Business Life in Diagon Alley
Harry Potter books 1-6
Hogwarts Shield

5. The Weasley Twins as Entrepreneurs

When Harry Potter goes to Hogwarts by train for the first time, he meets the 11-years old Ron Weasley and his family including the twins Fred and George, both 13 years old. The twins are very lively and are always making jokes. Ron explains:

Throughout the books the twins are a lively element in the story. They have three elder brothers who have respectable careers at Hogwarts, but Fred and George seem to have other plans. Their mother complains:

During books 4 and 5 Fred and George develop a vision of starting a joke shop where they can sell magical jokes of their own invention. Especially in book 5 the author tells the detailed story of the two entrepreneurs and their project all mixed up with the other parts of the story.

The twins take care not to show their plans too openly their mother does not think running a joke shop is a suitable career for them (5-6-98).

5.a Fred and George's Strategy

At the beginning of book 5 the twins are 17 years old. They have a strategy consisting of:

  1. Market research to find out exactly what the average Hogwarts student requires from a joke shop
  2. Carefully evaluate the results of the research
  3. Then produce products to fit the demand

In Fred's wording:

5.b Financial Troubles

The twins are developing and selling magical jokes through books 4 and 5. In the beginning of book 4 Fred declares:

The twins attend the Quidditch World Cup and bet a large amount with Ludo Bagman, one of their father's colleagues at the Ministry of Magic. They bet on the result of the World Cup, and the twins win, but Ludo Bagman never pays them, meaning that Fred and George loose the money.

At the end of book 4 Harry Potter gives his winning from the Triwizard tournament to the twins as an initial capital:

Later Harry gets cold feet because of the gift he does not want the twins' parents to be angry with him because of his financing of the joke shop (5-9-156).

In the beginning of book 5 the twins have the money, but they are still in need of premises for their shop. For the time being they use mail-order and advertisements in the Daily Prophet (5-6-97 f.).

5.c Product Development and Marketing

Jokes described in book 4:

1. Ton-Tongue Toffees: These toffees make your tongue grow. When leaving for the Quidditch World Cup from home, the twins try to smuggle as many toffees out of the house as possible, but their mother searches them:

2. Canary Creams transform you into a large canary:

In book 5 the twins choose the name Weasleys' Wizarding Wheezes and develop a lot of different joke products for their new firm:

3. Extendable Ears let you listen to what is happening on the other side of a door:

4. Skiving Snackboxes is a range of sweets that makes you ill. George:

Excerpt from the above: The twins are aware of that maybe the promise is not correct, but they have a good idea of which messages that will sell the product:

They are so full of ideas that they even might collide with the rules their father is enforcing as a civil servant in the Ministry. Now they are negotiating with the rather fishy character Mundungus Fletcher:

5. Nosebleed Nougat: The twins have an offer for Ron. It is a bargain, because the twins have no antidote yet:

6. Fainting Fancies User Test: Hermione is a newly-appointed prefect, and she wants to stop Fred and George from paying first-years for taking part in the user test:

GALLONS OF GALLEONS!

Pocket money failing to keep pace with your outgoings?

Like to earn a little extra gold?

Contact Fred and George Weasley, Gryffindor common room, for simple, part-time, virtually painless jobs. (We regret that all work is undertaken at applicant's own risk.) (5-12-200)

7. Projectile-Vomiting: Harry, Ron, and Hermione try to make their homework. It is difficult, because Fred and George have finally perfected the vomiting part of the Skiving Snackboxes. They take turns to demonstrate it to a cheering and whooping crowd:

Harry, Ron and Hermione are disturbed by the sounds of retching, cheering and the sound of Fred and George taking advance orders from the crowd. Harry wants Hermione to use her prefect's rights to stop the show.

