Venture Analysis
As a venture, makerspaces are entering the growth phase of the business lifecycle. The world has been introduced to the concept, and many people/organizations are starting to view it as a viable venture. 
However, few makerspaces have existed long enough, opened sufficient branches or experienced the market penetration required to be considered established.
Worldwide, there are less than a thousand makerspaces, with ~40 located in Canada. Many cities in developed countries already have one or two makerspaces, but larger urban areas can support more. In developed countries, where access to resources is low, makerspaces are a means to solve economic problems and encourage education, product development and business development. Few developing nations have makerspaces of any kind, though they provide a means for merchants to make and sell/use products to support their families/communities. This means there is room for a lot of market growth.
Commercial makerspaces have lots of room for product expansion depending on the type of services provided. Beyond supporting education, other revenue generation methods include corporate sponsorships and partnerships, private sponsorships, renting out space, hosting events, and allowing members to sell products or leverage the makerspace network to make money. Successful larger-scale makerspaces can even look at business expansion using company owned models or franchises. In general, the more services, that can be provided, the greater the revenue stream and improved chances for success.
Potential for Success
Like any small business, success depends on a variety of factors such as economy, 
demographics, competition, marketing, community, staff skills, investment etc. Accounting for population, community, marketing strategy, and expanding partnerships, increases the viability of the business.
Makerspace will be successful in a population with a high number of entrepreneurs, artists, tinkerers, scientists, engineers, or manufacturers. Growth should focus on locations consisting of large numbers of young to middle aged adults. In large cities, the average large makerspace, such as Techshop can attract 800-1000 members. Success for small makerspaces will be contingent on a lack of competition, or locations that have makerspaces with long waiting lists. Xylem, a small makerspace in Sommerville marketed directly to 250 people on a waitlist for space at nearby Artist’s Asylum (a major local makerspace).
Makerspaces also stand a greater chance of success if they are able to interact with the larger community. In Calgary, AB the local makerspace partnered with the science centre and held a small summer festival on a major downtown walking street, interacting with tourists and business people. Local makers displayed their products, and invited the people to participate in experiments and mini activities for free.
In other sections, the benefits of corporate partnerships were discussed. Not all partners need to be major companies. Successful makerspaces will look at all the businesses, including small ones within the community, and try to target those with whom a partnership would bring the best benefits, for the type of makerspace. Trading for equipment use, marketing, packages etc, might provide the necessary contacts, membership, equipment required for spaces and keep costs low, especially when starting out. Several small-scale makerspaces have worked with local small businesses with great success. The City of Haverhill is one such example. It worked with a manufacturing comapny to provide circuit boards and testing services and business park to provide space for a competition that would see teams of engineers and business consultants compete to create the best product. Winners would then have more access to space. The city would improve its economy by continuing to build their manufacturing industry at low cost.
There are many benefits and challenges to opening commercial makerspaces. These are described in the following SWOT analysis.
Commercial makerspace and the SWOT analysis
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Strengths |
Weaknesses |
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· Successful models have proven market capacity and desire · Corporate makerspaces can support industry and create jobs, thus being eligible for many government incentives · Many niche markets available, in terms of client focus and in makerspace genre · Job creation: Hire staff to maintain makerspace, but also through enabling local manufacturing are responsible for the growth of many start-ups. · Supporting small business development is seen as socially responsible |
· Commercialization is somewhat against the maker cultural ideal · Commercialization renders the focus on a product, rather than a process, of creation · Organic growth of a maker community is difficult to fit within a business plan · Large start-up costs and monthly expenses can be a deterrent to interested investors |
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Opportunities |
Threats |
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· Treating the consumer as a creator supports the flipped education movement and apprenticeship models to drive trades training and innovation · Broad range of mentor and advocate roles within the commercial makerspace broadens the social net · Proven and lucrative possibilities for corporate and private sponsorship and partnership |
· Volatile market, with well documented instances of failed sites · Non-profit makerspaces are currently much more common, and as the market grows, clients may become more accustomed to the non-profit model |
Discussion: What kind of success do you think a commercial makerspace would have in your community/educational context? What would add or detract from its success?
Discussion Summary: Based on cohort discussion, the following factors should also be considered in a SWOT and venture analysis for commercial makerspaces.
- Commercial makerspaces as educational ventures are a burgeoning trend, but as with any venture, opportunity and risk must be balanced. Entrepreneurs must remain realistic about their abilities and their goals. Entrepreneurs should look for seeds of spaces already developed in order to get an idea about the community, and think outside the box in terms of market niche and differentiation.
- Location and access – While proximity to a large city may not be essential; it may help, and proximity to spheres of higher education may also contribute to the community in terms of providing a broad and consistently changing base of user skill and interest.
