#104 Ingvar Kamprad (IKEA)

What I learned from reading Leading By Design: The Ikea Story by Ingvar Kamprad and Bertil Torekull. ---- [0:01] He aims to give his company eternal life [3:45] Early life and entrepreneurship [8:00] The beginning of IKEA [11:40] Learning entrepreneurship by imitating [16:30] IKEA almost dies in infancy / how Ingvar worked his way through it [26:00] Ingvar’s greatest regret in life: Neglecting his children for his business. “Everyone with children knows that childhood does not allow itself to be reconquered.” [32:20] Only those asleep make no mistakes. — Ingvar Kamprad [36:00] Thinking of the first store as a laboratory [43:43] Why IKEA stumbled upon self assembled furniture [46:30] A summary of the early history of IKEA [49:00] How Ingvar managed [54:00] Why Ingvar refused to go public [1:03:30] The IKEA Company Bible: The Testament of a Furniture Dealer [1:19:10] Ingvar the Misfit ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  Imagine one of the coldest little countries in the world. Think of the most barren part of that country. See in front of you a godforsaken place, deep in the wild forests. This book is about a man who grew up in this harsh environment, which was to mark his whole life and fundamentally color the philosophy with which he built his vast empire, consisting of thousands of employees and millions of customers all over the world. The man is Ingvar Kamprad, furniture dealer. He aims to give his firm eternal life. It's a long way to the country where an empire was built. Here, where he was born, loneliness, silence, and reserve prevail.

• 0:45David Senra?

  The cottages have always been small; survival has never been taken for granted. In this stony silence, this harsh moraine and morality, the dream of IKEA first grew, for everything requires its special soil.

• 1:03David Senra?

  This is where the rough outline of the whole concept began to be written by a dyslexic boy on a farm. "Two empty hands," the myth says. He built an empire from nothing. But what are two empty hands? And what is really meant by "nothing"? Do love and encouragement, innate energy, desire for revenge, imagination and curiosity all count for nothing? Of course they count. This is not a book about a man starting out empty-handed. On the contrary, it is a book about a man with his hands full of resolute dreams, a heart tormented by inadequacy and self-pity, and a stubborn and inquisitive enterprise.

• 1:47David Senra?

  A strange mixture of a social animal and an eccentric. The book is equally about a firm in which he realized and through which he lived out all these circumstances, for good or bad. Objections may well arise to the idea of summarizing an outstanding and natural genius so simply, or the elevation of the work of an incorrigible capitalist, so restlessly obsessed by the lure of profit and power that he used a thousand tricks to endow his creation with eternal life. Others will recognize themselves, for all of us bear within us the embryo of a miracle.

• 2:30David Senra?

  Alright, so that is from, that's an excerpt from the book that I read this week, and the one I'm going to talk to you about today, which is "Leading by Design: The IKEA Story", and it was written by Bertil Torical.

• 2:42David Senra?

  Okay, so two quick things before I jump into the rest of the book. One, I want to tell you how I discovered this book. I stumbled upon this online discussion where people were trying to figure out, what is the largest company in the world that's owned by a single individual? And because these companies are private, it's really hard to know the accurate answer, but there's a good chance that Ingvar Kamprad was that person. He founded IKEA at 17 years old, and before he died, he died in 91, I think in 2018, Bloomberg put his estimated net worth around $58 billion. Okay, so that piqued my interest, like, that's a really interesting question. Then I started looking for books on Ingvar Kamprad, and I found one where he worked, this is essentially, it's not written by him, but it's essentially an autobiography.

• 3:25David Senra?

  A large portion of this book are direct quotes from Ingvar, okay? The second thing is, I enjoyed the book so much, I'm going to have a hard time containing my excitement today. So I'm going to try not to jump out of my chair, I'm going to try not to knock my big head into the microphone, but I can't make that promise, because I absolutely fell in love with this book. Alright, so let me just jump right into it. I'm going to start a little bit about his early life, and there's a lot in the book about his early life. I'm only going to pick out a few of these, just so, as a way for you to understand, like, there's certain experiences that you have as a young person that are going to keep with you throughout all your life, so I want to try to highlight what I perceive those to be in Ingvar's life, okay? So first, he says, he's describing his father here.

• 4:08David Senra?

  His family, just to give you some background, his family, they're German, they wind up emigrating into, like, desolate farmland in Sweden back in, like, the early 1900s. Alright, so he says, this is his dad, he's talking to his dad now. "Only 25, he didn't really want to be a farmer at all, but his mother's word was law, and he became her obedient tool." He talks about his mom. She was an amazing person to whom nothing was allowed to be impossible. Sounds a lot like his theory in life. She soon discovered the poor state of my father's business affairs, so we started a guest house. So, one of the things that Ingvar is most well-known for is his extreme, extreme frugality. And I think his early, where he was raised and his early experiences probably,

• 4:53David Senra?

  probably helped that trait to grow and something he kept for his entire life. So, he says, "So she started a guest house. We rented out rooms to summer visitors, every room taken except my parents, into which we all squashed together. My mother was a heroine in silence. She contracted cancer before she was 50. She died at the young age of 53. The very thought of it makes me weep." And then he talks a little about his early childhood. He was a, he considers himself a merchant and a trader from the time he was like five years old. So, he says, "I suppose I was slightly peculiar in that I started tremendously early doing business deals. My aunt helped me buy the first hundred boxes of matches. They cost 88, I'm just gonna, I don't know how to pronounce the currencies,

• 5:36David Senra?

  so I'm gonna change everything to dollars. They're not actually dollars, but..." He says, "The first hundred boxes of matches cost me $88. I sold, uh, this was a hundred, so he bought a hundred boxes of matches for $88. I sold the boxes at $2 or $3 each." So, he says, "Talk about profit margins. I still remember the lovely feeling. I can't, I can't have been more than five at the time. Later on, I sold Christmas cards. I caught fish myself and then cycled around selling them. When I was 11, my main enterprise was garden seeds." He says, "Selling things became something of an obsession." It is, now, I guess I should back up.

• 6:18David Senra?

  At the very beginning of the book, it talks about, it says, "Ingvar Kamprad, furniture dealer." That's how he describes himself. He describes himself as an entrepreneur, but primarily as a furniture dealer. So, it says, Something became, uh, something of an obsession. It's not easy to know what might drive a boy more than the desire to earn money. It's a surprise that you could buy anything so cheaply and sell it for a little more. But I remember walking in the meadows with my father. We came to a place at which he said, "I'd like to make a forest track here, but it would cost too much." Then we were soon somewhere else, and again, it was money that was lacking to carry out my father's many plans. So this is a, this is a very important part of his life. This is a thought he's remembering, you know, 60 years after it happened.

• 7:03David Senra?

  He says, "I remember thinking, 'If only I could help father, supposing I got some money so that I..." And then he, uh, that never finishes the thought, essentially to help his father. He says, "To carry something out, you clearly had to have the means." And he talks about, um, something very important to him is that he never owned, uh, he never liked to owe anybody any money. Um, the growth of IKEA, you know, if you start something at 17, he still worked on until he was 91. Um, he got rich very slowly, but he would never, he would always grow within the means. So he, he never, well, let me just read this part. He says, "On another occasion, the manager of the bank lent me, uh, it's essentially sixty, the conversion of $63, so that I could purchase 500 fountain pens from Paris." Okay?

• 7:47David Senra?

  So then this is what he says. "This was essentially the only real loan I have taken out in my life." That's bananas. Says, "Trading was in my blood." Alright, so let me skip ahead a little bit. Um, this is the beginning of IKEA, like I said. How many people found their, their company at 17 and then worked on it their entire lives? This is a very unique experience that he had. And this is how that, that, uh, that actually happens. He says, "In my last year at middle school, my first rather childish business began increasingly looking like a real firm." So, I've already referenced this, this word "firm" over and over again. This, this is the... The word that Ingvar, excuse me, and the author are use, well, we would, like in

• 8:31David Senra?

  America, we would use the term company or business. So when you hear firm, that's what they're talking about. He's essentially talking about IKEA. So he says, "My first rather childish business became increasingly look like a real firm. Under my bed at the school boarding house, I had a cardboard box full of belts, wallets, watches, and pens." So all these things he would order through mail order, he'd import them into Sweden, and then he'd resell them. "I was seventeen in the spring of 1943 and wanted to start my own firm before going to the School of Commerce." So the School of Commerce is kind of like, what our equivalent would be like business school today. He says, "Thus was the trading firm IKEA founded." Now, first, he just sold a bunch of different things. He just had belts, wallets, watches, pens, seeds that you could use to grow crops, all

• 9:13David Senra?

  kinds of, anything that he thought he could make money on. Eventually, it's going to obviously become just furniture, and I'll tell you how we get there. Let me continue in this section first. "Solving the question of how, in the simple and cheapest way to convey goods from the factory to the customer, was fundamental if one were to become a good businessman. In the school library, I found trade papers with advertisements for exports and imports. I wrote to a foreign manufacturer, whose general agent for pens I then became." That's an interesting way to write, right? So he's importing a bunch of fountain pens, and there's a high profit margin on these, and he begins selling those. He says, the reason he wanted to do this, because he's always obsessed with the lowest possible price.

