4 ms·

Between this and the tech shop bankruptcy, is there a broader issue with financial viability in the maker industry?

by ummonk 7y ago

NikolaeVarius 7y ago
Shit doesn't make money.
- therealgranton 7y ago
  Correct. Maker spaces are the loss leader for the services provided. They survive on donations and class costs. Really sad to see, but not unbelievably so.
bkraz 7y ago
The early issues of Make Magazine were filled with articles about repairing devices, building needed things instead of buying them, cobbling stuff together from scrap. It had a very distinct anti-consumerist vibe, which made it appealing to a lot folks including myself. The Faires were filled with like-minded folks who were there only to enjoy the process of building stuff. What do you sell this group of customers? In my mind, inspiration and a venue to share their projects with each other. Over time, though the maker movement became more focused on commerce, including tools that people needed to buy to become makers, and also startups founded by makers with the goal of selling stuff to the public. I'm surprised that I'm being critical on this point, since I really like business, and was a small business owner myself for years. What I'm trying to say is that Make lost sight of their original target customer profile (maybe due to pressure from investors), which is not an uncommon mistake. Smaller venues will crop up to support folks who like building things, which is a relatively niche group, and there may not be enough of us to support a the size business that the investors desired.
- ineedasername 7y ago
  This. It was at that inflection point that I cancelled my Make subscription. It just didn't have the vibe any more. I also remember them developing their own fairly expensive custom ARM development board during the time the arduidnos were rapidly proliferating, and thinking, "why do they think people will buy this?" So maybe there were some sub par investments on that front as well?
  - numpad0 7y ago
    > why do they think people will buy this? Extra salt to wound: and what kind of profit/revenue/result is it going to generate other than the fact that it consumes power? The more I look back at the maker movement, the more it looks a structurally self extinguishing fire.
mdorazio 7y ago
I ran a maker space for a while. It consistently lost money, as do most of the ones whose owners I've talked to. The only ones that don't "lose" money are generally supported by donations and a core group of owners who are each putting several hundred a month in to keep the lights on (i.e. from an accounting perspective they're still losing money). In addition, there's an interesting phenomenon in the maker community that a lot of people think IP (models, designs, plans, etc.) should pretty much be given away for free, which limits revenue opportunities. [Edit to add info in case anyone comes across this in the future]: The #1 issue is actually rent in a lot of cases. There's a conundrum where the people who most want to use a maker space are the same people who want a maker space in a place with high rent (i.e. in a desirable urban area). On the flip side, people who have their own garage / shed / yard are generally much less in need of a maker space (which would be in a cheaper area to serve them) since entry-level prices for most tools have gotten pretty cheap in recent years. Next is labor cost. If you're not paying yourself a decent salary for your time, you're basically cheating yourself into thinking your maker space isn't losing money. Realistic labor cost should run you at least double prevailing minimum wage in the area for the hours you're open, probably more if you're counting on people to help students with things like CNC machining. Next up is tools & repairs cost. You can actually get decent tools going for less than you would think if you don't splurge for name brand everything (especially printers, CNC mills, laser cutters, etc.), but if you're open to the public, the public is going to break your stuff. A lot. And you're going to have to fix it or pay someone to fix it. A lot. Then there's all the ancillary stuff like electricity (likely to cost more than you think), insurance, accounting, payment processing, marketing, etc. etc. Basically, if you want your maker space to make money like a business you have to treat it like a business and that means a lot of overhead. In short, I don't recommend anyone start a maker space with delusions that it will make money. It probably won't. Only start a maker space if you and a bunch of your friends are all willing to pitch in every month to have a cool place to hang out and work on stuff.
- tagami 7y ago
  I think one should investigate partnering with their local library. Rent is a big hurdle, and if set up properly, totally win-win.
- 7y ago
jerkstate 7y ago
There definitely is, but successful makerspaces that I know of are co-ops. Tech Shop and Maker Faire were great, but my guess is they were “too corporate” to maintain a dedicated volunteer work force, and without volunteers, it’s probably too niche and too low-margin to be a sustainable business.
Animats 7y ago