- Reinvestment over time – The partnerships and collaborations developed would be an essential component of a makerspace venture’s ongoing success.
Please view the cohort experience in the comments below. If you are accessing this OER after November 3, 2013, you are welcome to further contribute to the discussion.
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Living in a small community (900 people) and being ~3 hours from the nearest major city (Saskatoon, SK – population ~240,000) a makerspace would not have much success in my area.
People have already pooled their resources, tools, and expertise in their areas to create what might be called “micro-makerspaces”. Farmers share swathers and combines, with sometimes 3 farmers working one field while waiting for their own to ripen. Hunters share shop space for hanging wild game.
Makerspaces make great sense in larger urban areas, but would struggle in remote rural areas.
Although, in a small community sometimes there is more of a sense of community, and an increased desire to be a part of it. Rural areas often have a slower pace of life, allowing members time to tinker a little more. In a large center people are often shut in their own homes and lives. City life is busy with little time to be creative. I am sure that even in a small community the ladies are getting together to scrapbook. Isn’t that a form of not for profit makerspace?
I took some electronics courses at http://www.vivomediaarts.com in Vancouver back in the day, and I volunteered there as well; you can exchange your work time for equipment rental. I had never heard of the term “makerspace” before this course. Most artist run centres, community centres and shared studios that I know have a grassroots history where the organization grew out of a spark or a need in the community, even in urban spaces.
You’ve highlighted an important consideration for setting up makerspaces. The quite substantial effort and cost must be weighed closely with the potential benefit of the makerspace. There is a risk that overly enthusiastic innovators may not give this initial analysis the time that is required prior to heading into pre-launch activities.
I love the idea of urbanites and others coming together to work on projects in a collaborative ‘community’ project. Is this the pendulum swinging away from that picture Lois is suggesting of city people being shut away in their own homes and own lives? Sounds positive for mental health as much as anything else.
I do find it surprising that the target audience is 20 and 30-somethings. At that age, with work and childcare responsibilities, I would never have found the time to participate in something such as this. It is only now, that my kids are more independent that I would consider this investment for my time.
A non-makerspace idea that this reminds me if is Community Gardens, where those without gardening space and those with knowledge to share gather to work independently or together to grow food (often in public spaces) for their own use or for donating to the food bank.
I live in a large urban area, Vancouver, where there should be a number of general and specialized maker spaces. I consider this a makerspace for those interested in cycling: http://pedalpower.org/our-community-bikes/
Thanks for the exploration of makerspaces this week! Looking forward to Friday…
Success or defeat would largely depend on differentiation from other offerings in the community as well as keeping the site up to date with technologies that your makers would be interested in. I think that the only way in which this could happen is through having a team of dedicated individuals who are passionate about the maker culture and work together towards profitability. Having the University of Alberta, Grant MacEwan University and the Northern Alberta Institute of Technology (NAIT) located in the same city, and all being located along a major transportation line (LRT), I think that there is a very high probability that a Maker space could have a lot of success. So..I guess what am I waiting for???
Good question. Have you checked to see if Edmonton has any makerspaces already? Calgary has a couple, so I imagine Edmonton would have at least one.
Remember, while we have chosen to look at commercial makerspaces, it might be simpler to partner with an institution and set-up a non-profit model. There might be more avenues for funding that way.
I guess community gardens should qualify as Makerspaces.
The newness of the concept lies in providing heavy duty or expensive manufacturing equipment not normally affordable to a budding entrepreneur.
I love the community garden as an example of a makerspace. This is an example that we didn’t discuss while designing this OER. Thanks for contributing this example.
Diane,
Thank you for the link. I just moved back to Vancouver after being away for a long time. I am happy to see how the cycling infrastructure has grown. I got a bike but have no real mechanical background. I will be taking some classes in this bike makerspace!
Hello Amber,
Bicycle related makerspaces are a trend on the rise – I’ve seen them in small scale (highschool Bike RePsych in Haida Gwaii) to a grand community Bike Church collective in Oakland California, not to mention UBC’s excellent Bike Kitchen in the basement of the Student Union Building. Bicycles can be both a hobby and a practicality, and providing recreation and self-empowerment that is the underlying theme of the DIY culture. I’m glad to hear you’ve found a makerspace for you, and Diane, thank you for suggesting it!
And in reply to the discussion thread, I agree that a makerspace would have a lot more potential for success, of course, in an urban area. When we talk about these specialized examples you need a large group of people to gather enough of a client base. People are busy but if you offer a space for them to expand their passions (like me with the biking) they will find the time!