• 9:58David Senra?

  This is something he kept with him when he was building IKEA. He says, "Direct import was a way of fixing the lowest price, the lowest possible price." Then he would go in and study other businesses. He's very interesting, like the way his brain worked from such a young age is just, it's very fascinating to me. So he says, "I went into a shoe shop, and saw the old-fashioned way they had of selling anything." He talks about they have cardboard boxes stacked everywhere, all the way up to the shelf. He says, "And then they'd have ladders to access the inventory." He says, "They had ladders that they had to keep going up and down to fetch brown and black shoes. And in this thought, I loved." That couldn't be rational, and it wasted money. So one great way to learn what you want to do is by learning what you don't want to do first. Something I want to bring to your attention, too.

• 10:43David Senra?

  So he started what essentially is going to turn to IKEA. But he also had a job. So IKEA started out as a side hustle, if you want to think of it in that terms. So he's working at a clerk in this office. And he says, "The finance manager allowed me to sell files to my employer." This meant hundreds of files. There's a discrepancy in language here. I think what he means is like ways, places to store files because he talks about how heavy they are and they have to come by train. So again, this just gives you an insight into his personality. He's working there, but he's also looking for other ways that he can make money at the same time. He's like, "Hey, I'm in an office. I know the problems they have and I know people that sell solutions to the problems. Let me just go ahead and order those and resell them to my, to the company I work for."

• 11:26David Senra?

  And the reason I bring that up is because this realization is extremely important. This is what he says. "Those files made a profit that turned out to be greater than my fixed salary." Once you realize that, this is the birth of a new entrepreneur there. Okay, so there's a bunch that are happening on this page. One, he starts selling furniture by imitating. The way we all learn at the beginning. There's very slow growth at the beginning. And then we're going to see how he accidentally finds his destiny. And then learning a life lesson from your competitors. There's a lot packed on these pages. Let me just get into it. "In 1948, I advertised furniture for the first time. Up until then, I had sold minor wares, Christmas cards, seeds, fountain pens, wallets, picture frames,

• 12:08David Senra?

  table runners, watches, jewelry, nylon stockings, that kind of thing. I read its advertisements in the Agricultural Society's paper." Okay, so he saw somebody else sold furniture. And IKEA starts with a mail order at the time, right? There's no store. We'll get there eventually. So he says, "I read the competitors' advertisements in the Agricultural Society's paper. I decided to try the same route." So that's what I mean. He starts selling furniture first by imitating. "I tried advertising an armless nursing chair that I called Ruth. The response was unambiguous. We sold a huge amount of this test furniture." And then this sentence gives you a description of the prices, or excuse me, of the sales. "Everything went."

• 12:52David Senra?

  That was how the business started. People ordered on a form from us and the factories delivered. Furniture began to take over more and more and evenings were passed cutting up material for upholstery. IKEA could now no longer remain a one man firm, so he was doing everything himself. He says, "In 1948, I appointed my very first employee. Two years later, the firm had grown to a staff of seven or eight." So that's what I mean. Even when you, later in the book, it goes into like how they did not, you know, you see some companies that start, they have no stores and then, you know, maybe five years later, they may have hundreds. IKEA did not grow that way. It was very slow and deliberate. Even the beginning, first it's a one man company, then a few years later, it's a two person company. And two years after that, they only have seven or eight employees.

• 13:36David Senra?

  That's very slow growth. "So by chance, the furniture trade, which I entered in an attempt to imitate competitors, decided my destiny. No other event in life pleases me more than the fact that I ended up there. My interest at first was purely commercial. Selling as much decent furniture as I could as cheaply as possible." Okay, so again, he's young, he doesn't know. We always, I always go back to like people debate about like what entrepreneurship is. And I think the best description I ever heard was, it's from Peter Drucker. "Entrepreneurship is not an art or a science, it's a practice." Meaning that there's things that you're going to learn that you can only get through experience. And so that's, he's just like, okay, I'm copying everybody around me. I'm just going to copy what they're doing. But when you mimic, you're not thinking. Eventually, he realizes, oh, I need to rethink this.

• 14:21David Senra?

  So he says, "First, I'm just buying as much decent furniture as possible and sell as cheap as possible." Now here's the problem, he didn't realize the limits to that, like, business process. He says, "Not until the first complaints started coming in did I realize that it was quality that was lacking. One day, that would force me to draw certain conclusions and choose another way." So that's going to wind up being the IKEA way. "I had made a contact a few years previously with my nearest competitors, and that taught me something for life." So now he's going to meet another furniture dealer. But this furniture dealer's, you know, let's see, 35 years older than him. There's this guy named Gunner.

• 15:01David Senra?

  Gunner was a man in his 50s and he offered me about a score or so of watches for $55. For $55 each. Remember, this is not real dollars. "I couldn't afford that," I said, "and somewhat immodestly appealed to his sympathy. I was young and very much wanted to become a businessman like him and needed all the help I could get." So they agree on a price. He winds up giving in, uh, giving in to Gunner's. Gunner gets the best of him in, in, in this negotiation, but he learns something for life. He says, "Taking his fat cigar out of his mouth, Gunner then said, 'Young man, you'll never become a businessman if you say to start with that you could pay 50, when I say 55.

• 15:44David Senra?

  Then you can't accept 52 without first having tried off for 51.'" So he's saying like, "You gave up too early." Like, "You gotta negotiate better than that." He says, "This is the main lesson. One thing you have to learn in business is that $10 on a price can mean everything." So he's, essentially, the translation there is like, not even $10. Think of a dollar can mean everything. Uh, so he says, "I promise I'll never forget that," I said politely, "and I've kept that promise ever since. Still today, at the open market where we live in Switzerland, I have a habit of taking the opportunity just before they are packing up to ask if I may buy a little more cheaply. My wife gets pretty tired of this."

• 16:26David Senra?

  Okay, so at this point, um, I think he's already made the switch to just dealing furniture. Um, I wanna talk, if you look at like the, um, the highlights and all the post-it notes I have all over this book, the vast majority of what I wanna talk to you about today is gonna happen at the beginning because I find it so fascinating. Like Ikea, when it's, you know, turning over billions of dollars a year and he's already a billionaire, that's a less interesting story than understanding how he got there, right? At least to me. Now, what blew my mind is Ikea almost died in infancy. So I wanna spend some time talking to you about how he works his way through this. This is extremely important. Alright, so he says, "IKEA was very much at a crossroads. Competition in mail order had become almost unendurable. A fact one simple example can illustrate."

• 17:10David Senra?

  So this is a simple example he's gonna use as he's trying to resell ironing boards. Okay? So, he's selling an ironing board, all his competitors are. They start out, you know, it's $24. Then somebody lowers it to $22.50 and 20, and it just keeps going down, going lower and lower and lower. They're just competing on price, which is a terrible situation to be in if you're trying to run a business that you want to survive, right? So he says, "Step by step, this price war affected the quality of the ironing board, which became simpler and simpler, but also worse and worse. The same applied to furniture. Complaints started to mount, and I could see how things were going. The mail order trade was risking an increasingly bad reputation, and in the long run, IKEA could not survive in that way.

• 17:53David Senra?

  The core problem with mail order was that customers themselves could not touch the goods, but had to rely on descriptions in the advertisement or catalog." I think if you analyze that sentence, you see where the logical step he's gonna make soon. So, well, this is a problem. Like, they can't touch the furniture, they can't see it. What is IKEA today? Yeah, they have this huge catalog, but they use a catalog to drive people into their stores. So he says, "We were faced with a momentous decision, to allow IKEA to die or to find a new way of maintaining the trust of the customer and still making money. Out of the long talks to the night about how..." He's talking about, he's talking with his, like, initial group of employees. "Out of long talks throughout the night about how we were able to get out of this vicious circle, lower price, worse quality,

• 18:36David Senra?

  the idea grew of trying a permanent display or exhibition of our furniture. People could go to the display, see the furniture for themselves, and compare the quality at different price levels."

• 18:51David Senra?

  So, he's, he lives in this little town. I think you could pronounce it Almeholt, Sweden. And there's this little, um, it's like a, let's call it like a little town store that's closing. Okay, so at this part, at this point in time, he's got to solve the, the, the quality issue, right? And he's got to find a way to, essentially, he's figuring out how can I differentiate myself from a bunch of mail order, um, competitors? So he buys the store. So it says, "The store is about to close. For what I thought was the tremendous sum of $1,625." Uh, he, so he did the calculation there for you. He spent 13,000 kronor, I think it's cost, but it was 1,600 bucks at the time. "I bought the entire shabby building. The decision was logical.

