from manufacturers, IKEA took control of its production process, designing, producing, and flat-packing its own furniture.
• 🌳 IKEA's commitment to reinvesting profits into operations and charitable endeavors has been a key to its success.
• 🌍 The company expanded globally, with its first store outside Scandinavia opening in Sydney in 1973.
• 🏢 IKEA's dedication to quality, affordability, and societal betterment has endeared it to consumers worldwide.

Q & A

How old was Ingvar Kamprad when he started selling matchsticks?

Ingvar Kamprad was five years old when he started selling matchsticks.

What was the initial business model of IKEA?

IKEA initially operated as a mail-order service, selling a variety of household goods through brochures.

What was the first product that IKEA sold?

The first product that Ingvar Kamprad sold was matchsticks, which he repackaged and sold to his neighbors.

How did Ingvar Kamprad expand his business during his childhood?

Ingvar expanded his business by cycling to neighboring farms to sell a variety of products like magazines, Christmas cards, vegetable seeds, and fish.

What was the significance of the graduation gift Ingvar Kamprad received?

The graduation gift Ingvar received was significant because it covered the registration fee for him to officially found IKEA.

When did IKEA release its first catalog?

IKEA released its first catalog in 1951, with furniture becoming the main attraction.

Who was the IKEA employee that came up with the idea of flatpack furniture?

Gillis Lundgren, an IKEA employee and furniture designer, was the one who came up with the idea of flatpack furniture.

What was the first IKEA product to be sold in flatpack format?

The first IKEA product to be sold in flatpack format was the Lövbacken table, known at the time as the Lövet.

How did IKEA respond to the boycotts from manufacturers?

IKEA responded to the boycotts by starting to design, produce, showcase, and flat-pack all of their own furniture in-house.

When did IKEA first expand outside of Scandinavia?

IKEA first expanded outside of Scandinavia in 1973, with stores opening in locations such as Sydney and Hong Kong.

What is one of the core principles of IKEA's success?

One of the core principles of IKEA's success is its penchant for reinvesting profits into its operations or branching out to more charitable endeavors.

Outlines

00:00

🔥 The Early Years of IKEA's Founder

Ingvar Kamprad, the founder of IKEA, started his entrepreneurial journey at the age of five by selling matchsticks. Born in 1926 in Småland, Sweden, he showed an enterprising spirit from a young age. His business expanded to selling various products from a mobile store on his mother's bicycle. Kamprad's business acumen was evident as he reinvested profits and even convinced his father to upgrade their fishing nets to increase sales. Despite attending boarding school away from home, he continued his business by selling items to classmates. His ambition grew, and with a graduation gift from his father, he founded IKEA in 1943, initially as a mail-order service selling household goods. The business model focused on low prices and rural accessibility, and by 1951, furniture became IKEA's main product, with the first showroom opening in Älmhult, Sweden.

05:03

🌐 IKEA's Global Expansion and Innovations

IKEA faced skepticism due to its low prices, but Kamprad opened the first showroom to demonstrate the quality of IKEA's furniture. The introduction of flatpack furniture by employee Gillis Lundgren in 1956 revolutionized the furniture industry, making IKEA's products easier and more cost-effective to transport. Kamprad's response to a boycott by manufacturers was to bring production in-house, ensuring quality and low prices. IKEA expanded globally, with stores opening in various countries and a significant presence in America by 1985. The company's success is attributed to reinvesting profits, charitable endeavors, and addressing social issues like the climate crisis. IKEA has also shown dedication to society by shutting down all Russian locations after the invasion of Ukraine. The brand has become a staple in many households worldwide, offering a range of products from meatballs to furniture, and continues to focus on design and sustainability.

Keywords

💡Ingvar Kamprad

Ingvar Kamprad is the founder of IKEA, a Swedish businessman born in 1926. He is central to the video's narrative as his entrepreneurial spirit and innovative ideas led to the creation of the world's largest furniture retailer. The video traces his journey from selling matchsticks at the age of five to establishing IKEA, illustrating his role as a driving force behind the company's success.

