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Makerspaces struggle to stay in business even as interest in the industry grows #makerbusiness

Photo/Cromwell Schubarth

 

While there is tons of interest in hobbyist electronics and DIY hardware, makerspaces have had trouble sustainably capitalizing on it. It would seem that the business model is hard to nail down, and there are variety of forms a makerspace can adopt in an effort to balance its books. A recent article in The Globe and Mail discussed a few anecdotal, yet enlightening problems makerspaces have been facing, from small community shops, to grant backed operations, to more high profile profit-focused failures like TechShop.

“TechShop didn’t do a great job of monetizing [its] tools and they didn’t provide fabrication services, which would have resulted in additional revenue streams,” Mr. Gaw says. “TechShop was also venture-backed, so they had increased pressure to expand quickly at the expense of organic, sustainable growth.”

The model for Makerspaces has always been a little precarious. The need for high returns on a venture backed effort seem particularly mismatched for this type of business. But if you’re going to go the profit route:

To be successful, makerspaces need to expand their audiences to include not just artists, but also entrepreneurs and startups, says Shannon Hoover, managing director of Fuse33 Makerspace in Calgary.

“The maker community needs to look beyond people who self-identify as ‘makers,’ creating a model that reaches and adapts to a wider community,” Mr. Hoover says.

A 2015 collection of survey data in Make provides some generalized information that fits this narrative . A discouraging 34% of makerspaces were profitable that year.

On average, 49% of makerspace bottom line was generated by membership fees. If these business are operating near capacity and unable to charge more, they need to look elsewhere.

The City of Toronto, alongside the MaRS Discovery District, George Brown College and Refined Manufacturing Acceleration Process, are partnering to launch a manufacturing incubator, including a 60,000-square-foot light-manufacturing space. A city spokesperson says the space, set to open in mid-2020, will have equipment ranging from 3D prototyping and electronics development workstations to metalworking and woodworking and will operate as a business incubator.

The non-profit and grant avenue is one other way to get extra capital. Indeed, the same Make survey said that 30% of makerspaces receive government subsidies.

Meanwhile, some makerspaces are being launched or rebuilt based on new business models that reach wider audiences and, in some cases, with the support of governments. An example is the 20,000-square-foot Yukon Innovation Hub in Whitehorse, which received $3-million in combined federal and territory funding, which includes manufacturing equipment and educational workshops for potential innovators.

Makerspaces need programming, such as classes and workshops, to be sustainable today, says Derrol Salmon, director at York Region Makers, a not-for-profit organization with a 5,000-square-foot makerspace in Newmarket, Ont.

This is still a young industry, and as these business expand into different geographic and demographic areas, there likely won’t be a one-size-fits-all solution. Both the Make report, and the Globe and Mail piece have some more information to offer, so give them both a look if you really want to get into the weeds.


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