• 19:36David Senra?

  In the spring of 1952, customers that in the future, uh, oh, excuse me. In the spring of 1952, we informed our customers that in the future, we would sell only furniture and domestic articles. That was how I became a furniture dealer." Okay, so that's when it happens. It happened, uh, about four years after. Okay. Now, he says, "We could now at last show those cheap ironing boards alongside those that cost five kronor more and were of good quality. And people did just what we had hoped. They wisely chose the more expensive ironing board. At that moment, the basis of the modern IKEA concept was created." This is why it's so important. "And in principle, it still applies.

• 20:18David Senra?

  First and foremost, use a catalog to tempt people to come into an exhibition, which today is our store." So he says, and he's talking about the process that was, this was maybe very common today, but back when he was doing it, and especially in the place he was doing it, no one else was doing this, what he says. "Mail order and furniture store in one. As far as I knew, that business idea had not been put into practical use anywhere else. We were the first." Now he's gonna say something here in this next paragraph that always reminds me of, it's actually the, I'm pretty sure it's the company motto for Jeff Bezos' rocket company, Blue Origin, but he also uses it in the building of Amazon. And this idea of doing things step by step, but you're doing it, he says, "step by step

• 21:03David Senra?

  ferociously." Right? "We're gonna take our time, we're gonna build for the long term, but we're not gonna dilly-dally, we're not lollygagging. We're making intentional steps and we're always moving forward." So Ikea's no difference. He says, "Success was immediate and in created the embryo and resource for the store we created five years later. But I have never been so scared in my whole life as when we opened and I saw the line outside. There were at least 1,000 people there. I couldn't believe my eyes. We didn't know whether the floor would hold up, or even more important, whether we'd be able to supply enough buns." So these are like cinnamon buns, I think? "That was precarious, as we had promised coffee and buns to those who came to the opening.

• 21:46David Senra?

  I remember the time afterward as one long rush of constant and joyous work." Ikea was taking shape as a real firm, real company. "Many of our unwritten laws were already written by this time." And he's talking, he's gonna, I'm gonna talk a lot about, because he's got, he does something that I think is extremely smart, people, that I've talked about over and over again. Henry Royce, founder of Rolls Royce, kept meticulous notes. His philosophy on engineering was so, like, so detail-oriented and so, like, his personal notes were so beneficial that Rolls Royce bound it up and printed it as an internal book. Last week I did, or not last week, a couple days ago, I did a bonus episode for Misfits that talks about, Carl Braun did something very similar where he outlines like how a company should communicate.

• 22:31David Senra?

  And he's writing it for his company first, but other companies could copy. So anyways, Ingvar has done a lot of work on, not only in like speeches, but in writing about what Ikea stands for. So this is some of the unwritten laws, he says, were already written at this time. "Helpfulness, thrift, and a strong sense of responsibility." I'm gonna talk a lot more about all this stuff later. And then, I'm still in the same section. This, again, the note I left myself, it's so funny how all these ideas keep compounding, right? And you see a lot of the same ideas that are separated by, in some cases, hundreds of years and thousands of miles. Well, this remind, this section right here, where this is, these are direct quotes from Ingvar. Reminds me of Henry Clay Frick when he told us right at the beginning, gentlemen,

• 23:13David Senra?

  watch your costs. Ingvar is telling us the same thing over and over again. To this day at IKEA, we try to translate everything into a clear price and stated, this is a fantastic idea. Our advertising brochures have on the front or back, information on what they cost to compile, often with an indication that is, in the end, the customer who has to pay for whatever we waste. He says, on the next page, I'm gonna skip over a bunch of this stuff, but this, this section just says, hey, listen, we can all improve our station in life, all of us, we all have that power. And he says, gradually the pressure on this little town he founded in, I don't know how to pronounce it, grew even greater and greater.

• 23:55David Senra?

  And it wasn't long before, apart from the restaurant, we also had an inn on the site with a hotel and a pool. So he made the first IKEA store like a destination, people would travel all over the country to come and so, to come and visit. My grandfather, so I failed to mention something previously, the store he bought was, used to be run by his grandfather, and his grandfather's dead at this time. So he says, gradually the pressure on this little town grew even greater and greater, and it wasn't long before, apart from the restaurant, we also had an inn on the site with a hotel and a pool. My grandfather would have been amazed for the place was this old country store. So when I'm reading about the improvements that he made to what used to be his grandfather's

• 24:36David Senra?

  store in this tiny little town, it reminds me of, I think there's like, not two types of people in the world, but there's people that like, I'm gonna read this quote from Steve Jobs, I always think about all the time. And I think there's people that believe it to be true, and those are the people that, you know, that think they can influence their own life, they can change things, they can make things better. And then you have some aspect of humanity that just thinks, oh, life is like, I'm born into this world, it is what it is, and I'm just gonna live my life and die, not have any influence. Of course, like, I believe the first, and you probably do too, if you're listening to this podcast. So he says, Steve Jobs, when you grow up, this is one of the most important quotes I've ever come across in my life. When you grow up, you tend to get told the world is the way it is, and your life is just to live your life inside the world. Try not to bash into the walls too much, try to have a nice family, have fun, save a little money. But that's a very limited life.

• 25:20David Senra?

  Life can be much broader, once you discover one simple fact. Everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you'll never be the same again. I don't know if Ingvar was ever taught that explicitly by anybody else, but he definitely through experience is learning that lesson and you see that. His fanatical focus on improvement every day, um, over a long period of time, gets the result that, that he got. It starts out in one tiny store, in the middle of nowhere Sweden, and builds one of the most, uh, uh, the largest private companies in the world. Alright, now, there's a lot of bad mistakes and dumb things, okay?

• 26:03David Senra?

  I've said over and over again, this, the podcast does not exist for us to like unquestionably idolize these people. Human beings have great ideas and they have bad ideas, we all have flaws. So we're not, we're learning from, we're not idolizing, right? That's extremely important part. Ingvar's the same thing. Um, I'm gonna read this, this section to you, because this happens over and over again. And he mentions what I'm about to mention to you, I don't know, half a dozen times in different ways in the book. And that is that he was so obsessed with work that he wa, he didn't, he was, one of his, his largest regret in life is that he was so obsessed with work, that he missed his kid's childhood. Okay, and this is what he says, he mentions it a bunch of times, but this I think is the best description.

• 26:46David Senra?

  That's the one I wanted to share with you, instead of just saying the same point over and over again. He says, "It was to be one of Ingvar's great sorrows and the cause of some soul searching, that business made him neglect his three sons as they grew up. He has done everything to make up for it since, but everyone with ch-" This is the most important sentence, ready? "But everyone with children knows that childhood does not allow itself to be reconquered."

• 27:13David Senra?

  That is just, that is damn good writing right there. That's a hell of a sentence. And so Ingvar repeats that over and over again. Like now, you know, his sons are, um, uh, he has relationships, well, when this book was written, this book is 20 years old, he was still alive. But, and his sons were in like the 30s at that point. Um, he has relationships to them. They were all work in Ikea in one form or fashion. He wants them to take over after he's gone and so on and so forth. But he's a very emotional person. He cries a lot. This book, I mean, I can't tell you how many times it mentions him crying. Um, he's extremely heartbroken over this, that he felt that yes, he was able to, to build a great empire. Uh, he was able to, to, to make the lives of his customers better, make the lives of his employees better.

• 27:58David Senra?

  But he did that at the, at, at, at a huge cost. And he says over and over again, like that, the cost was not worth it. And the reason I bring that up is because, you know, I, you'd be hard pressed to find somebody that's, that is, uh, like more of an evangelist for entrepreneurship, but at the same time, like we, um, we can't forget that at the end of the day, it's our job and our family has to come first. Um, we are going, unless you're completely psychopathic, sociopathic person, you're gonna regret missing out on your kid's childhood. They're, they're so, they're small for so, such a short amount of time. It goes so fast until they, they grow up, you know, they have their own lives, they other, like you're just,

• 28:41David Senra?

  it's such a tiny, tiny time period that I, I just think like, I've, I've read enough biographies at this point and seen this mistake. Like Phil Knight, Sam Walton, the people I use over and over again, they're like, damn. Yes, I built Nike. Yes, I built Walmart. Yes, I built Ikea, but damn, I didn't spend enough time on my kids. And they're at the end of the, this guy, they're doing, Phil was doing the same things, just like Sam was, just where Ingvar's staring here. There's something in humanity that when you get to the end, uh, Ingvar talked about in the book, he's like, listen, everybody approached me before, they're talking about, oh, um, write a biography. He's like, I'm not interested in that. I'm a private person. But then he says he was finally convinced because they said, yeah, but think of all the future entrepreneurs that can learn from you. And then that's when he said it drew his attention. But there's something in our species that towards the end of our life,

• 29:26David Senra?

  we want to pass on the knowledge that we've accumulated through decades of experience. And I see this over and over again. And maybe I have a unique perspective because I don't know how many of the people read that many biographies. But like, I'm just, it's, I'm telling you. Like it's, it's, it's present enough that it's a big deal and there's something in our nature that causes us to make that mistake over and over again. And hopefully by me bringing it to your attention, you think about that. You know, when, hey, you, it's, there's nothing wrong with being obsessed, you know? I'm sure I'm attracted to obsessive people and in some degree I am obsessive, but like, damn, I don't want to be a bad dad. I just don't.