💡IKEA

IKEA is a global furniture and home goods retailer, founded by Ingvar Kamprad. The company's name is an acronym derived from the founder's initials, the farm where he grew up, and the nearby town. The video emphasizes IKEA's evolution from a small mail-order business to a multinational corporation, highlighting its affordable, accessible furniture and innovative flat-pack design.

💡Flat-pack

Flat-pack refers to the design of IKEA's furniture, which allows it to be shipped in a disassembled and compact form, making it easier and more cost-effective to transport. The video mentions the flat-pack design as a key innovation that helped IKEA stand out in the market, with the Lövbacken table being the first example of this approach.

💡Småland

Småland is a region in southern Sweden where Ingvar Kamprad was born and raised. The video describes the region as one that produced more stone than crops, which may have influenced the financial creativity of its residents, including Kamprad's early business ventures.

💡Entrepreneurial Spirit

The entrepreneurial spirit refers to the drive and innovative mindset that Ingvar Kamprad displayed from a young age, which is a central theme of the video. His ventures, starting with selling matchsticks and expanding to a mobile store, exemplify the entrepreneurial spirit that would later define IKEA's approach to business.

💡Mail-order Service

A mail-order service is a business model where products are ordered through catalogs and delivered to customers' homes. IKEA initially operated as a mail-order service, using brochures to display its products. This approach allowed IKEA to reach rural customers and lay the foundation for its future expansion.

💡Catalog

The IKEA catalog is a comprehensive product brochure that the company uses to showcase its offerings. The video mentions the first catalog released in 1951, which played a significant role in IKEA's marketing strategy, allowing customers to browse and order items from the comfort of their homes.

💡Boycott

A boycott refers to the act of withdrawing business from a company or country as a form of protest. The video recounts how IKEA faced boycotts from manufacturers due to its low prices, prompting the company to take control of its production process and ensure the continued supply of affordable furniture.

💡In-house Production

In-house production means that a company manufactures its own products rather than outsourcing them. IKEA adopted in-house production as a response to the boycotts it faced, allowing it to maintain control over quality and pricing while ensuring a steady supply of products.

💡Expansion

Expansion in the context of the video refers to IKEA's growth from its origins in Sweden to a global presence. The company's approach to entering new markets and its ability to adapt to different cultures and customer needs are highlighted as key factors in its success.

💡Sustainability

Sustainability is the ability to maintain a process or state in the long term, often referring to environmental responsibility. IKEA's commitment to sustainability is underscored in the video, with the company pledging to be climate positive and investing in renewable energy, reflecting its dedication to ethical business practices.

Highlights

A five-year-old Swedish boy started selling matchsticks in 1931, which would later lead to the foundation of the world's largest furniture retailer.

Ingvar Kamprad was born in 1926 in Småland, Sweden, and showed entrepreneurial spirit from a young age.

At five, Ingvar began repackaging and selling matches, setting aside profits to reinvest.

Ingvar's business expanded to a mobile store operated from his mother's bicycle, selling various products.

He upgraded to his own bicycle and expanded sales, including larger fishing nets for more fish sales.

Boarding school provided a new customer base, and Ingvar sold wallets, pens, belts, and watches.

Ingvar decided to own and operate his own firm after completing his education.

IKEA was founded in 1943 with a registration fee covered by his father as a graduation gift.

IKEA initially operated as a mail-order service selling household goods at low prices.

Ingvar discovered a high demand for affordable, reliable furniture through consumer feedback.

IKEA's first catalog in 1951 featured furniture as its main product.

IKEA faced skepticism due to low prices, leading to the opening of the first showroom in Älmhult, Sweden.

The first brick and mortar IKEA store opened in 1958, selling furniture in whole.

IKEA employee Gillis Lundgren invented flatpack furniture, making transportation easier.

IKEA faced boycotts from manufacturers but responded by producing their own furniture in-house.

IKEA expanded globally, opening stores in Sydney and Hong Kong in 1973.

IKEA's first American store opened in Philadelphia in 1985.

