Abigail Edgecliffe-Johnson wants to make closing your startup easier: NPR

Do you want to start a startup? There is a book for that – or a few hundred.

Not to mention articles, videos, podcasts and even infographics: every step of the process of launching a new business has been documented, from creating a prototype to growing customer base.

Determine what to do if your startup does not take off? That's another challenge, says Abigail Edgecliffe-Johnson.

"Start-ups are about failure, reinventing themselves and starting over," she says. But when you are failing, she says, "It 's as if you were a leper. Nobody wants to approach you because they think that' s the only thing you 're going to do. failure is contagious. "

Edgecliffe-Johnson is the founder of The closure, an open source project trying to build a road map for people who need to stop their startup. It's a project that she says she has undertaken because she might need it herself someday.

When she decided to start her 2014 Race Ya toy business, she wanted to help kids get to grips with science and engineering with customizable racing cars. She built, tested and rebuilt the product, but she had to face high costs to produce the plastic and partly electronic cars. Then, last year, his Kickstarter fundraising campaign stopped midway through his $ 75,000 goal.

"We realized that we would not reach our goal, which is upsetting, embarrassing and painful," she says. "But it was also a very clear signal: OK, you've tried every means to do that … and it will not happen as you thought."

So she started looking for resources that could help her shut the doors of her business, if that boiled down to that. The advice she found was scattered and incomplete, she said. "If you plan to close your business, you suddenly find yourself completely isolated."

His problem is relatively common. Hundreds of thousands of new businesses start each year, according to the Bureau of Labor Statistics. According to Harvard Business School, between 30% and 40% of all startups fail, which means the company is liquidating all its assets and investors are losing most or all of their investments. The numbers go up to 80% if you measure a failure based on the fact that the startup reaches its expected return on investment.

Such failure has been part of the American discourse on entrepreneurship and reinvention for generations, often seen as a necessary obstacle to success. Think of Henry Ford's failed plans before the construction of the Model T, or the early Milton Hershey candy companies that failed.

But Edgecliffe-Johnson says that the story of redemption does not help a person like herself to handle the details needed to unravel the threads of a small business.

"Many people have closed their businesses and talked about doing so, but they usually only talk about it from the other side," Edgecliffe-Johnson said. What's missing is the story of How this failure takes place in every detail.

Some of the things you might have to do if you shut down a start-up: warn investors, dismiss employees, calculate severance pay, find a lawyer to settle the paperwork related to dissolution, pay off debts suspense, cancel credit cards and close social media accounts. According to Edgecliffe-Johnson, you also need to determine how to value your company's assets, which can be tricky when it's not computers and pens, but data, customers, brands, and other intangible assets. .

Edgecliffe-Johnson's online poll for The Shut Down asks people who have followed the process to share some of these details, ranging from the question of whether they declared bankruptcy to what they would have liked to know. She wants the contractors to give up "what forms to file in New York against Delaware, the way you sold the company's assets."

Its goal is to create a unique, open source resource that guides everyone who needs to stop their startup with a customizable checklist.

"What I find is that everyone has the same problem," she says. "So we're hoping The Shut Down will be a little bit of a speed booster as a complement to all startup accelerators."

She says the answer has been impressive so far and that the project seems cathartic. And she says that a little control could be useful, not only for her or other entrepreneurs, but also for the economy in general.

"If we can make this process less painful for people, they will feel better about going ahead and building more products," she says. "We want entrepreneurs, we want people who build businesses, we do not want them to be crushed by their first failure."

There could even be a podcast in the works, she jokes. do not How did I build that?but How did I break that.

This article was produced and edited for radio by Ian Stewart, Francesca Paris and Evie Stone.