My good friend Stefan Engeseth’s Sharkonomics hit China a year ago, and it’s been so successful that the second edition is now out. It looks smarter, too, with its red cover, and I’m sure Chinese readers will get a decent taste of Stefan’s writing style, humour and thinking.
I even hope this will pave the way for translations of his earlier works, especially Detective Marketing and One: a Consumer Revolution for Business (the latter still remains my favourite of his marketing titles).
I’ve written a brief quote for Sharkonomics and the publisher (with some nudging from Stefan) has taken the time to make sure my Chinese name is accurately recorded, rather than a phonetic translation of my Anglo transliteration, which, of course, then wouldn’t be my name.
Stefan’s inventive and innovative thinking might seem left-field sometimes, till some years pass and people realize he was right all along. Take, for example, Google wanting to build a high-tech neighbourhood in downtown Toronto, announced in October. Notwithstanding the hassles Google has created on its own turf in Silicon Valley, it’s the sort of project we might expect from the giant now. But would we have expected it in 2007? Probably not, except Stefan did.
In 2007 (though he actually first floated the idea a year earlier), Stefan blogged about his idea for Google Downtown—why not make real what Google Earth does virtually? Why not shop at places that already know all your personal preferences, if that’s where things are heading? The town would have free wifi and you’d be paying for it with ‘your self’ (the space, I’m sure, was intentional). In 2008, 500 people heard his plans at a conference and laughed. The following year, he met Eric Schmidt and mentioned it to him. Eric paused and didn’t laugh—and maybe the idea sunk in.
It’s not the first time Stefan has hatched an idea and it gained legs, from Coca-Cola delivering its product through taps to Ikea making flat-pack fashion—both have wound up being done, though the latter not quite in the way Stefan envisaged.
In an age of social media, you would think it was the most stupid thing to try to shut down the biggest online community you have.
Ikea has done just that, on IP grounds, against Ikea Hackers, by getting their legal department to send Jules Yap, its founder, a cease-and-desist letter after her site had been going for eight years. In that time she had sent customers to Ikea, after they were inspired by the new ideas her community had on doing new things with Ikea furniture.
There are arguments that Ikea could have been liable for any injuries sustained from the “hacks”, but that’s daft. Are we really that litigious as a society, prepared to blame someone for something we ourselves freely chose to do? Ikea has instructions on how to build their furniture, and it’s your own choice if you are prepared to go against them.
And eight years is an awfully long time to bring a case against someone for trade mark usage, rendering this claim particularly weak.
There are other Ikea-hacking websites and Facebook pages as well—so it’s even dumber that Ikea would go after one with such a huge community, a website that has an Alexa ranking currently in the 20,000s (in lay terms: it has a huge audience, potentially bigger than that of Ikea’s corporate site itself in Jules’s country, Malaysia). Jules says that she has to take down the ads as part of her settlement for being able to retain the site—ads that simply paid for her hosting, which she might not be able to afford to do any more. (Some fans have offered to host for free or provide new domain names.)
The Ikea Hackers logo doesn’t look remotely like the Ikea one, which would readily imply there was no endorsement by the Swedish company.
Therefore, Ikea’s statement, on its Facebook, holds very little water.
Vi är glada för det engagemang som finns för IKEA och att det finns communities runt om i världen som älskar våra produkter lika mycket som vi gör.
Vi känner ett stort ansvar mot våra kunder och att de alltid kan lita på IKEA. Det är viktigt för oss att värna om hur IKEA namnet och varumärket används för att kunna behålla trovärdigheten i varumärket. Vi vill inte skapa förvirring för våra kunder om när IKEA står bakom och när vi inte gör det. När andra företag använder IKEA namnet i kommersiellt syfte, skapar det förvirring och rättigheter går förlorade.
Därför har Inter IKEA Systems, som äger rättigheterna till IKEA varumärket, kommit överens med IKEA Hackers om att siten från slutet av juni 2014 fortsätter som en fan-baserad blog utan kommersiella inslag.
Essentially, it uses the standard arguments of confusion, safeguarding its trade mark, and—the Google translation follows—‘When other companies use the IKEA name for commercial purposes, it creates confusion and rights are lost.’
This can be fought, but Jules elected not to, and her lawyer advised against it. It’s a pity, because I don’t think she received the best advice.
On Ikea’s Swedish Facebook page, some are on the attack. I wrote:
I would hardly call her activity ‘commercial’ in that the ads merely paid for her web hosting. I doubt very much Jules profited. But I will tell you who did: Ikea. She introduced customers to you.
While your actions are not unprecedented, it seems to fly in the face of how one builds the social aspects of a modern brand.
The negative PR you have received from this far outweighs the brand equity she had helped you build. It was a short-sighted decision on the part of your legal department and has sullied the Ikea brand in my mind.
This won’t blow over. It’s not like politics where people are disinterested enough for all but the most impassioned to retain memory of a misdeed. (For example, does Oravida still mean anything to anyone out there?) Ikea is a strong brand, and mud sticks to them. Some years ago, I met a woman who still had a Nestlé boycott in place after the company’s milk powder incidents of the 1960s. And all of a sudden, Ikea’s alleged tax fraud (see here for the SVT article, in Swedish) or the airbrushing of women out of its Saudi Arabian catalogue come to mind. They’re things most people forget, because they go against the generally positive image of an organization or Ingvar Kamprad himself, until there’s some misstep from within that shows that things are rotten in Denmark—or in Sweden, as the case is here. Or is it the Netherlands, where its company registration is?
Brands are, in particular, fragile. I have maintained for over a decade that brand management is increasingly in the hands of the audience, not the company behind it—something underpinning my most recent academic paper for the Journal of Digital & Social Media Marketing. We all know that there must be as much consistency between the views of the brand held by the organization and those held by the public. The greater the chasm, the weaker the brand equity. Here, Ikea is confirming the worst of its behaviour done in the name of its brand, all for the sake of some euros (I won’t say kronor here)—meaning the consistent messages are not in clever Swedish design, but between what it’s doing in this case and what it allegedly does in Liechtenstein.
And since the foundation that controls Ikea is technically not for profit, then it’s a bit rich for this company—accused of tax avoidance by calling itself a charity—to be calling Jules’s activities ‘commercial’. It is hypocritical, especially when you bear this in mind:
In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation’s nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.
The tax haven secret trust the companies use is legal, says Ikea, which is why it pays 3·5 per cent tax. I have little doubt that the complex structure takes advantage of laws without breaking them, and Kamprad was famous for departing Sweden for Switzerland because of his home country’s high taxes. The cease-and-desist letter probably is legal, too. And they show you what mentality must exist within the organization: forget the Swedishness and the charitable aspects, it’s all about the euros.
My good friend Stefan Engeseth’s Sharkonomics hit China a year ago, and it’s been so successful that the second edition is now out. It looks smarter, too, with its red cover, and I’m sure Chinese readers will get a decent taste of Stefan’s writing style, humour and thinking.