On the SF peninsula, yes. The TechShop bankruptcy, which was totally botched, left many people angry. (I was a member, but didn't prepay, so I didn't lose anything.) TheShop.build closed their San Francisco location recently, and at one point had an eviction notice on the door of their San Jose location. (I dropped my membership last month.) Maker Nexus in Sunnyvale is struggling to get enough members to survive. Today's email says they have 80 and need 200. (I pay for a membership there.) Other cities are doing better. Usually because of government support. "We need to retrain workers" arguments play well in industrial cities. The original Menlo Park TechShop had skilled people doing hard stuff. People making things for the X-prize. People from Stanford who needed more machine tools than Stanford had. People from startups. Gradually that declined. Stanford and Google got their own in-house shops. Then there was the "Etsy crap" era - people using CNC laser cutters to make "hand made" stuff to sell on Etsy. At peak, TechShop SF had eight laser cutters going almost constantly. That died when Etsy removed the requirement that you make it yourself. Today, maker spaces seem to be mostly learning centers for teenagers. The "STEM" or "STEAM" thing. That's fine, but it's a branch of the college prep industry.
- sdan 7y ago
  Where are Maker spaces in the bay? Only one I remotely know of that still exists is Hackerdojo.
  - cobbzilla 7y ago
    Noisebridge is in SF https://www.noisebridge.net/ https://www.noisebridge.net/ Farther out but an awesome space and a bit less intimidating is Hacker Lab in Sacramento https://hackerlab.org/ https://hackerlab.org/
    - NileTheGreat 7y ago
      Disclaimer: CTO of Hacker Lab but speaking for myself here: We've had more than a few Tech Shop refugees over the past few months/years. Noisebridge is great, and both of our spaces definitely have unique feels and great communities built around them. I wandered into the space some 5 years ago and what stood out to me echos what above commenters have said - there is a definite air of don't-buy-what-you-can-build or repair within the maker sphere that spoke to me. While there are plenty of edu institutions and private industry shops out there that have all the equipment we do and more, the community here of folks from different experience levels, background, etc. really makes makerspaces unique. When Hacker Lab showed up there were only a small handful of coworking spaces in the area. 7 years later, I can't throw a stick without hitting one. I feel part of our survival has been going for breadth - coworking, hackathons, and makeing can all benefit from eachother. That said, I'm as anxious and unknowing to see where this maker thing goes as the next person.
cptskippy 7y ago
Maker Faire's business model was print media and events, two notably unprofitable models. Techshop was a for profit chain model trying to compete with volunteer diy maker spaces. Contrast that with maker focused businesses like Sparkfun and Adafruit.
- sdan 7y ago
  If Sparkfun or Adafruit decided to take over Maker Media's operations (print media and events) that would be so great.
beambot 7y ago
Tech shop as a public resource could probably be better as a municipal, library-like entity. Any attempts at this model working?
- URSpider94 7y ago
  Look around at your local public library. Most of them are barely hanging on, except for the ones that haven’t made it. I don’t see cities investing the hundreds of thousands of dollars it would take to build out a maker space, not to mention the money to staff it, run the training courses, maintain the equipment and pay for the insurance.
  - applecrazy 7y ago
    I know of a local library who's actually going through with this. They have a grant and tons of dedicated volunteers to design curriculum and plan out the space. I hope to see that project succeed.
- _delirium 7y ago
  Some public libraries are starting to build makerspaces. Not ones the size of TechShop, but tons of libraries now have at least a 3d printer, and better-equipped ones have some subset of laser cutters, vinyl cutters, sewing machines, embroidery machines, CNC machines, etc., along with classes. A few examples: https://library.pflugervilletx.gov/services/pfab-lab https://library.pflugervilletx.gov/services/pfab-lab, https://www.chipublib.org/maker-lab/ https://www.chipublib.org/maker-lab/, https://ignite.hepl.lib.in.us/ https://ignite.hepl.lib.in.us/, https://www.jocolibrary.org/makerspace https://www.jocolibrary.org/makerspace
- prepend 7y ago
  I think hackerspaces are a good fit for public libraries. There’s a need for productive space since books don’t need as much space as they once did, nor do computer workstations. It would be cool to set up some of the space for making stuff.
- kejaed 7y ago
  Ottawa has the Imagine Space at one of its branches. Quite popular and some great tools and resources. I’ve also considered starting a community makerspace in the west end of town, a coop or some sort of publicly funded model. This comment section is a good reminder that we had better have a solid operations plan in place for it to be a success. https://biblioottawalibrary.ca/en/imagine-space-0 https://biblioottawalibrary.ca/en/imagine-space-0

Between this and the tech shop bankruptcy, is there a broader issue with financial viability in the maker industry?

by ummonk 7y ago

Between this and the tech shop bankruptcy, is there a broader issue with financial viability in the maker industry?

