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At the Redwood city location there were many artists and small businesses that depended on the facilities. It will be a big blow to them. I think they got reck

At the Redwood city location there were many artists and small businesses that depended on the facilities. It will be a big blow to them. I think they got reckless with their expansion. The San Jose location moved to a new location after their lease expired. They chose to relocate to a prime location in downtown San Jose and ended up with a million dollar shortfall to renovate and open the new location. They somehow managed to scrounge the money through an appeal to the community and opened but it must have ruined their financials. At the same time they were opening in other cities. If their financials in the Bay area were shaky (as they admit in their closing statement on their website) then it is not clear why they were taking on more risk by expanding.

_JamesA_ 9y ago
The Austin location [1] was close to Dell's Round Rock campus but it seems most of the maker activities I hear about are in Central or South Austin 15+ miles away. [1]: https://goo.gl/maps/39QQvxgc3f32 https://goo.gl/maps/39QQvxgc3f32
URSpider94 9y ago
They had no choice but to expand. They had a fairly large corporate office, which needed income from a lot of sites to cover the overhead. I was thinking about investing and got a good look at the financials - only the three Bay Area shops were profitable. Bottom line, they overestimated how many makers out there are willing to pay $150 per month to support their laser cutter habit.
- Animats 9y ago
  The three Bay Area shops were all profitable? Then someone may buy at least one of them.
  - icantdrive55 9y ago
    Usually the Bankruptcy Refree hires really shady resellers. Those machines will be pieced out--down to the coffee maker. Tip to those buying; find the guy in the back, barking orders at temp liquidators, with a hint of a Martinni on his breath, and quietly ask him about deals. Make sure he knows you have cash. I have always found bankruptcy sales depressing.
  - URSpider94 9y ago
    I have a fantasy that someone like Google or Facebook, or even a wealthy angel, might be willing to buy all three. If you got them out from under their debt obligations and removed the need to support a corporate HQ, I think it would be do-able. @dang - YC should buy them!!!
- viewtransform 9y ago
  Could you reveal whether the Bay Area shops were borderline profitable or operating with decent margins ? I was surprised that they managed to stay open for more than a decade and assumed that they had figured out a decent sustainable business model.
  - URSpider94 9y ago
    It's been a little while, my recollection is that they were narrowly cash-flow profitable, but I don't recall at this point whether that included debt service, and this is before they took on a ton of debt to relocate the San Jose facility. I'm pretty sure if they can get rid of all of their debt, they would make a little bit of cash. But not enough to justify their billing as a start-up. The other looming issue is that a lot of the equipment at the Bay Area sites is, er, well-loved, and will need to be replaced over the next few years, which is a major capital expense. At the Redwood City shop, the laser cutters are all getting pretty run-down.
  - bagels 9y ago
    San Francisco and Mid-Peninsula were break even (as of 2015). The rest, including San Jose were hemorrhaging money.
    - cr0sh 9y ago
      I'm kinda surprised to think that about the "Phoenix" (Chandler) location; they were essentially "given" the building they used by the city; it was also a shared space with some portion of ASU (IIRC). I wonder what will happen with that ASU program (I think it was part of the engineering school)? I wonder if they will simply take over the space and continue using it (though probably closed to the public)?

_JamesA_ 9y ago

The Austin location [1] was close to Dell's Round Rock campus but it seems most of the maker activities I hear about are in Central or South Austin 15+ miles away. [1]: https://goo.gl/maps/39QQvxgc3f32 https://goo.gl/maps/39QQvxgc3f32

URSpider94 9y ago

They had no choice but to expand. They had a fairly large corporate office, which needed income from a lot of sites to cover the overhead. I was thinking about investing and got a good look at the financials - only the three Bay Area shops were profitable. Bottom line, they overestimated how many makers out there are willing to pay $150 per month to support their laser cutter habit.

Animats 9y ago
The three Bay Area shops were all profitable? Then someone may buy at least one of them.
- icantdrive55 9y ago
  Usually the Bankruptcy Refree hires really shady resellers. Those machines will be pieced out--down to the coffee maker. Tip to those buying; find the guy in the back, barking orders at temp liquidators, with a hint of a Martinni on his breath, and quietly ask him about deals. Make sure he knows you have cash. I have always found bankruptcy sales depressing.
- URSpider94 9y ago
  I have a fantasy that someone like Google or Facebook, or even a wealthy angel, might be willing to buy all three. If you got them out from under their debt obligations and removed the need to support a corporate HQ, I think it would be do-able. @dang - YC should buy them!!!
viewtransform 9y ago
Could you reveal whether the Bay Area shops were borderline profitable or operating with decent margins ? I was surprised that they managed to stay open for more than a decade and assumed that they had figured out a decent sustainable business model.
- URSpider94 9y ago
  It's been a little while, my recollection is that they were narrowly cash-flow profitable, but I don't recall at this point whether that included debt service, and this is before they took on a ton of debt to relocate the San Jose facility. I'm pretty sure if they can get rid of all of their debt, they would make a little bit of cash. But not enough to justify their billing as a start-up. The other looming issue is that a lot of the equipment at the Bay Area sites is, er, well-loved, and will need to be replaced over the next few years, which is a major capital expense. At the Redwood City shop, the laser cutters are all getting pretty run-down.
- bagels 9y ago
  San Francisco and Mid-Peninsula were break even (as of 2015). The rest, including San Jose were hemorrhaging money.
  - cr0sh 9y ago
    I'm kinda surprised to think that about the "Phoenix" (Chandler) location; they were essentially "given" the building they used by the city; it was also a shared space with some portion of ASU (IIRC). I wonder what will happen with that ASU program (I think it was part of the engineering school)? I wonder if they will simply take over the space and continue using it (though probably closed to the public)?