Hello Amber,
Thank you for the followup comment. Yes, the space is definitely a tricky factor in any potential makerspace. Urban areas can be densely populated, but significantly more expensive; rural areas can be less expensive but of course have the associated access issues, and reclaiming a defunct urban space may provide a balance between access and rent – but then prove problematic for repairs, safety standards, and other issues. In a SWOT analysis, the space chosen can have factors listed in each of the components of the framework, but the balance of risk and reward is the task of all ventures!
Looking at your lifecycle graph, I’m reminded of my economics classes of long, long ago, where all things were determined by the magical intersection of supply and demand. In a way, I guess the lifecycle graph could be a stand-in for the demand graph. During the introduction phase, the demand is low, grows during growth, etc.
The supply graph is not substituted as easily, as time rather than price is the horizontal axis. I would imagine in most cases of innovation, that supply would increase as time passes. As costs continuously decrease and markets mature, more suppliers would enter the market. I see the supply line going against the traditional price/quantity model and rising as you move left to right.
Have I stretched the comparison beyond useful bounds?
So many variables can push the lines and effect the intersection. Size/cost of the venture relative to the demand for the service are obvious factors. Demand can be effected by location, population and economy. I believe that though makers have always existed, widespread public adoption will come with difficult economic times. With strong paycheques, people settle into cycles of work and consumption. Money is often more available than time. In weaker economies, the reverse becomes true; with more time than money. This latter scenario seems more conducive to the maker culture, as people are encouraged to live/fix/work with what they have.
You make a good point. Right now 3D printers and laser cutters are the most popular attractions, and thus draw people into makerspaces. But as time goes by, I can see many households purchasing their own, the same way they buy computer printers today. It might not be until 3D printers come down to a few hundred bucks, but with that and molds, people may be able to make many of their daily necessities. This means that demand for makerspaces might go down, unless they learn to innovate with the times. Not all makerspaces are successful. In the past, Techshop has closed two spaces that I know of. this has to do with supply, demand population and economy. It will be interesting to see what the future holds for these spaces.
I agree with you that with the eventual drop in price for 3D printers, you will likely start seeing them in regular households. The same thing happened when PCs and inkjet and laser printers were first introduced. However, you cannot create the next great revolution with a single 3D printer. It is the sum of the resources (people & tools) found in makerspaces that really “make” a difference.
I think cultural context plays a large role in determining the success of a makerspace. I lived in New Zealand for 8 years and when I first moved there, I remember being struck by what Kiwis call the “number 8 wire” mentality, which boils down to a necessity is the mother of invention approach. Since NZ is geographically isolated, for many years, things either weren’t available or were too expensive. In response, the general population cultivated a do-it-yourself attitude that went alongside a propensity for innovation, long before making stuff became a “thing” in North America. Many people still have a dedicated tinkering shed in their backyard. It’s considered a part of kiwi identity. So to answer the question, the cultural context in which you set up your makerspace in is important. If you have a general population of innovators and makers, you will attract more members. However, population density and housing also play a role. In big cities, many people live in tiny apartments, and they don’t have anywhere to store their drill press. In NZ, lots of people own houses with a big backyard, or even a few acres. They may have the maker mentality, but they don’t have the space issue that big city dwellers do. However, they may not have all the equipment, may seek a more collaborative environment or want to learn a new skill, which would drive them to a commercial makerspace.
Interesting comment. I wonder how strong community sharing and collaboration is in NZ. Do people work together to create necessities or do they just go it alone. Are they willing to share tools or is it a what’s mine is mine mentality. If it’s the latter to both questions, then culture might work against the creation of makerspaces. What do you think? Do you know of any makerspaces in NZ?
I think a commercial makerspace could be successful in Victoria. We have a growing tech community and post secondary institutions that would make excellent partners for such an opportunity. These factors also provide a growing base of individuals with the interest and training necessary to make meaningful contributions to such a community. If over time, the makerspace is able to show that it is willing to re-invest in other materials and technology needed to create an increasingly diverse range of projects, people will continue to support the venture over a sustained period of time as well.
I live in a rural community approximately 2 hours from Edmonton. As this is a college town with apprentices, there is a large area that is available and used by individuals in the area to create things that are put up for sale. As well we have some crafts such as rug making and many other crafts. I have seen a community garden developed beside the college be used to grow produce for personal use.
Sounds like your area has a couple of makerspaces, though they are not officially designated as such.
Being in a rural community, I don’t think commercial Makerspaces would be viable here. However, there may be an opportunity for non-profit or school-based spaces to thrive. People here have a strong DIY mindset. This is both a strength and a weakness because while they are creative and willing to take on challenges, they usually do it as individuals (or like-minded groups). In order for Makerspaces to succeed, people would need to recognize the value of collaborating with others who have very different skill sets. This will take time and will require a few ‘pioneers’ to collaborate on some unique projects – possibly integrating technology into some of the more traditional pass times (art work, quilting, wood/metal work, automotive work, hunting, fishing).