• 30:05David Senra?

  Okay, I want to go on to another regret that's on the very next page. And again, we see this regret a lot. There's a desire or a longing for the earlier, smaller days of a company. And I don't know what the takeaway here is, other than you have to do whatever you feel is right. All I can tell is bring this to attention that I read this a lot, that they all long, they're like, yeah, I built this giant company, I have 40,000, in his case, he's got 40,000 employees, but they missed the days when there was 10 of us. It's very interesting. Alright, so he says, "The transition from the closeness of, this is a city there, I'm gonna skip, to the less intimate atmosphere of a large company was difficult for the founder. Essentially, he has never really accepted it." That's a hell of a sentence, right? So now we're gonna go directly to his words. "The first wonderful time of strong working

• 30:50David Senra?

  fellowship with a circle of individuals, all of whom I knew personally, made me dream foolish dreams of it always remaining the same. I nourished a false belief that would be possible to preserve the total us feeling even when we grew large. The days of the family have passed. The IKEA spirit still lives on, but in another way. But those days at the beginning, on the farm, at home, when IKEA was really a family, that remains my very best memory." Now, keep in mind, he's probably 70, I would say he's about 71 years old when he's writing those words, and a multi-multi-billionaire, and he's telling

• 31:33David Senra?

  you, his very best memory is when he had one store and 10 people to work very closely with. There is something in our nature where we prefer to work in small bands of tight, like, close-knit individuals. And yet, you know, the history of entrepreneurship is, you know, the opposite. It's like this, start off small, just as like a means to an end. I'm sure there are some people that have realized that and say, hey, I'm never gonna allow myself to go through that. But again, it really is like, personal preference. I don't understand the debates back and forth, like- You, if you want to build a giant company, build a giant company. If you want to build a small company, build a small company. You got to do, like, I always go back to that, uh, that saying, uh, that, that quote in that book, uh, Michael Ovitz's biography.

• 32:13David Senra?

  Like, you have to be who you are. I think it's Michael Ovitz. I might be confusing it with a red alert. One of them said it. So anyways.

• 32:21David Senra?

  Okay, so he's got his famous quote. Ingvar is very, the way I think about him is almost like a preacher. He, he has these, like, ideas he repeats over and over again, because he understands reputation is persuasive, right? So one of those is, "Only those asleep make no mistakes." Um, he says, so he says, "I have not been able to avoid severe losses. Both fiascos and triumphs have marked the history of the firm." So I bring that up because, again, everybody sees the end result. They know IKEA is this huge, successful company. It's like, no huge, successful company gets huge, successful without a, a, a lot of mistakes. Um, he's going to talk now about his many weaknesses. He says he's too trusting, that he's gullible, that he is, his inability to learn from some mistakes.

• 33:03David Senra?

  This is a very, I, I, you know what it is? I was nervous. I'm not usually nervous when I sit down to do this. I'm nervous that I'm not going to be able to convey everything that I learned from this book, because it's so unique and weird. And I mean that the, the most positive way possible. He's like, he's got this, like, typical, they say he's like this typical, and I don't know anything about the culture, but like, um, he says, like, his family, like, Germans were like, you know, you hold your emotions in, you like, you're, you're kind of like stoic, I guess, is the, the way I would describe it. But this guy, like, the, the book is full of him essentially being extremely insecure and full of self-doubt, which is surprising. It surprised me.

• 33:48David Senra?

  So he's very, like, uh, forthcoming with his, a lot of his mistakes. "Oh, I guess I should, should, should bring this up now, because it made national news in, like, the 90s." Um, when he was young, he was part of the Swedish, it's like Swedish neo-Nazis? So he says, like, it, there's an entire chapter of the book dedicated to this. Um, he, he says, you know, he was a byproduct of a German grandmother who was devoutly, like, pro-German, and a German father who had the same beliefs, and so they taught his beliefs. And he believed that up until his, like, his early 20s, and then he started, uh, like, changing his beliefs. And according to the book, it's like more pro-German and less like anti-other religions or other ethnicities.

• 34:32David Senra?

  And there's no like explicit evidence that he was anti-Semitic, but like his dad would read Mein Kampf and stuff like that. So again, I bring that up is because there's no perfect person. And they're all gonna make terrible mistakes. And this is something that he talks about over and over again, like, you know, staying up late at night in his bed crying about the mistakes that he made when he was younger because it did damage to his company, you know, 50 years after the fact. But you can never really know what's inside somebody's own heart unless they're gonna express it. But he says, like, you know, that was a short part of his life, that he was like interested in fascism and that he changed later on. But I don't know, it was a... My point being is like, he didn't leave out the unflattering parts, because that entire

• 35:17David Senra?

  chapter was extremely unflattering and makes him, you know, look extremely bad. Alright, so it says, now back to Ingvar's words. He says, "Again, I had to find a solution. I wept a lot, as I couldn't bear adversities. Actually, I often failed to look at things from the bright side. The sad thing is that I didn't learn much from these early failures. On the contrary, I kept repeating them." See what I mean? This is extremely hard for somebody to admit about themselves. "Father always said, 'You're too gullible,' and that is still true. For a long time, I found it difficult not to believe people. Now that I'm older, I have become slightly more crafted and guarded towards people in general." So there's just some of his faults. I like this idea. So eventually, they're gonna open... So they have this like little showroom, right?

• 36:02David Senra?

  But eventually, they open... Well, it's... I guess, no, I'm sorry, I was wrong. This is still in... He's got his two-story wooden showroom, which is what he's gonna... What I want to talk to you about real quick here. Eventually, they build like their first, what they consider their first real store, but we're not there yet. Alright, so it says, "The good idea here is that he thought of his first store as a laboratory." So he says, "A renovated two-story wooden building became the superb laboratory for everything new that was to be created. A workshop was formed for learning to build the perfect selling machine." This is an interesting way to think about your business, as you're constructing a perfect selling machine. So he says... We needed a laboratory to learn how to build the perfect selling machine with the

• 36:44David Senra?

  help of a catalog, business sense, and the underdogs' obsession with always doing the opposite of what others were doing. So we've seen this a lot in the founders that we've studied, this obsession with going their own way, with finding, not just copying what other people are doing and accepting it without thinking it through, but really saying, "Hey, I could find a better way." Ingvar was no different. And he says, now here's another fault of his, right? I want to bring a lot of this to your attention because I think it's important. His obsession with work led to his first divorce. And this is what he means, though, he never really learned... So he doesn't have any, he has an adopted daughter with his first wife, right? They get divorced, which I'm going to tell you about here in a minute. And then he has, he gets remarried, doesn't have his first kid until he's 38, but he's

• 37:28David Senra?

  making the same mistake over and over again, just like he neglected his children for work, he neglected his first wife for work. And so this is what he says about it, goes on and on. I think the sentence is, at least two sentences, gives you a good summary. "But the whole matter pains me and still hurts. I considered myself a real shit." So he's taking blame. He's like, "Listen, you know, I didn't give her the attention I needed. You know, I was so focused on my business, and of course it's going to end in divorce that way." Okay, skipping ahead in the timeline. So he, his goal is to knock out middlemen, right? He, from a very young age, he's like, "I don't understand, like, the prices that comes, like, the price increase once, once a product moves from the factory's gates to in the

• 38:12David Senra?

  customer's hands, it's much more expensive. What's going on here?" And so he realizes, "Oh, you got all these people in the middle taking a little piece and adding on to it." So he wanted to eliminate that. When you do that, when you try to change, and that's the way the furniture business was in his country at the time. And so he's, he's trying to rewrite how the industry sells things. Well, what's going to happen? Your competitors and your industry, like, what do you call them, like, organizations are going to push back. And so they do that severely to him. So he's dealing, at this point, he's dealing with angry competitors and supplier boycotts. So what would happen is his competitors would buy so much for, they'd buy from similar suppliers, and his competitors would push, put pressure on his suppliers, saying, "Hey, if you sell to Ingvar, to IKEA, we're gonna yank our business from you."

• 38:55David Senra?

  Now, what would happen is they would refuse to sell to IKEA, because IKEA at the time was much smaller than the other competitors, right? So this is just a reminder, everyone's struggles. It's, just a lot of these struggles are hidden. So it says, "The atmosphere became increasingly rancorous, and Ingvar had many tearful nights," there's a crying again, "as he lay awake, wondering how he could solve the problem." Alright, so, this is, now I want to tell you, this is why the industry fought IKEA, and how IKEA won. And then his idea of nursing the supplier. Alright, it says, "Superficially, the battle was about whether fair exhibitions could sell to the visiting public, which IKEA did, or whether only wholesale trading could occur.

