In 2008, Switzerland decided that all guinea pigs had to have partners. Explaining that these cuddly rodents are social creatures, the Swiss government said it was abusive to make them live alone. If one died, a companion had to replace it.
Of course, at this point, human ingenuity takes over.
When your guinea pig dies, you could have a perpetual problem. If you buy a young friend for the surviving “partner,” sooner or later that “survivor” dies and you need another partner. Over and over you wind up with an older and younger pair of pets. The young one moves into the old slot and the cycle repeats itself.
But then, Priska Küng got an idea.
At 50 Swiss francs for a castrated male and 60 Swiss francs for a female, she started to rent out guinea pigs to grieving families. Then, once the older one passed, you could give back the rental pig. She even returned half the fee.
Somewhat similarly, women need party dresses temporarily and then are happy to give them back. The answer was Rent the Runway.
As Jenn Hyman tells it, she and her business partner were speeding to an appointment with Diane Von Furstenberg when the designer’s assistant said not to come. Hyman said “we’re cutting off; we’re cutting off,” and soon appeared at her office, seemingly ignorant of the canceled appointment.
Von Furstenberg did listen to their party dress rental plan, set up several introductions, and they were on their way. After using their own savings and securing some funding, the two partners established a party dress inventory for an online rental business.
Our Bottom Line: Entrepreneurs
Economist Joseph Schumpeter (1883-1950) tells us that entrepreneurs are the source of “creative destruction” because their businesses render others obsolete. With their new products and processes, entrepreneurs create jobs, progress and productivity. They change consumer habits, develop new means of production, and new forms of economic organization. Not necessarily concerned with risk, they are unusually focused on making a difference in the world.
I know that rent a guinea pig and Rent the Runway represent two very different business models. But we could say that the people who started them were entrepreneurs.
My sources and more: Thanks to marginalrevolution for alerting me to the Swiss guinea pig law that took me to more about 2008 legislation. and the rent-a-guinea pig business. However, my one recommendation today is the Rent the Runway podcast episode of How I built This. Also, you might want to read more about Joseph Schumpeter at econlib.
Please note that the Schumpeter paragraph in Our Bottom Line was previously published in a past econlife.