8. Fever Fudge: Fred and George are wondering how to avoid Quidditch practice on a stormy day but the Fever Fudge is not quite ready yet:

9. Headless Hats: Once again, the common room was packed and full of shrieks of laughter and excitement; Fred and George were demonstrating their latest bit of joke shop merchandise, and Hermione cannot disguise her admiration:

In chapter 26, the twins find a solution to the Fever Fudge boils, and the development of the Snackboxes is finished (5-26-506)

Joke described in book 6:

10. Exploding Telescope: The following summer Harry stays in Fred and George's bedroom, which serves as a temporary warehouse for the twins. Hermione and Ron calls Harry in the morning, and they are discussing what is ready for the joke shop:

In chapter 15 it is described how Fred and George are able to distribute love potions from Diagon Alley to their customers at Hogwarts in spite of the school's general prohibition of Fred and George's jokes. They use their Owl Order Service distribution:

Peruvian Instant Darkness Powder described at page 6-29-576.

5.d Leaving Full-time Education

During book 5 the Headmaster of Hogwarts Albus Dumbledore is forced to leave, and the new High Inquisitor Dolores Umbridge takes all of the fun out of school life. Fred and George decide that they won't care about getting into trouble any more. With Dumbledore gone they reckon a bit of mayhem is exactly what the new Head deserves. (5-28-552 f.) The twins set up a magical firework all over the school, and Umbridge don't know how to stop it. From a commercial point of view it is a pity that they have used all of their stock for the happening but Fred and George are not forgetting to take advance orders:

The twins continue to challenge the new head of school, and some days later they are exposed with a Portable Swamp. Because of the shouting most of the school is assembled at the Entrance Hall:

Caught in the act, they prepare to flight from the school with their brooms. Still, they take advantage of any chance to distribute their marketing message:

The twins fly away to number 93, Diagon Alley, and they experience an immediate success. When the other pupils arrive at King's Cross Station for the summer holiday, Fred and George are both wearing brand-new jackets in some lurid green, scaly material. Ron takes a close look at the twins' new clothes:

The following August Harry, Ron, Hermione, and Ginny pay a visit to the shop, and Fred is proud of the WonderWitch products:

5.e Success and Further Plans

Mrs. Weasley approves the business: In book 6, Harry comes to see Ron and his family. Fred and George have moved to a little flat over their joke shop because they are very busy, and Mrs. Weasley must confess:

When Harry and his friends visit the shop in August, the shop is so packed with customers that they cannot get near the shelves. Seen from the street:

Why Are You Worrying About You-Know-Who?

You SHOULD Be Worrying About U-NO-POO

the Constipation Sensation That's Gripping the Nation! (6-6-112 f.)

The twins have a shop worker named Verity. She wears magenta staff robes (6-6-116).

A Serious Product Line: The twins have experienced a boom in a more serious product line: Protecting gear like Shield Hats. The reason is that many people working at the Ministry cannot do the Shield Charms they are supposed to know. For this reason the Ministry has bought 500 hats for the support staff. This has been the reason for the twins to expand into more products: Shield Cloaks, Shield Gloves, etc.:

A New Branch in Hogsmeade? When Harry and his friends visit Hogsmeade, Zonko's Joke Shop appears to be closed (6-12-228). At Ron's birthday Fred shows up and tells, that he and George are thinking of buying Zonko's as a new branch of their business. The new shop would be a way to reach their Hogwarts customers. On the other hand the twins experience problems with strict security rules on Hogwarts:

If the twins continue this way, then it won't be long before they can make a proud statement as "Weasleys' Wizarding Wheezes - London, Paris, Hogsmeade" just like the fashion advertisement at the Quidditch World Cup: "Gladrags Wizardwear - London, Paris, Hogsmeade (4-8-109)"

New dresses once again: In the end of book 6 Fred and George appear wearing jackets of black dragonskin. (6-30-597)

5.f Fred and George's Product Range

In order of appearance:

Ton-Tongue Toffees

4-6-79

Canary Creams

4-21-402

Extendable Ears

5-1-65, 5-12-205, 6-6-121

Fever Fudge

5-18-336

Headless Hats

5-24-477

Weasleys' Wildfire Whiz-bangs Basic Blaze box and

Weasleys' Wildfire Whiz-bangs Deflagration Deluxe

5-28-558 f.

Portable Swamp

5-29-595

U-NO-POO the Constipation Sensation That's Gripping the Nation!