• 39:37David Senra?

  Less superficially, it was about breaking an upstart." Okay, so that gives you like the basis for what's happening here. Essentially, a lot of furniture retailers at the time, to get customers, they'd go to trade shows. And sometime, essentially, you were supposed to sell just to wholesalers, who would then turn around to sell to, directly to customers. But IKEA was selling direct to customers. So they would sell to customers and wholesalers with the same part, and that's when people, organizations, were essentially trying to change the rules so this practice was no longer allowed. They're essentially, like what you said, superficially, less superficially, it was about breaking an upstart. They're not, it's not a debate over rules, it's a debate about limiting competition, unfortunately. It says, "Year after year, the same complaints against IKEA were made.

• 40:22David Senra?

  By 1952, restrictions had gone so far that exhibitors were not even allowed to take orders, and the young director was summoned to the Chamber of Commerce for questioning." He's the young director. "A few years later, the National Association of Furniture Dealers succeeded in forcing the fair to ban IKEA from even giving the prices of exhibited goods." So anytime you see this pushback in industry, within an industry, these are, these are short-term Band-Aids. Eventually, the better competitor, which is IKEA, is by far the better-run company at this point, is going to overtake. This is just silly nonsense that you see over and over again. Petrified conservative sales thinking was up against a new and insolent price pressure.

• 41:05David Senra?

  And that's what they didn't like, that he was eating into their profits. IKEA was banned again and again from doing anything, but kept finding new ways of getting around each new ban. That's why they say he's extremely creative. In a letter from the National Association of Furniture Dealers, IKEA was likened to a monster with seven heads. This is how they describe IKEA. If you cut off one, another soon grows. Says this battle of fair participation was really only over one issue, the low prices of the upstart. It finally abated, not because anyone changed their opinion, but because the price, this is an actual organization in Sweden,

• 41:47David Senra?

  the Price and Cartel Commission. But because the Price and Cartel Commission intervened, it was not because they intervened, but mostly because IKEA was growing at record speed and acquiring its own exhibition premises, meaning I'm not going to the fair anymore, I'm just going to open these stores, in the three most important cities. Says they could not be bothered with the battle, for they were fully busy with succeeding. And then we're going to wrap this up here. It says, "A manufacturer's description of the difference between IKEA and other furniture dealers. IKEA paid within 10 days with a deduction for a cash discount. Others did not pay for three or four months, and yet made the same deduction.

• 42:28David Senra?

  Nursing the suppliers is one of Cam Prard's hobby horse principles, one that he still imparts to his staff." Meaning that you're going to get better, like he understands how humans work. That yeah, there's a company and you have to deal with the company, but the company is just a collection of human beings. And if you treat them better, if you're nicer to them, you pay your bills on time, you're in turn going to get better service. And so that's something that he continues to preach to this, or he did, until, you know, obviously he passed away.

• 42:59David Senra?

  Okay, so now this is Ingvar's philosophy on problems. This is gonna sound familiar. This is one of my favorite quotes that I've discovered by reading all these books. This is from Henry Kaiser. "Problems are just opportunities in work clothes." We see a similar echo here from Ingvar. He says, "In IKEA's business philosophy, the whole matter should be inscribed as a golden rule. Regard every problem as a possibility. New problems created a dizzying chance. When we were not allowed to buy the same furniture that others were, we were forced to design our own. And that came to provide us with a style of our own, a design of our own. And from the necessity to secure our own deliveries, a chance arose that in its turn opened up a whole new world to us."

• 43:43David Senra?

  Now, one of the things that IKEA is most famous for is that you pick up the furniture yourself, you take it home, and you put it together yourself. So it's called self-assembled furniture. That's something that was kind of discovered by accident. And he says, "Perhaps it be said that the reality forced the innovation upon us. We had begun to experience a worrisome high percentage of damaged furniture in transport, broken table legs and that kind of thing." So initially, self-assembled furniture is just a way for them to get less damaged furniture in transport, right? And it has, so it says, "Once it started working," he says, "thus self-assembled bookcases, chairs, beds, and other pieces successfully appeared. But it also had other effects, like beneficial effects in them."

• 44:25David Senra?

  He says, "A design that was not just good, but also from the start adapted to machine production and thus cheap to produce. With a design of that kind and the innovation of self-assembly, we could save a great deal of money in the factories and on transport, as well as keep down the price for the customer." Okay, so we just heard that he considers every problem an opportunity, right? And so...

• 44:51David Senra?

  He realizes that he's, a few suppliers are still blocking him in Sweden. So he's like, okay, I gotta find solutions to this problem. I'm gonna look outside the borders. And so Poland was just, I guess, had just stopped being communist, or it's like half, like, it's kind of transitioning from communist to more like a market economy. So expanding into Poland turns out to be a major turning point in IKEA's history. And there's like, there's a chapter that goes in-depth on this. I'm just gonna pick out real short to give you like a summary of it. It says, "IKEA's simple and open, open structure of command had be, has become a dream for people used to inaccessible state hierarchies. And young, well-educated academics have been attracted to private enterprise."

• 45:33David Senra?

  Uh, so a lot of these people come to work for IKEA. And it says, "It went well for other reasons, too. Having spent 20 years with IKEA in Poland, uh, this guy Ericsson explains the company's success." And that's a direct quote from, from, um, from Ericsson about IKEA's success in Poland. He says, "Because young people were given responsibility, because employees were permitted to use both imagination and common sense, because the company maintained its humble attitude." This is the humble attitude, "if we don't improve, someone else will, so we must make the effort." "And because, from Ingvar Kamprad comes the same perpetually driving question that keeps developments going. How can we make it a little cheaper? What do you think? Of course we can."

• 46:15David Senra?

  So essentially, he's just giving people that did not have, uh, large influence over their work, and kind of directed by a central authority, uh, the ability to, like, he trusted in them to make the best decision. Uh, now, at this point in the book, there's a summary of the early history of IKEA. I want to read the whole thing to you, because I think it's, in a few short paragraphs, it gives you a general overview of the first few years of IKEA. Says, "The story of IKEA is a businessman's manual. It teaches that few events in the inception and growth of a company can be ignored as unimportant. Both fiascos and success build an entrepreneur. Sometimes even a disaster can turn into a miracle.

• 46:57David Senra?

  IKEA's route to progress resembles most of all a process in which every new stage seems to have happened naturally, though perhaps not logically." When the boy, meaning a young Ingvar, sold his first box of matches, his innate genius was tested, and the driving force of greed was also aroused. When the first piece of mail-order furniture sold better than all of his minor wares, he had the first impulse that turned him in stages from a peddler into a furniture dealer. Yet he still lacked a vision of something greater than money. When falling prices in the competition with other mail-order firms threatened quality and thus undermined the public's confidence in his firm,

• 47:40David Senra?

  he gained insight into the relation between price and people's needs. That is how adversity is sandwiched with progress and opposition creates openings that invite new successes as well as new obstacles. The flow of customers to the little town gave the founder courage and resources to make the decision to build a possible store in the countryside. His successes caused the blockade by competitors, who forced IKEA to go outside the borders of the country to seek new manufacturers, thus issuing a world citizen passport for the company, which today has a very complicated ownership structure and factories and employees all over the world.

• 48:24David Senra?

  Production costs dropped, prices dropped, and success in the market was secured. Without this resolute triumph, the money would not have existed to make it possible to open a store outside Stockholm, which required an investment of $2.1 million, financed by Ingvar himself without borrowing a single cent. It was a turning point that provided the foundations from which the modern IKEA would soon conquer the world. Alright, so that gives you a good idea of where we are in the story. Okay, so now that we have that foundation, I want to talk to you a little bit about how Ingvar managed, and then him dealing with what the book calls like his Judas, his, um,

• 49:10David Senra?

  somebody that stabbed him in the back, or they had a falling out, whatever word you want to put on it. Um, so first, I gotta tell you about one of his employees. And through telling you about him, you'll see how Ingvar chooses to manage. His name is Jan. I don't know how to pronounce his last name, so we're just gonna call him Jan the whole time. Alright, so Jan, employed in 1968 as one of the, as the first of Ingvar's many assistants, tells of how he was practically left on his own for the whole of his first month because the boss was in Poland. He had to, Jan, meaning Jan, he had to find out for himself how the furniture store functioned. Everything seemed very free, disorganized, chancy, and full of unwritten laws.

• 49:52David Senra?