IKEA's corporate structure focuses on reinvesting profits into operations or charitable endeavors.

IKEA is committed to sustainability, pledging to be climate positive by the end of the decade.

IKEA's dedication to quality, affordability, and societal betterment has endeared it to consumers worldwide.

Transcripts

In 1931, a five-year-old Swedish boy began selling  matchsticks to his neighbors. Twelve years later,  

that boy would go on to found what would become  the world’s largest furniture retailer. This is  

the story of how the creations of a dyslexic farm  boy became a part of every home in the world.  

Ingvar Kamprad was born in 1926 on his  family farm near Agunnaryd in Småland,  

Sweden. The farm was located in an area that  was known to produce more stone than crop,  

and whose residents were known to be rather  financially creative. Like them, young Ingvar was  

overcome with an enterprising spirit that would  ensure that his family would not need to rely  

on the scant crop yield to survive. At just five  years old, Ingvar began repackaging and selling  

matches that his aunt would buy in bulk in the  city. With each small profit made, he would set  

aside some money to reinvest into his operations. A few short years later, Ingvar’s business had  

expanded into a mobile store, based out  of his mother’s bicycle. He would cycle to  

the neighboring farms providing a variety of  products from magazines and Christmas cards,  

to vegetable seeds and fish caught on the family  boat. Soon enough, he had made a sufficient  

amount of money to replace his mother’s bike  with one of his own; but Ingvar never lost  

sight of the bigger picture. Why stop at a  bicycle, when he was building a business?  

With a mind made for commerce, Ingvar convinced  his father to upgrade the fishing nets used on  

the boat to larger ones, allowing them to catch  more fish, and in turn allowing Ingvar to sell  

more. More sales meant more money, which meant  more expenditure to fund his future endeavors.  

Even the confines of boarding school, away  from his customers on the farms of Agunnaryd,  

did not stifle Ingvar’s enterprising nature.  A new environment simply meant new customers,  

and customers needed products. So  armed with an array of wallets,  

pens, belts, and watches purchased with the  savings made from his previous endeavors,  

Ingvar arranged a selection of products that  would turn his classmates into customers.  

His time at school would prove to be  enlightening, for by the time Ingvar  

completed his education three years later, he  had a greater ambition than to cycle around the  

farmlands selling fish and seeds, and a well  placed graduation gift would see this ambition  

through. Ingvar had decided that he would own  and operate his own firm, an official form of  

the businesses he’d been running throughout his  childhood. And so, in 1943, with a registration  

fee covered as a gift from his father,  seventeen-year-old Ingvar Kamprad founded IKEA.  

Named for the town closest to his childhood  home, the family farm, and his own initials,  

Ingvar Kamprad’s IKEA began as a fully-realized  version of his childhood exploits. Originally,  

IKEA functioned as a mail-order service operating  out of a rented milk van. It could be accessed  

through brochures that detailed a selection of  products initially confined to household goods.  

Things like pens and watches, which Ingvar  had sold as a teenager in boarding school,  

to new items such as picture frames and  jewelry. The main draw of the items was  

their low price and the accessibility of it all,  with the early dealings of IKEA focusing on the  

rural towns that Ingvar was more familiar with. With time, the brochure would expand to include  

a larger variety of items. With each new  addition, Ingvar would rely on consumer  

feedback to dictate product stocks. Unpopular  items would be reduced and eventually removed,  

while items that were in demand would garner more  stock. Through this form of market research, in  