I am having a hard time differentiating between a commercial makerspace and any other venture/ company. I am aware it provides a different type of business but this is the same for all companies: a fast food company is different from a software company. However there are general rules/ principles that govern success in the business field in general with few exceptions/ additions in every sector. So if my understanding is correct, commercial makerspaces can make use of the business literature and the same success factors that other companies depend on will be useful for makerspaces. There will be some tweaks here and there to adjust to nature of the business: involving makers, having tools, training members and nonmembers on using tools etc… but the main principles would be the same. Please correct me if I am missing anything.
You’ve established a point that we have been indirectly trying to make. Commercial makerspaces ARE just like any other business which before setting up requires a plan. Our focus here has been an attempt to bring to light all the specific tweaks you mentioned that would need to be considered for a makerspace, not just a generic small business. But yes, you are right you haven’t missed anything.
Question: Is a conference room a Makerspace or does it have to provide equipment not readily available to qualify?
The term Makesrpace, as I understand it, originated as a way to make the production of an idea possible that would otherwise remain theoretical. In other words it provides an authentic context for production. This would, I believe, disqualify the conference room since no practical application is being prototyped.
A conference room, offers opportunity for interaction and exploration by sharing ideas to find solutions, but remains theoretical and contrary to my previous belief, so does the Blog.
The second, with a provision of equipment that is not readily available, allows physical prototyping that would otherwise be difficult, and supports the practical require what most closely resembles the intent of a Makerspace that provides access to expertise and equipment.
What are examples relevant to the testing out ideas in the delivery of education? As yet I see two scenarios. 1.) The production of educational content and 2.) the introduction of a content delivery model in education.
The second would require a target student population as input and would have the teacher/instructor input as managers of content delivery. Chosen teacher and student input can, however, be dispersed over the internet. There is not necessarily a need to have a physical space allocated. The key to whether this is a Makerspace is whether it actively prototypes the practical application of solutions with shared input opportunities. I believe this is a productive model for prototyping in education and should qualify as a Makerspace when implemented for the purpose of pracical protyping.
With the above considerations in mind blogs , libraries, war-rooms produce, conference calls are theoretical solutions which may produce practical applications when implemented, but the theory itself is not an implementation. It is not prototyping a solution and should not qualify as a Makerspace in its original intent.
Hello David,
Excellent questions. Early in the production of this OER, our team had long discussions about the points you have brought up for consideration. Terri, our resident War Rooms specialist, came up with the compelling arguments about why War Rooms should be considered as contributing to a new concept of digital/virtual makerspace, and how this could definitely be a key player in terms of commercial or corporate makerspaces.
Although the term “makerspace” may have crystallized around an “original intent,” as you’ve put it, we’ve found the concept need not be so constricted, and this has been exemplified through the week as our colleagues have found such excellent examples of site in their communities, discussed theoretical applications, and have dreamt up possible spaces of their own. As a team, and as a group, the in-practice examples of the War Room style of space as producing real, actual solutions has been illustrated; and we feel that this contributes to the academic value of our OER as it ties the different concepts together.
Thank you for bringing up your important points – believe me, it was heavily debated at length by our team, and was an area ripe for much debate! As I mentioned, Terri is our resident expert on the subject, but I hope that Naomi and I have done your questions justice.
Nicola
Oops…! I lost a paragraph in the above. I did not elaborate on the production of educational content. The production of educational content most resembles a traditional production facility where a shared space with access to shared expertise could be very beneficial and qualify as a Makerspace as per original concept.
Also paragraph 4 is disjointed an should read: “…which most closely resembles….
You are on track with your analysis. libraries and war rooms are now becoming centers for production, so that does qualify them for a type of makerspace - if the tools are provided for the physical production. conference rooms and blogs which are centers for discussion do not qualify necessarily as makerspaces because of the lack of production element. That being said, there are now several virtual makerspaces starting up which allow for creation of knowledge and sharing of resources. One is knowable.org The other is a blended makerspace online and off interestingly enough is for teachers to share the development of resources, or the development of content, just like you discuss. The link is here www.raftbayarea.orgIn my experience, kiwi makers are very open and encouraging: people are almost always willing to share their knowledge, tools and skills, and will often go out of their way to do so. There are really strong maker communities as well, some happening informally through social networks, some happening formally through post-secondary design/apprenticeship programs and some forming around makerspaces like these: http://www.makers.org.nz/wellington-maker-space/.
I think the maker movement is alive and well down there!