Founding an international company
The idea for the modern vacuum cleaner was born in 1908, on Kärtnerstrasse, the most famous shopping street in Vienna., Axel Wenner-Gren, a Swedish businessman, was visiting the Austrian capital and while out on a walk, caught sight of an awkward-looking machine in a shop window. And so this indispensable household product came into being.
Wenner-Gren spotted the Santo vacuum cleaner, an American machine that was also being sold in Europe. It had a motor and a pump, weighed 20 kilos, and was sold for the daunting price of SEK 500 kronor – the equivalent of over SEK 20,000 in today’s currency. If the machine coule be made lighter and cheaper he could sell one in every home. It was there and then that Wenner-Gren hatched the first idea that was to become Elektrolux.
He laid the groundwork for the company’s global success in vacuum cleaners and refrigerators during ten intense years following the First World War.
In contrast to many other company founders in Sweden at that time, he was neither an inventor nor an engineer. He was, however, a sales genius. Wenner-Gren came up with a brand new approach in home selling. The salesman demonstrated the vacuum cleaner in the home and customers could buy it with an installment plan.
Axel Leonard Wenner-Gren was born on June 5, 1881, at Urhagen manor in Uddevalla, Sweden. There he spent his childhood and after elementary school attended Uddevalla five-year secondary school, where his favorite subjects were geography and mathematics. His interest in geography led to some successful stamp trading. In his attic, Wenner-Gren found his father’s old business correspondence and discovered several valuable Swedish and English stamps on the envelopes.
Inspired by this collection, Wenner-Gren set about trading on a grander scale. He spent school vacations with his aunt Caroline in Lysekil. With a cannery located close by, he found the manufacturing process left metal strips as waste. Wenner-Gren wove them together the way he had woven paper strips in school to make rugs and baskets, which he sold as souvenirs to tourists. It was a great success, so he hired friends to help produce them on a larger scale. In a corner of the attic he established a cottage industry, sending his younger friends out onto the streets to sell the products.
At the age of 15, after completing school, Wenner-Gren accepted a position with a grocery import firm in Gothenburg. He was an ambitious young man who took piano lessons at the YMCA on his lunch hour and studied French, German and English in the evenings.
In the summer of 1902, when he was 21 years old, Wenner-Gren moved to Germany and enrolled at the Berliner Handelsakademie. He finished the program in half the allotted time, graduating after one year. But he was running out of money and it was time to look for work. Wenner-Gren began by looking for Swedish companies with offices in Berlin. He found the company Separator, where he applied for a position. After his ninth application, the company finally relented and gave the stubborn youth a job, taking the inventory of its spare parts warehouse. Once Wenner-Gren had the chance to try his hand at several other tasks, he was sent out to solve a problem with a malfunctioning separator. He succeeded in correcting the problem and brought back several orders for new separators at the same time. Separator therefore took Wenner-Gren on as a traveling salesman. He rapidly became the company’s top performer. Despite his new position and success, he soon felt it was time to move on. He quit in 1904 and began to sell agricultural engines, which turned out to be of inferior quality.
It was during this time that Wenner-Gren visited Vienna in1908 and saw a Santo Staubsauger vacuum cleaner in a shop window. This, he realized, was the product he had been looking for that was needed in every home. In every home prospective customer was waiting.
Wenner-Gren put all his energy and resources into developing and selling his vision of a vacuum cleaner. He rapidly contacted the Santo’s American manufacturer in Philadelphia, offering to act as their European representative. The existing general agent in Europe was Gustav Robert Phaalen, an Austrian businessman with interests in Vienna and Berlin. Wenner-Gren eventually began working with Phaalen, heading up Santo Staubsaug Apparate Gesellschaft in Berlin. When a conflict led him to resign a couple of years later, Wenner-Gren left behind an extremely effective sales organization.
In 1912, Wenner-Gren returned to Sweden. Two companies, Elektromekaniska and AB Lux, had started manufacturing copies of the American Santo vacuum cleaner. AB Lux was a manufacturer of kerosene lamps for outdoor use, but around 1910, following electrification, it was left with excess production capacity and had started looking around for new product areas. AB Lux had been founded in 1901 in Stockholm. In its early years, it manufactured indoor lamps, but q