  Jan had to become his own entrepreneur, form his own sphere of influence, and Ingvar approved of that. As immovable as he is in his demands to follow the IKEA concept, he, meaning Ingvar, is susceptible to the independent mavericks. This is something that's mentioned in the book a lot, over and over again. He's got a soft spot, because he, I think, he's a misfit. Ingvar is definitely a misfit, maverick, whatever word you want to put on it. And so he, when he sees other people that are like him, even when they, then this guy Jan, they go like, they fight a lot. To the point where like Jan thought he was fired multiple times. But there's something where he gives leeway to people that look like himself. Does that make sense? Like, he just, he didn't like other people telling him what to do. He wanted to come up with his own ideas.

• 50:37David Senra?

  And so when he sees these people in his organization, he kind of nurtures that, even if they go against him. So he says, uh, "He is susceptible to independent mavericks. The combination of lone wolf and herd animal is in fact the sum, the sum total of Ingvar's own makeup as an entrepreneur and builder of firms. He knows how to recognize himself."

• 50:58David Senra?

  Okay, then he talks about there's a change that's gonna happen in any, the growth of any companies. There's a decisive moment in the growth of a company is when the founder has to hand over the financial function to somebody else, right, somebody more experienced in those, like, in that job, because it hinders his business activities. This happened when Ingvar appointed the economist Alan Cronwall. Cronwall willingly became increasingly high-handed in the business press and gave the impression of being IKEA's strong man. Big mistake. With Ingvar as a secondary figure. Sometimes he decided he didn't even have to, he didn't even have time to speak to the founder who had an appointment. That's just, listen, if you're working closely with the founder of a company,

• 51:43David Senra?

  that's a stupid idea.

• 51:46David Senra?

  That's just, that's just not smart. The guy's, the founder's making an appointment with you and you're saying, "I'm too busy to talk to you." That's not a good idea. He was good about enforcing routines and systems, but came in a conflict with the, with the dynamic go-getter. So Cronwall is not how Jan is. Cronwall, he came, he was an academic and a bureaucrat. So he comes in IKEA and he tries to like, set up a hierarchy. But we just, I just got done telling you, Jan kinda kept everything kinda free. He's got laws, he's got a company bible, if you will, but it's not like everything essentially planned, okay? And so, it says, "He came to betray Ingvar's confidence in a shady property deal, and the two parted ways in a highly painful manner." Cronwall was more or less dismissed as a board meeting in front of his members.

• 52:28David Senra?

  So, this is the dynamic, like, the dichotomy of human beings' personalities. Ingvar is wanting to like, to build IKEA as a family, and I have my own personal reservations comparing companies to families. I think like, families are most, rightfully so, operate in more of like a socialistic manner. Companies aren't. Ingvar has a $58 billion net worth. The people working for him don't. So I don't think like, you should lie to your, your, your employees and say that you're family. I mean, you're not sharing resources as a family. So this is something I would never like, I don't know, any times anybody's ever said that to me? Like, I just, I just know that, that they're trying to manipulate me. So anyways. Ingvar is extremely emotional. He'll hug and kiss you. He'll like, he'll want to touch you all the time. He's got like this, this huge emotional aspect to him.

• 53:13David Senra?

  But when you cross him, he can be unbelievably cold and distant. And so we just saw that with, you know, firing somebody in front of everybody is probably not the best idea. But, you know, he, he was, he reacts emotional, or he reacted. Um, I keep forgetting that he's no longer with us. So, uh, you know, he's, he, he, he can be unbelievably, the point that I'm poorly making at this moment is that he's got multiple sides, just like a lot of us do. And that, you know, we can be loving and, and, and accommodating to people we love and that we get along with. At the same time, it's unbelievably cruel and heartless and cold to people that cross us. Um, okay. Okay. So I, this is, I want to talk to you a little bit about,

• 53:57David Senra?

  why, like, how did, like, why didn't Ingvar ever want to go public? You know, wouldn't that have accelerated the growth? And so the, the book actually, um, spends a good amount of time talking about this. So I just want to pull out some highlights because I think it's important. It says, uh, this is, is this a quote from him? Yeah, this is a quote from Ingvar. He says, "Still today, we want to grow at our own pace so that we keep up, not just with what is new, but also develop what we already have." So he doesn't want to keep growing just to grow. What if, like, we should slow, what if we're going too fast and we're not developing the resources we already have, right? "IKEA's strategy has long been to take at least half of our resources to improve what already exists.

• 54:42David Senra?

  The other half to do what is, uh, to do what it is in the future. If, if at a somewhat slower pace than if we had had un, access to unlimited money." Okay. So that's what he talks about. Unlimited money is essentially the public markets. He's like, "We're going to grow at a more slow and deliberate pace, and we think that's going to be better for the overall company." That's something he believed. Now here's the author talking about it, uh, expanding on Ingvar's own words and his beliefs. "Today, everyone has been converted to the conviction that going public would do more harm than good to IKEA in the long run." The perils of a quotation on the stock exchange are exposure to the media and demands for constantly increased profit and expansion regardless of the business cycles of competition and vision.

• 55:26David Senra?

  So he's listing all the stuff that he doesn't want. He doesn't want employees to focus on what the stock price is that day. He doesn't want constant exposure to the media. He's a very private person. He doesn't want external demands for constantly increased profit and expansion. What if he doesn't want to do that? What if it's going to harm his business? And then he doesn't want to compromise on his vision. In addition, Ingvar likes to point out the stock exchange is an expensive solution. Public companies like to distribute one-third of their annual profit to their shareholders. Money that disappears out of the companies and works against building up reserves. And he says IKEA needs to build up reserves in order to take bold decisions.

• 56:10David Senra?

  So this whole idea of like, you know, keeping the money within the company, something we heard from Henry Singleton, something we heard from Warren Buffett, now we're hearing again from Ingvar. You know, he's going to keep the money in-house. And then now Ingvar talks a little bit about this. He says, "It was not only a long life for IKEA." Remember, I started out the podcast talking about, "He wants to give IKEA eternal life." That's a very explicit goal. Eternal life. That's not very common for any entrepreneurs that have heard talk in such explicit terms. So he says, "It was not only a long life for IKEA I wanted to achieve, but also its independence of any one single country." Okay, so now we're getting to a weird part that I'm going to omit almost completely out

• 56:53David Senra?

  of the book because frankly, I don't understand it. There's pictures in the book, so Ingvar leaves Sweden because they have this crazy, crazy tax system and like inheritance laws where essentially if he died, he wanted IKEA to survive, but also to be beneficial to his family and that was impossible. So he lives the last like forty-something years of his life in Switzerland. And as he's emigrating out, he creates what he calls, and the author says he's like downplaying. He says, "It's a unique company structure." And the author's like, "It may be the only company structure like that exists in the world." There's pictures in the book that show... Part of how the company is organized.

• 57:38David Senra?

  It's a series of trusts and these Venn diagrams. And I look at the picture, I'm like, there's no way I can explain this like just with words. You have to look at it. And even then, and it also talks about how Ingvar will only reveal the parts of the company ownership structure. That the law in the specific company that that, in the specific country that that part of the company's structure requires him to do so. So it's largely a secret. And this is extremely complicated. I had a good friend of mine who for a long time was an estate, uh, estate planning attorney. And essentially like when you're a state planning attorney, the vast majority of the people you interact with are supremely wealthy, like super, super wealthy.

• 58:21David Senra?

  And the area that he was practicing in, like it was a, it's in a part of the country that has a huge population of extremely wealthy people. And I'd have many, many conversations with him because it blew my mind. I came from, you know, like if you watch Game of Thrones, like my upbringing is more like Fleabottom. These people are living high garden. And so I would talk to him about all, every week when he was doing this, because it just blew my mind. It opened my eyes up to like an entire world that didn't even exist. There's a book called Family Wealth that goes through, I read probably 15 years ago, that goes through some of these ideas. And it's just completely different how most people think. So I'm going to skip over large parts of that again. If you, you can read about it online. It talks a little bit, but I think the structure has its own Wikipedia page actually.

• 59:04David Senra?

  But I do want to just tell you like how complicated it gets. This is the very beginning of this change. Let me just read this to you. This is after, this is after the ownership structure was, was changed. It says, "Now Ikea had a Danish head office, a Dutch foundation, a Belgian coordinating group, whatever the hell that means, and a founder living in Switzerland. Was Kamprad or Ikea in general still Swedish? Who knows?" And so they call it the inaccessible. It says, "The inaccessible company" is how it's referred to. What a weird term, right? Let me just, and I can read, I'm gonna read two more paragraphs and then I'm gonna move forward because this is something that I don't think any of us are ever gonna have any experience with, but you might be interested in.

• 59:48David Senra?

  "When Ingvar Kamprad decided to go abroad, his ambition was undeniable to give his life work the best possible chance of eternal life." There's that phrase again. "Long after he passed away, he wanted the company to be able to develop and flourish. In his own words, 'As long as there's human housing on our earth, there will be a need for a strong and efficient IKEA.'" But his ambition was further than that. "No one and nothing was to destroy or endanger his business vision with a member of the family or market forces or politicians. Barriers were to be constructed against not only hostile assaults, but also against the danger that lies in apathy. All the dynamism was to be guaranteed as long as humanly possible."