6-6-113

Skiving Snackboxes: Nosebleed Nougat

5-12-204, 5-17-327, 6-6-113

Trick wands, the cheapest merely turning into rubber chickens or pairs of pants when waved; the most expensive beating the unwary user around the head and neck

6-6-114

Quills in Self-Inking,

Spell-Checking and

Smart-Answer varieties

6-6-114

Reusable Hangman - Spell It Or He'll Swing!

6-6-114

Patented Daydream Charms

6-6-114

Muggle Magic Tricks

6-6-115

Shield Hats,

Shield Cloaks,

Shield Gloves

6-6-115

Instant Darkness Powder imported from Peru

6-6-116, 6-29-576

Decoy Detonators

6-6-116

Joke Cauldrons

6-6-116

WonderWitch products - love potions

6-6-117

Guaranteed Ten-Second Pimple Vanisher - Excellent on everything from boils to blackheads

6-6-117

Pygmy Puffs - Miniature puffskeins

6-6-118

Patented Daydream Charms are described this way:

'One simple incantation and you will enter a top-quality, highly realistic thirty-minute daydream, easy to fit into the average school lesson and virtually undetectable (side-effects include vacant expression and minor drooling). Not for sale to under-sixteens.' (6-6-114)

5.g SWOT Diagram for Weasleys' Wizarding Wheezes

Strengths

Weaknesses

The twins have a developed strategy (5-12-205)

Appealing products and a clear marketing message (5-29-593 etc.)

Business is booming (5-38-764)

Continued development of new products with promising business opportunities: Shield Hats, etc. (6-6-115)

New channel for distribution: Owl order service (6-15-287)

Use of toxic ingredients that might harm the customers (5-9-156)

Fred and George may be attacked by Voldemort, because they are showing they despise him (6-6-112 f.)

Opportunities

Threats

Wizards' children seem very interested in magical jokes (6-6-112)

The Ministry of Magic wants protecting tools for the employees (6-6-115)

"We could all do with a few laughs" (4-37-794 f.)

The magical society is at war against Voldemort customers are scared in the magical society (6-6-112)

Strict security measures against bringing magical joke products to Hogwarts (6-6-112)

5.h Analysis of the Weasley Twins as Entrepreneurs

Does the twins' business observe Schumpeter's six criteria from section 2.b?

Schumpeter's six criteria from section 2.b:

Evaluation of the twins' business

Criteria met?

1

The innovation is a discontinuous, irreversible change

Fred and George open a new shop in Diagon Alley with a lot of new products.

Yes

2

The innovation is the introduction to the market, not the preceding invention of the product or service

The twins at first invented the jokes, and afterwards introduced them to the market. See comment below.

Yes

3

It is carried through by a newly established entrepreneur

They are newly established entrepreneurs who have not been shopkeepers before

Yes

4

It is carried through in a newly established firm

Weasley's Wizarding Wheezes is a newly established firm

Yes

5

It is carried through with borrowed money

The twins have financed the shop with the gift from Harry Potter. See comment below.

Yes?

6

It is carried through with resources that so far has been used elsewhere

The twins are using premises that must have been used to another purpose. They have hired at least one shop worker (6-6-116)

Yes

Comments:

Which types of innovation? In section 2.b is shown a list of five possible kinds of innovation:

Schumpeter's five types of innovation from section 2.b:

Evaluation of the twins' business

Criteria met?

1

The introduction of a new good

See the impressing list in section 5.f

Yes

2

The introduction of a new method of production

No, as production methods are not mentioned (section 3.a)

No

3

The opening of a new market

For example that the Ministry of Magic wants protecting tools for the employees (6-6-115)

Yes

4

The conquest of a new source of supply of raw materials

No, as production methods are not mentioned (section 3.a)

No

5

The carrying out of the new

For example the new channel for distribution: Owl order service (6-15-287)

Yes

Summary: Schumpeter's six criteria for innovation are met in an exemplary way and to a higher degree than it would ever be possible in real life. There are three kinds of innovation involved: New goods, opening of a new market, and the carrying out of a new organization and I believe that J.K. Rowling has created this regularity without knowing Schumpeter's criteria but out of sheer wish to tell an interesting story.

'Anyway, where's the fun without a bit of risk?' Fred Weasley, 4-12-210