According to a study by the Small Business Administration, more than 70 percent of startup businesses fail within the first 10 years of operation. The high risk factor that accompanies these first-time business ventures scares off plenty of budding entrepreneurs before they’ve even taken out a loan, let alone gotten their feet wet in an investment.
But ‘U’ alum Elizabeth Edwards intends to end the misconceptions of entrepreneurship with her book “Startup: The Complete Handbook for Launching a Company for Less.” Though not a writer by trade (she studied psychology at the University), Edwards made the “Top 100 Books for Business — New Business” list on Amazon during her book’s first week on the market, and was endorsed by MySpace VP of Technology Michael Cerda and Angel Capital Association founder Bill Payne.
Edwards’s success in business may seem surprising in light of her self-described lack of academic experience in the field. But her past research in cognitive human behavior at the University shares a relationship with her current pursuits.
“In the Honors Program at the University’s Psychology Department, I got to participate in a lot of primary research,” Edwards said in an interview with The Michigan Daily. “Once I grew more comfortable with evaluating the research of others and really digging into the numbers, I knew I was ready to start my own business.”
The strategy Edwards outlines in “Startup” doesn’t rely on “gut feelings” or snap judgments — her goal is to give people all the facts they need to pitch their ideas, find appropriate sources of funding and ultimately save enough money to stay afloat during the critical period of a business’s conception.
“When people don’t have enough information, they naturally shy away from any sort of risk-taking,” Edwards said. “Because I’m a numbers geek, I’m trying to help people navigate these calculations in a very step-by-step way, with solid facts.”
On the flipside, she acknowledges that entrepreneurship is a double-edged sword, and hopes to prevent would-be risk takers from sinking money into a shaky enterprise.
“A lot of new entrepreneurs fall so in love with their ideas that they never bother to do the math and ask themselves the hard question: ‘Can I make enough to live on with this business model?’ ” Edwards said.
In spite of the dire need for concrete information about the odds of a startup’s success or failure, the availability of statistical data to aid entrepreneurs is regrettably inadequate. Edwards’s book helps solve this problem by translating the best research of small business think tanks like the International Council for Small Business (ICSB), the United States Association for Small Business and Entrepreneurship (USASBE) and the studies of university professors into accessible terms that everyone can understand.
Though she includes a wealth of third-party information, Edwards isn’t just piggybacking off others’ work. She started her own business — a consulting firm for other startup companies — in January 2010 and spent eight months building it from the ground up before writing “Startup.” Consequently, the book combines a wealth of personal experiences (including her seven years as a venture capitalist) with a collection of well-organized research that leaves no stone unturned.
“I’m trying to work with professors and educators to get this information incorporated into course material,” Edwards said. “The stuff that’s out there now is only useful if you buy 10 different books and try to extract the few useful tidbits from each of them.”
Among the tips in “Startup” are guidelines for seeking funding from venture capitalists, the average waiting periods for various loans and grants and how, when and where to pitch an idea to potential investors.
“The crusade that I’m on is to let people adapt their strategy,” Edwards said. “Often you might have a panel of judges at your business plan competition and all of them are patting you on the back, telling you what a great pitch you had, but no one’s writing a check.”
“There’s a reason, and it has nothing to do with you,” she added.