NikolaeVarius 7y ago

Shit doesn't make money.

therealgranton 7y ago
Correct. Maker spaces are the loss leader for the services provided. They survive on donations and class costs. Really sad to see, but not unbelievably so.

bkraz 7y ago

The early issues of Make Magazine were filled with articles about repairing devices, building needed things instead of buying them, cobbling stuff together from scrap. It had a very distinct anti-consumerist vibe, which made it appealing to a lot folks including myself. The Faires were filled with like-minded folks who were there only to enjoy the process of building stuff. What do you sell this group of customers? In my mind, inspiration and a venue to share their projects with each other. Over time, though the maker movement became more focused on commerce, including tools that people needed to buy to become makers, and also startups founded by makers with the goal of selling stuff to the public. I'm surprised that I'm being critical on this point, since I really like business, and was a small business owner myself for years. What I'm trying to say is that Make lost sight of their original target customer profile (maybe due to pressure from investors), which is not an uncommon mistake. Smaller venues will crop up to support folks who like building things, which is a relatively niche group, and there may not be enough of us to support a the size business that the investors desired.

ineedasername 7y ago
This. It was at that inflection point that I cancelled my Make subscription. It just didn't have the vibe any more. I also remember them developing their own fairly expensive custom ARM development board during the time the arduidnos were rapidly proliferating, and thinking, "why do they think people will buy this?" So maybe there were some sub par investments on that front as well?
- numpad0 7y ago
  > why do they think people will buy this? Extra salt to wound: and what kind of profit/revenue/result is it going to generate other than the fact that it consumes power? The more I look back at the maker movement, the more it looks a structurally self extinguishing fire.

mdorazio 7y ago

I ran a maker space for a while. It consistently lost money, as do most of the ones whose owners I've talked to. The only ones that don't "lose" money are generally supported by donations and a core group of owners who are each putting several hundred a month in to keep the lights on (i.e. from an accounting perspective they're still losing money). In addition, there's an interesting phenomenon in the maker community that a lot of people think IP (models, designs, plans, etc.) should pretty much be given away for free, which limits revenue opportunities. [Edit to add info in case anyone comes across this in the future]: The #1 issue is actually rent in a lot of cases. There's a conundrum where the people who most want to use a maker space are the same people who want a maker space in a place with high rent (i.e. in a desirable urban area). On the flip side, people who have their own garage / shed / yard are generally much less in need of a maker space (which would be in a cheaper area to serve them) since entry-level prices for most tools have gotten pretty cheap in recent years. Next is labor cost. If you're not paying yourself a decent salary for your time, you're basically cheating yourself into thinking your maker space isn't losing money. Realistic labor cost should run you at least double prevailing minimum wage in the area for the hours you're open, probably more if you're counting on people to help students with things like CNC machining. Next up is tools & repairs cost. You can actually get decent tools going for less than you would think if you don't splurge for name brand everything (especially printers, CNC mills, laser cutters, etc.), but if you're open to the public, the public is going to break your stuff. A lot. And you're going to have to fix it or pay someone to fix it. A lot. Then there's all the ancillary stuff like electricity (likely to cost more than you think), insurance, accounting, payment processing, marketing, etc. etc. Basically, if you want your maker space to make money like a business you have to treat it like a business and that means a lot of overhead. In short, I don't recommend anyone start a maker space with delusions that it will make money. It probably won't. Only start a maker space if you and a bunch of your friends are all willing to pitch in every month to have a cool place to hang out and work on stuff.

tagami 7y ago
I think one should investigate partnering with their local library. Rent is a big hurdle, and if set up properly, totally win-win.
7y ago

jerkstate 7y ago

There definitely is, but successful makerspaces that I know of are co-ops. Tech Shop and Maker Faire were great, but my guess is they were “too corporate” to maintain a dedicated volunteer work force, and without volunteers, it’s probably too niche and too low-margin to be a sustainable business.