1948 Ingwar discovered that people really wanted  to buy furniture. Better yet, people wanted to  

buy accessible, affordable, reliable furniture. By  the time IKEA released its first catalog in 1951,  

furniture had become their main draw. It has to be noted that in its early days,  

IKEA was met with some skepticism. Potential  customers who had yet to purchase any products  

themselves were hesitant to believe that such  good prices could be attached to furniture of  

any acceptable quality. Surely, the low price  pointed to an equally poor quality. To ward off  

this belief, confident that once people came  in contact with the furniture for themselves,  

they would be convinced of its condition,  Ingvar took the next step to building the  

iconic furniture giant as we know it today;  he opened the very first IKEA showroom in  

an old workshop in Älmhult, Sweden. Five years  later, In 1958, Ingvar would open the doors to  

the very first brick and mortar IKEA store. In the beginning, IKEA, much like any other  

furniture store, sold their products whole.  While their furniture was stylish and affordable,  

it was still as bulky and inconvenient to ship  as any other furniture. It would be furniture  

designer Gillis Lundgren, one of IKEA’s earlier  employees, who would solve the issue with one  

simple solution. When a table he was shipping did  not fit in the trunk of his car, Gillis simply  

disassembled it. Laying flat, the table was much  easier to transport, and so Gillis wasted no time  

in implementing this idea on a company-wide  scale. In no time, IKEA furniture was packed  

and shipped in its familiar flatpack format, the  first of which was the Lövbacken table, known at  

the time of its conception in 1956 as the Lövet. A year prior to their debut of flatpack furniture,  

IKEA faced boycotts from the manufacturers that  Ingvar had been working with. Due to the low  

prices that Ingvar charged for his products,  manufacturers refused to work with him,  

believing that they could turn a better profit  elsewhere. Once again, the solution was simple.  

When one cannot outsource production,  do it in-house. By designing, producing,  

showcasing and flat-packing all of their own  furniture, IKEA was able to offer quality products  

for the low prices that Ingvar desired to charge. Even as local competition urged suppliers to cut  

their ties with IKEA, Ingvar found solutions. A  lack of local supplies meant new foreign ties.  

Foreign ties meant foreign expansion, and so  IKEA spread to the neighboring nations. Ingvar  

then noted that hungry customers would leave  the store empty handed in search of sustenance,  

and so IKEA opened their own dining facilities.  Even a devastating fire that burnt IKEA’s 1970s  

flagship store to the ground would be utilized  as an opportunity to reconceptualize the store,  

turning a run-of-the-mill furniture stop into  the homeware shopping machine that it is today.  

1973 saw IKEA leaving the confines of Scandinavia  to venture further out on the globe. From Sydney  

to Hong Kong, stores cropped up everywhere, each  gaining more attention and momentum than the  

last. By 1979, IKEA boasted 29 global locations  and would go on to gather multitudes more with  

each year, every subsequent decade topping the  last in new locations in new nations. Everyone  

needed furniture, and everyone wanted furniture  that was easy on both the eye and the wallet,  

and IKEA filled that spot in the  market unlike any other store.  

America welcomed its first IKEA  location in Philadelphia in 1985,  

while the Philippines boasted a sprawling  730,000 square foot facility hosting an estimated  

20,000 daily visits. Back in Älmhult, home to  IKEA’s headquarters, a hotel and museum were  

even erected to keep record of the origins of the  company that Ingvar had built, where visitors can  

still purchase exclusive IKEA products. A core tenant of IKEA’s success has been  

its penchant for reinvesting profits into its  operations, or branching out to more charitable  

endeavors. Instead of the billions of dollars  in revenue that IKEA rakes in each year going  

to line the pockets of rich board members,  the corporate structure of the company sees  

that the company is using its profits only  to do good for itself, or for the world.  

The company doesn’t shy away from potential  controversy either, whether that’s weighing  

in on the climate crisis by pledging to be  climate positive by the end of this decade,  

or dipping into the renewable energy market in  Sweden and other European nations. IKEA often  

charges head-on into changes that other  multinational companies would balk at.  

Most recently, IKEA shutdown all Russian  locations following the Russian invasion  

of Ukraine. The company’s dedication to high  quality products, affordable prices, and the  

betterment of society have done a great deal  to endear IKEA to the consumers of the world.  

From meatballs, to Malm beds, IKEA is a staple  of the lives of millions around the globe. From  

a business savvy toddler to one of the most  recognizable brands on the face of the Earth,  

the furniture giant’s continued strides forward in  the realms of furniture design and sustainability  

will ensure that IKEA stays a household  name, in homes filled with their furniture.