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TechShop closing reverberates in maker space

November 30, 2017
By: Ellen Marrison

When TechShop unexpectedly closed its 10 locations around the country on Nov. 15, announcing its intention to file for Chapter 7 bankruptcy, it not only surprised many who were affiliated with the maker space, but raised questions surrounding the larger maker space community. Dan Woods, CEO of TechShop, cited financial reasons for the closing. They had earlier announced the closing of the Pittsburgh shop, but had opened a new shop in Brooklyn, New York, just weeks before the sudden closure. While the future of those facilities is still undetermined, those in the maker space community say the demand for maker spaces has not diminished and they continue to evolve.

Student impact

Ji Mi Choi, the associate vice president of Knowledge Enterprise Development at Arizona State University overseeing their TechShop partnership, said she was surprised and disappointed when she received the email announcing TechShop’s closing — effective in half an hour — noting that the university had been talking with TechShop about future plans before receiving notice that they were closing all their U.S. facilities.

ASU had 550 students with active memberships at TechShop and Choi said it was her understanding that there were many hundreds more memberships held by people in the community. The sudden notice left the students who had two more weeks remaining in the semester with class projects that had to be accommodated in other facilities available at the university, but those facilities are not open for use by the general public.

Although a final resolution remains unclear, Choi says the university is “exploring all options that allow us to serve students and the community, but right now we don’t know what that looks like.”

TechShop’s space served students as they developed course projects as well as prototyped new products beyond class work. The space was open for use by the larger community who could work on their own businesses, tinker, develop new products, train employees on different equipment and collaborate with other companies all in the same space and alongside the student population. Choi says she still supports the idea of a maker space, but is unsure of next steps for the university and that space.

But questions remain from a partnership that was entered in good faith and has left the university questioning the company’s operations. “The critical question is, what was the cause for the breakdown in their model before saying that the model was the problem,” said Choi. She noted that as a private, for-profit company, TechShop did not share their internal operations plan nor finances.

Choi cautioned that broader conclusions about the health of maker spaces should not be drawn from the TechShop experience. “One important message is that TechShop is one corporation,” she said. “It shouldn’t stand for the entire maker space community.”

Other models

Lee Wellington, executive director of the Urban Manufacturing Alliance, echoed the surprise expressed by TechShop’s closing. In UMA’s work with the manufacturing community she said they are hearing from people that were stunned by the closing, along with others who acknowledge that operating a successful maker space can be challenging. The sudden closing has caused other organizations to take a look at their own models, she said.

UMA’s co-founder and board chair Adam Friedman likened TechShop’s private, for profit membership model to a gym, which constantly has to increase the number of members to be successful. Instead, he noted that a mixed revenue model is a more popular and perhaps stronger business model for operating a maker space. However, there are many iterations that a maker space may take, from TechShop’s membership-driven model to community run spaces that may engage in contract manufacturing to help diversify their revenue stream.

The value in a maker space can range from giving hobbyists an outlet to produce goods to training workforce on new equipment and collaborating with other companies as well as creating a future manufacturing workforce as young people connect with the spaces and become interested in making things. And those involved in the community say the demand for such a place still exists.

Friedman, who also works as the director of the Pratt Center for Community Development, noted that maker spaces have changed the way a product may find its way to market. When entrepreneurs have access to expensive machinery and a collaborative environment in their community, they have a “radically different” way of launching a product, Friedman said. Lowering the barriers to entry and getting more ideas and products into the market as a result benefits the entire innovation ecosystem and makes it more equitable for many players. Veterans, students and other segments of the population are able to benefit by participating in maker spaces, and frequently outside sources of funding may be available for facilities that specifically try to align themselves with different training or educational purposes.

While there continues to be demand for such spaces, the challenge comes in making them sustainable. Maker spaces themselves are places of innovation, Friedman said, and the model will have to innovate as they grow. “They will evolve,” he said. “We have a more entrepreneurial society than we did 15 to 20 years ago.”

Building community

Beyond increasing access to tools and lowering the barriers to entry, maker spaces help build the community, maintains Carol Pepper-Kittredge, the statewide project director at California Community Colleges Maker, Sierra College. “It’s not about the tools,” she said, “It’s about the students and faculty and partners.”

She said it is important to know your community and its needs, then to map out the ecosystem and possible partners before determining whether opening a maker space makes sense. After examining 34 interested community colleges in California, CCC Maker funded maker spaces for 24 of them for a total of $6 million.

Training extends beyond the classroom and there are more opportunities to cross collaborate in a maker space, she said. “It is a unique place where ideas can be born, students can experiment, faculty can refresh, and students are launching their own businesses.”

While Pepper-Kittredge has seen larger companies create their own internal maker spaces for R&D purposes or to train employees on new technologies, she noted that there are many different maker space iterations.

Large manufacturers should be looking into maker spaces to help build the entire ecosystem, Wellington maintains, saying that everyone has a stake in the community to ensure its success and that established manufacturers benefit from a community of people who are makers: “When you take an ecosystem approach to manufacturing at large, there is a value proposition for manufacturers to get into that space.” 

maker spaces, manufacturing, innovation