Animats 7y ago

On the SF peninsula, yes. The TechShop bankruptcy, which was totally botched, left many people angry. (I was a member, but didn't prepay, so I didn't lose anything.) TheShop.build closed their San Francisco location recently, and at one point had an eviction notice on the door of their San Jose location. (I dropped my membership last month.) Maker Nexus in Sunnyvale is struggling to get enough members to survive. Today's email says they have 80 and need 200. (I pay for a membership there.) Other cities are doing better. Usually because of government support. "We need to retrain workers" arguments play well in industrial cities. The original Menlo Park TechShop had skilled people doing hard stuff. People making things for the X-prize. People from Stanford who needed more machine tools than Stanford had. People from startups. Gradually that declined. Stanford and Google got their own in-house shops. Then there was the "Etsy crap" era - people using CNC laser cutters to make "hand made" stuff to sell on Etsy. At peak, TechShop SF had eight laser cutters going almost constantly. That died when Etsy removed the requirement that you make it yourself. Today, maker spaces seem to be mostly learning centers for teenagers. The "STEM" or "STEAM" thing. That's fine, but it's a branch of the college prep industry.

sdan 7y ago
Where are Maker spaces in the bay? Only one I remotely know of that still exists is Hackerdojo.
- cobbzilla 7y ago
  Noisebridge is in SF https://www.noisebridge.net/ https://www.noisebridge.net/ Farther out but an awesome space and a bit less intimidating is Hacker Lab in Sacramento https://hackerlab.org/ https://hackerlab.org/
  - NileTheGreat 7y ago
    Disclaimer: CTO of Hacker Lab but speaking for myself here: We've had more than a few Tech Shop refugees over the past few months/years. Noisebridge is great, and both of our spaces definitely have unique feels and great communities built around them. I wandered into the space some 5 years ago and what stood out to me echos what above commenters have said - there is a definite air of don't-buy-what-you-can-build or repair within the maker sphere that spoke to me. While there are plenty of edu institutions and private industry shops out there that have all the equipment we do and more, the community here of folks from different experience levels, background, etc. really makes makerspaces unique. When Hacker Lab showed up there were only a small handful of coworking spaces in the area. 7 years later, I can't throw a stick without hitting one. I feel part of our survival has been going for breadth - coworking, hackathons, and makeing can all benefit from eachother. That said, I'm as anxious and unknowing to see where this maker thing goes as the next person.

cptskippy 7y ago

Maker Faire's business model was print media and events, two notably unprofitable models. Techshop was a for profit chain model trying to compete with volunteer diy maker spaces. Contrast that with maker focused businesses like Sparkfun and Adafruit.

sdan 7y ago
If Sparkfun or Adafruit decided to take over Maker Media's operations (print media and events) that would be so great.

beambot 7y ago

Tech shop as a public resource could probably be better as a municipal, library-like entity. Any attempts at this model working?

URSpider94 7y ago
Look around at your local public library. Most of them are barely hanging on, except for the ones that haven’t made it. I don’t see cities investing the hundreds of thousands of dollars it would take to build out a maker space, not to mention the money to staff it, run the training courses, maintain the equipment and pay for the insurance.
- applecrazy 7y ago
  I know of a local library who's actually going through with this. They have a grant and tons of dedicated volunteers to design curriculum and plan out the space. I hope to see that project succeed.
_delirium 7y ago
Some public libraries are starting to build makerspaces. Not ones the size of TechShop, but tons of libraries now have at least a 3d printer, and better-equipped ones have some subset of laser cutters, vinyl cutters, sewing machines, embroidery machines, CNC machines, etc., along with classes. A few examples: https://library.pflugervilletx.gov/services/pfab-lab https://library.pflugervilletx.gov/services/pfab-lab, https://www.chipublib.org/maker-lab/ https://www.chipublib.org/maker-lab/, https://ignite.hepl.lib.in.us/ https://ignite.hepl.lib.in.us/, https://www.jocolibrary.org/makerspace https://www.jocolibrary.org/makerspace
prepend 7y ago
I think hackerspaces are a good fit for public libraries. There’s a need for productive space since books don’t need as much space as they once did, nor do computer workstations. It would be cool to set up some of the space for making stuff.
kejaed 7y ago
Ottawa has the Imagine Space at one of its branches. Quite popular and some great tools and resources. I’ve also considered starting a community makerspace in the west end of town, a coop or some sort of publicly funded model. This comment section is a good reminder that we had better have a solid operations plan in place for it to be a success. https://biblioottawalibrary.ca/en/imagine-space-0 https://biblioottawalibrary.ca/en/imagine-space-0