• 1:00:30David Senra?

  Okay, so now I wanna talk about a casual culture, a love of misfits, letting people make mistakes, and then the company bible. And I'm gonna spend a lot of time in the company bible. Okay. So it says, at this point in the book, it says, "The pioneers would be accused of being frivolous in their business methods." So that means like IKEA's a bigger company at this point. Now, since it's growing, they feel the need to put in like more structure. So the pioneers, think of those as like the first like 10 or 12. The book, I think, compares them to like Jesus and the apostles, or excuse me, Jesus and disciples. And obviously Ingvar being Jesus. So it's a different time period in the company history. And so now we're gonna go back to that Jan, you know, person that I talked to, talked to you about earlier.

• 1:01:14David Senra?

  So it says, "The pioneers would be accused of being frivolous in their business methods. At least four times, Jan considered himself fired in his role as the company's perhaps necessary and font terrible and super entrepreneur."

• 1:01:29David Senra?

  It's interesting phrase, right? Fortunately, Ingvar Kamprad has never really had anything against Mavericks, however rowdy they are. So it goes back to seeing people that are like him and giving them leeway that other people would not be given. Says Kamprad remained in the background, at first not restraining these young men bursting with energy. So new lifeblood are coming into the company. The founder has always had a notorious weakness. Some call it talent for testing the limits of ideas and sometimes letting the This is another good idea. So for sometimes letting the rope run out. So what does that mean? Uh, letting the rope run out on a project in order, once and for all, to prove what is wrong.

• 1:02:09David Senra?

  As Jan says, Kamprad preferred them to make mistakes rather than be idle. The time for afterthought soon came and the company's spirits needs were admitted to be as great as the need for external expansion. So this is what I mean about him being extreme. Think about when they say company spirit, that's, that's what we would refer to as company culture. Okay. So gradually this insight would lead to a phenomenon that goes under the name of the IKEA Way. The global company's Bible study that takes. Okay. So I gotta explain this to you. In the 1970s, before I read this book, um, when I was researching before, uh, before I realized I was going to buy the book. No, I think I already ordered a book anyways.

• 1:02:54David Senra?

  I found something online. It's essentially an internal text, company textbook that Ingvar wrote in the 1970s. I'm going to leave it linked in the show notes. Anybody can read it for free. It's called a furniture dealer's testament. Okay. So think about that as the company Bible. So let me read this back to you now that you have the information. It says, um, gradually this insight would lead to a phenomenon that goes under the name of the IKEA Way. The global company's Bible study that takes a furniture dealer's testament as its number one textbook. The IKEA Way trains managers to be spiritual ambassadors, thank cultural ambassadors, out in the empire. And one of the first compulsory lectures was by the rebellious Jan, whatever his last name is. Okay. So now.

• 1:03:38David Senra?

  This is where I'm going to spend a lot of time, probably the majority of the rest of our time together this week, talking about the company bible. First, I need to give you this is basic laws of IKEA before I go, and I'm going to quote extensively from a furniture dealer's testament. The three, the four laws of IKEA, so it says, "For thus have the laws been since the birth of IKEA." So this is like a general framework to organize IKEA. Number one, "A good cash reserve must always be insured." This is something we've seen multiple other entrepreneurs preach. Number two, "All property must be owned." I mean, you have to own the stores and the land that the stores are on. Number three, "All expansion is to be largely self-financed." So it talks about later, when he's going through this like this media crisis in the 1990s

• 1:04:23David Senra?

  about his early ties to Nazism, they, they, they erroneously, one reporter erroneously suggested that some like early like Nazi gave the seed money for IKEA, and that caused Jan to be more emotional than almost anybody's ever seen him before, because he said, he goes, "You could accuse me of murder. Don't ever accuse me of borrowing money." So that's just like insight into his personality. So all expansion is to be largely self-financed. Number four, "There should be no boasting." Alright, so now I want to get into...

• 1:04:59David Senra?

  Let me, okay, so this is in the, so I was pleasantly surprised that in the appendix of this book, they reprint a furniture dealer's testament. Again, this is written in 1976. You could probably read it, half hour, something like that. I'm just going to pull the parts that I thought were interesting. He's got like nine, how many, like, think about this like the 10 commandments, except there's nine, the nine commandments of IKEA. And so he starts off, this is the very first paragraph. "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. This is an objective that carries obligations." That's, those are words written by Ingvar. That could easily have been said, word for word, by Henry Ford.

• 1:05:44David Senra?

  Alright, so we're still in the introduction. "The means we use for achieving our goals are characterized by our unprejudiced approach by doing it a different way." So he's saying, like, what did James Dyson tell us back in the day? "Difference for the sake of it." Ingvar says the same thing. "We're gonna do things differently. And by our aim to be simple and straightforward in ourselves and our relationship with others. Always bear in mind that freedom implies responsibility, meaning that we must demand much of ourselves." Um, he says, uh, so he talks about his, the product range and philosophy. What are they describing? "They also describe the rules and method that we have worked out over the years as cornerstones on the framework of ideas that have made and will continue to make IKEA

• 1:06:29David Senra?

  a unique company." So this is his company bible. This is saying, like, you know chefs, uh, publish, like, cookbooks that you can, you can view the recipes and try them out yourselves? This is exactly what Ingvar is doing here. Number one, the product range is our identity. And there's in this range, there's in, under, like, each heading, there's a bunch of subheadings. So the first one's the product range of our identity. I'm gonna read my note to you. "Quality only where it matters to the customer. Plus, it is the entire company's responsibility to keep our costs low so we can keep our prices low. And forever. This cannot change." Okay, so, um, I'm gonna just pull out some quotes here. Qual- this is an interesting idea. "Quality must never be an N in itself. It must be adjusted to the consumer's meat, needs."

• 1:07:13David Senra?

  And at first, I read that, I was like, ugh! I don't like that idea at all. And then when he explains, I was like, oh, okay, that makes sense. He says, "A tabletop, for, for example, needs a more durable surface than a shelf in a bookcase." Okay? So, would it be over-improving on quality at the expense of the customer's needs to make the, the bookcase from the same materials as the tabletop? That made way more sense. "In the former case, a more expensive finish offers the customer long-lasting utility." Because your tabletop has to be more high-quality in the bookshelf, right? "Whereas in the latter, in the bookshelf, it just hurts the customer by adding to the price. Quality must always be adapted to the consumer's interests in the long term." So now, why is this obsession with low price? It is the many whom we aim to serve.

• 1:07:57David Senra?

  The concept of a low price with a meaning makes enormous demands on all of our coworkers. That includes product developers, designers, purchasers, office and warehouse staff, salespeople, and all other cost bearers who are in the position to influence our purchase prices and all other costs. Meaning that we, if our goal is to aim, it just said, we are aiming to serve the many. That means it doesn't, we can't just reduce costs in our stores. It has to reduce costs in our warehouse staff, in our offices, everywhere, all other costs. He didn't say some other costs, he said all other costs. And he says, "Our basic policy of serving the many can never be changed."

• 1:08:40David Senra?

  Uh, the second, uh, it says, "The IKEA spirit is a strong and living reality." Um, so I'm just gonna say, this is my note, "Company spirit was easier to maintain when we were smaller, plus, don't waste your life in a job you hate." Those are two great ideas. So he says, "Things were more concrete in those days. The readiness to give each other a helping hand with everything. The art of managing on small means." He's, he's like nostalgic for the early days again. Uh, "The art of managing on small means, of making the best of what we had. The cost consciousness to the point of being stingy. The humbleness, the unconquerable enthusiasm, and the wonderful sense of community through thick and thin."

• 1:09:23David Senra?

  And so what does this have to do with not, uh, "Don't wasting your life in a job you hate." He says, "If you are not enthusiastic about your job, one-third of your life goes to waste."

• 1:09:35David Senra?

  Uh, number three, uh, profit gives us resources. So another way to think about this is profit and why it is important. To achieve our aim, we must have resources, especially in the area of finance. We do not believe in waiting for ripe plums to fall into our mouths. We believe in hard, committed work that brings results. Profit is a wonderful world. Let us start by stripping the word "profit" of its dramatic overtones. It is a word that politicians often use and abuse. Profits give us resources. So, this is what I love about the fact that human nature just does not change. He's talking about at the time, he's writing this in 1970s, you know, politicians are demonizing people that are successful,

• 1:10:20David Senra?

  demonizing companies that are making profits. It's happening today. It will happen 40 years from now. Just realize that we're not coming up with unique ideas. We're just replaying over and over again and arguing about the same things over and over again. It's bizarre. The aim of our effort to build up financial resources is to reach a good result in the long term. Profit forces us to develop products more economically, to purchase more efficiently, and to be relentlessly stubborn in cost savings on all kinds. That is our secret and that is the foundation of our success. Number four, reaching good results with small means. Four, five, and six, there's three words that can summarize this whole section I'm about to read to you.

