In this section, we would like everyone to find a sample of a successful makerspace. To get started, we would like to share the story of one of the most successful, commercial makerspaces – TechShop.
TechShop’s Story
TechShop started in 2006 by Jim Newton, because he wanted a world-class workspace to work on his inventions. In order to rent the space and equip it with the necessary tools, Newton sought loan commitments from individuals, asking for $25, 000 each. He soon discovered that many people were interested in such a space and before long had the $350,000 required to get started in Menlo Park, California. The initial business model relied on people buying monthly memberships, renting workshop space and taking classes offered in the space.
Interest in the model soon spread, and TechShop began expanding to other cities. To start in each city, a minimum number of investors providing a $25, 000 loan each is required. On average it can take 2.5-3 million dollars to get each site fully funded and equipped. TechShop’s model is similar to a retailer.
Membership packages are similar to fitness centers and several levels of membership are available, including monthly rates, yearly rates, family rates and lifetime membership packages. Courses and workshop rental space may also be bundled with membership packages. There are about 100-200 classes per month, with 5/6 people in each class. Each facility can handle around 50 members at a time, and the cap is normally around 500 members, to avoid overcrowding. Hours of operation are generally 9am -midnight.
Each TechShop is divided into sections. Some areas are cornered off for dangerous, bulky equipment such as laser cutters, milling equipment etc. There are areas for tasks that are noisy such as sand -blasting and sanding, and craft areas for objects like high end embroidery equipment and 3D printers. There are also private workshops, studios and areas rented out to small businesses. Many people often end up hanging out in the common areas. There is also free coffee and popcorn, to make sure everyone gets something to eat.
Initially, participants were 85% university/college educated males. More recent numbers indicate more female involvement at around 35%. Members range in age from children up to people in their 80s. Demographics are typically flat – 20s, 30s, 40s and 50s across the board. Artists, entrepreneurs and tinkerers are often the target market – or as Mark Hatch puts it “anyone who likes to make things.”
In the last several years TechShop’s business model has changed. Mark Hatch came on board in 2007 as CEO, and within a couple of years tripled the revenue and made TechShop a major brand in the commercial makerspace industry. One major change in the business model is the pursuit of corporate sponsors to build new locations and fund spaces. One report had TechShop’s revenue split as 80% corporate sponsorship and 20% membership fees. Partnerships with corporate sponsors such as Intel, Ford and the US Department of Defense, has helped open up more locations. With Ford in Detroit, Hatch started this new model. Ford guarantees a certain number of members and ensures that TechShop will minimally break even for a few years.
Often members and staff from corporate sponsors share the space. In Washington – in the case of the US department of Defense, members use the space during regular hours, but at night the Defense Advanced Research Projects Agency uses the facility to work on projects. Another reason behind the partnership is that DARPA wants to see if regular citizens can out invent military contractors. They also have a deal to train 1000 veterans in the next few years to run and own their own makerspaces. All in all, it looks like a win-win solution for Tech Shops.
Also as a part of its business model TechShop offers Series B Preferred stock for sale to accredited investors.
TechShop currently has 9 locations in the U.S. It is currently looking to expand to dozens of locations and is seeking $60 million of funding to do so.
Success Stories
TechShop has been very successful in helping small startups get started and promoting entrepreneurial spirit. Perhaps you’ve heard of the Dodocase for ipad. Its creator, Patrick Buckley used TechShop facilites to learn how to design and create this ipad case. In his first year, he sold $4 million dollars worth of cases.
This is not a unique success story. Many successful products have been created and fabricated at TechShop facilities. A Super Mario Bros. sounding lamp, portable credit card reader, infant warmer etc. have all started at TechShop locations. From there many products and start-up businesses get funding from Kickstarter and other investors. The list is just too long to go into in depth. TechShop helps these businesses get their start by greatly cutting down on the cost of manufacturing and product development – as they have access to machines that they would otherwise have to purchase and could not afford. Makerspaces like TechShop, have started a new manufacturing and inventing revolution.
For more information, check out the TechShop website or if you have the time, feel free to check out this long (1 hr.) YouTube video.
Now that you’ve seen a successful model of a makerspace, it’s time to engage in our next activity.
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