Two days ago I found out that the founder of IKEA, Mr. Ingvar Kamprad died.
I have been going to IKEA for about 20 years. Since the first time I have always been delighted with the price, the style, and the variety of the furniture; and infuriated because once I am inside of a store, I feel like I am in a labyrinth where it’s impossible to get out.
Rest in peace Mr. Kamprad
Mr. Ingvar Kamprad, founder of IKEA died this January 27, 2018, at the age of 91. His Wealth was estimated to be 73.8 Billion. The money will not go to his heirs. Instead, almost all his money will go to charity (Wow, I hate to imagine what his kids thought about that).
There are many lessons of frugality and entrepreneurship that we can learn from Mr. Kamprad’s life.
I have nothing but admiration for Mr. Kamprad. He was an entrepreneur since he was a little boy. He discovered that if he bought things in bulk (at a discount) and sold them by the unit (at regular price), he could make a nice profit.
His first business was to buy matches in bulk and sell them by the box. Then, at age 10 he repeated the same business technique by selling pens.
He started IKEA at age 17.
Since the beginning, his strategy was to sell furniture at a lower price than his competitors, without compromising quality. His obsessions were: higher efficiency in the production line, higher quality, and lower cost. His formula allowed him to undercut all his competitors. At the beginning he was met with lots of resistance, some of his competitors even tried to sabotage his business, but at the end, Mr. Kamprad won by being unique and resilient.
Mr. Kamprad was an extremely frugal person. In spite of his billions, His motto was: “Having lots of money is no reason to waste it.”
- He avoided traveling first class
- He bought his clothes in flea markets ( I buy my clothes at Walmart and at second-hand stores)
- He drove a Volvo until it fell apart ( I have driven cars until they went to the scrap yard)
- He used to cut his hair in poor countries to spend less money (I cut my own hair to spend nothing)
- His house had no luxuries (my apartment neither)
- He worked until his eighties ( I am looking forward to not having to work)
Mr. Kamprad’s impact on Society
Mr. Kamprad did to the furniture business what Mr. Ford did to the automobile business. He made it accessible to millions of people.
His focus was on cutting cost but not at the expense of quality. He wanted to offer a good quality product at an affordable price.
Before IKEA, furniture used to be heavy and expensive. Young couples had to depend on hand me downs. Out of town students had to sleep on second-hand mattresses. All that changed with IKEA. Now modern, stylish furniture is within the reach of almost every one.
Mr. Kamprad came to this world and made it better. I don’t know of any person who doesn’t have a piece of IKEA furniture in their house. As an Airbnb host, I have been at the Montreal store many times and I have memorized the maze. I can now get in and out in record time. I know where to find what I am looking for and I have learned to put together IKEA furniture faster than anyone I know.
What can we learn from Mr.Kamprad
Most of the time, success in business doesn’t come from a fantastic idea. Success comes from execution. There is nothing new about selling furniture. But if you focus on being more efficient than your competitors you will have an opportunity to beat them.
As far as frugality. We all can learn a lot from Mr. Kamprad. We can learn not to waste our money on things that don’t add much value to our lives.
- We don’t have to buy a new car every 4 years ( I am talking to you, mother).
- We don’t have to buy the latest electronic gadget. (My friend Raja tells me to buy a new laptop. I say “why? the old one is still working fine.”)
- We don’t have to pay $60 for a haircut.
- We don’t have to buy new clothes every year.
- We don’t need to buy a house (or rent an apartment) bigger than we need.
The secret to wealth is still the same: Spend less than you earn and invest the rest.
Mr. Kamprad was a master in personal finance:
- He earned millions of dollars
- He spent very little, and
- He was a great investor, he invested in his company.
Thank you, Mr. Kamprad.
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