• 1:11:03David Senra?

  Be resourceful, simplicity, and difference. Those are also great foundations to build any business on. Alright, so he says, "That is an old IKEA idea that is more relevant than ever. Time after time, we have proved that we can get good results with small means or very limited resources. Wasting resources is a mortal sin. It is hardly an art to reach set targets if you do not have to count the cost. Any architect can design a desk that will cost $5,000, but only the most highly skilled can design a good, functional desk that will cost $100. Expensive solutions to any kind of problem are usually the work of mediocrity.

• 1:11:46David Senra?

  We have no respect for a solution until we know what it costs. An IKEA product without a price tag is always wrong." Before you choose a solution, look at it in relation to the cost. Only then can you fully determine its worth. Waste of resources is one of the greatest diseases of mankind. Many modern buildings are more like monuments to human stupidity than rational answers to needs. But waste costs us even more in little everyday things. Filing paper that you will never need again. Spending time... He's just giving examples of how a lot of companies waste time and resources. Spending time proving that you were right anyway. Postponing a decision to the next meeting because you do not want to take the responsibility now.

• 1:12:31David Senra?

  Telephoneing when you could have just easily wrote a note or sent a fax. So a lot of younger people listening are not going to understand that. Long-distance calls usually cost money. The list is endless. Use your resources the IKEA way. Then you will reach good results with small means. Number five, simplicity is a virtue. The more complicated the rules are, the harder they are to comply with. Complicated rules paralyze. It's kind of... Now I'm reading that. I was just telling you that the culture is kind of like casual, more relaxed. It kind of makes sense if he believes like overcomplicated rules, they're too hard to comply with. Historical baggage, fear, and unwillingness to take responsibility are the breeding ground for bureaucracy.

• 1:13:14David Senra?

  Indecisiveness generates more statistics, more studies, more committees, more bureaucracy. Bureaucracy complicates and paralyzes. Planning is often synonymous with bureaucracy. Do not forget that exaggerated planning is the most common cause of corporate death. Exaggerated planning constrains your freedom of action and leaves you less time to get things done. Oh, that sounds exactly like Henry Singleton. Complicated planning paralyzes. So let simplicity and common sense guide your planning. Simplicity is a...

• 1:13:51David Senra?

  Simplicity is a fine tradition among us. Simple routines have a greater impact. Simplicity in our behavior gives us strength. And six...

• 1:14:03David Senra?

  Let me just read that part, sorry. Is doing it a different way. By always asking why we are doing this or that, we can find new paths. By refusing to accept a pattern simply because it is well established, we make progress. Our protest against convention is not protest for its own sake. It is a deliberate expression of our constant search for development and improvement.

• 1:14:29David Senra?

  Number seven, concentration is important to our success. The general who divides his resources will be defeated. For us too, it is a matter of concentration, focusing our resources. We can never do everything, everywhere, all at the same time. We must concentrate for maximum impact, often with small means. Now, he also, so everybody, you're probably nodding around, yeah, that makes sense. But I love he makes the additional point that if, when you're forced to concentrate on one thing, then inevitably that means you have to be okay having other parts that you're not concentrating on be be less beneficial. So he says, concentration means that at certain vital stages, we are forced to neglect otherwise important aspects. The things about, if a trade off is easy, then the trade off is probably not important.

• 1:15:14David Senra?

  What he's bringing to our attention here is like, yeah, you need to concentrate your resources, but you have to understand that decision to where to concentrate can be hard because you have other good opportunities. You've got to let the other good opportunities like diminish or wither away to focus on the great opportunity. That's what makes the trade off so hard. Concentration, the very word means strength. Use it in your daily work and it'll give you results. Number eight, taking responsibility is a privilege. There are people at all levels in every type of company and community who would rather make their own decisions than hide behind those made by others. These people dare to take responsibility. The fewer such responsibility takers a company or community has, the more bureaucratic it is.

• 1:15:59David Senra?

  Constant meeting and group discussions are often the result of unwillingness or inability on the part of the person in charge to make decisions. Take, go back to the famous quote by David Ogilvy. He says, "Go to all the parks in your cities, you'll never see a statue dedicated to a committee." He's telling you that companies are run best by usually one person making, like, leading the way and making the hard decisions. Taking responsibility has nothing to do with education, financial position, or rank. Responsibility takers are essential for progress. I love the part, because think about Ingvar, becomes one of the most successful entrepreneurs of all time. He's dyslexic, doesn't really have much form of education, and did not have much, you know, financial position or rank when he started. "Only those who are asleep make no mistakes."

• 1:16:42David Senra?

  There's that quote against, "Making mistakes is the privilege of the active." Very unique way of thinking about it, right? "The fear of making mistakes is the root of bureaucracy and the enemy of development." It is always the mediocre people who are negative, who spend their time proving that they were not wrong. The strong person is always positive and looks forward. That's why in a lot of the early episodes of Founders, I had that "Critics don't know shit" segment. Because I think what he's right. It's the mediocre person who is negative, who spend their time proving that they were not wrong. The strong person is always positive and just moves forward. Okay, number nine. "Most things still mean to be done a glorious future."

• 1:17:24David Senra?

  That is how he ends a lot of his letters. He's got his own like motto that we saw with Stan Lee, right? Alright, so this section, the summary is, "Don't quit. Be wary of experience as an excuse to not try." That's another Henry Ford-ism. "Don't waste even 10 minutes and be a positive fanatic." That's a great, great term. Alright, so he says, "The feeling of having finished something is an effective sleeping pill. A person who retires, feeling that he has done his bit, will quickly wither away. A company that feels it has reached its goal will quickly stagnate and lose its vitality. Happiness is not reaching your goal. Happiness is being on the way.

• 1:18:06David Senra?

  The positive joy of discovery must be our inspiration in the future too. Experience is a word to be handled carefully. Experience is a brake on all development. Many people cite experience as an excuse for not trying anything new."

• 1:18:23David Senra?

  Now, this is extremely important. Bear in mind, your time is your most important resource. You can do so much in 10 minutes. 10 minutes, once gone, are gone for good. You can never have them back. 10 minutes is not just 1/6 of your hourly pay. 10 minutes is a piece of yourself. Divide your life into 10 many units and sacrifice as few of them as possible in meaningless activity. Most of the job remains to be done. Let us continue to be a group of positive fanatics who stubbornly and persistently refuse to accept the impossible, the negative. What we want to do, we can do and will do together.

• 1:19:08David Senra?

  A glorious future. And that's the end of the company Bible. Now, I want to close back on not Ingvar, the family man, not Ingvar, the entrepreneur, but Ingvar, the person. And at his core, he was a misfit. And so, I think this is a good place to leave the story. He says, or it says, the author says, "He comes back again and again with painful self-searching and an almost bitter undertone to his defects. A hopeless favorite expression he uses both about himself and all too often about other people when he is dissatisfied.

• 1:19:51David Senra?

  Anyone who sees IKEA's monumental progress may find it difficult to understand why Ingvar wrestles with self-doubt. Nonetheless, still in the autumn of his years and despite his astonishing life's work, there is an outsider within him who always feels threatened. A small, naive, 17-year-old entrepreneur fussing over a lost dollar and crying when he's misunderstood. Even today, behind this multinational tycoon is a country boy with a fierce sense of being an underdog, standing on tiptoes and peering uneasily through adult eyes. Am I good enough?"

• 1:20:36David Senra?

  Ingvar recognizes himself as an outsider, and in that way, he is one of us all. He knows what it's like to be odd, to fall outside of the establishment, to feel rage against injustices. He keeps coming back with delight to an old headline in a popular tabloid. "The Furniture King Who Does Not Look Like A Capitalist." The article describes him as a troublesome capitalist who is far too likeable. That's just what he wants to be. A rebel and friend of the people, a patriot and a capitalist, all in the same bargain box. That's where I'm gonna leave the story.

• 1:21:21David Senra?

  If you want to read the full story, I can't recommend this book enough. This is a book I think I'm gonna go back to many times to reread. There's so much more in the book that I have to leave out. Obviously, it'd be an eight-hour podcast, I'd just read every word of the book to you. But if you want to support the author, if you want to support yourself, the author and the podcast at the same time, if you're going to buy the book, buy the book using the link that I'll leave in the show notes or the link that you can find at founderspodcast.com. You'll support yourself by getting a great book that I think there's ideas in this book that you can keep with you and pay dividends for a lifetime. You're supporting the author, hopefully he's still alive, or whoever owns the publishing,

• 1:22:01David Senra?

  because he spent, you know, several years, countless hours compiling the book for us, for us to learn, for our enjoyment, and you'll support the podcast because it's an Amazon affiliate link and they'll send me a little bit of money if you choose to buy the book at no additional cost to you. Thank you very much for listening, thank you very much for the support, and I will talk to you next week.