In our April Issue 021, we heard from Steph Piper and Brett James about the amazing Hackerspaces throughout Australia. This month, we’re delighted to hear from Steph again.

Steph and team have just attended the Startup Catalyst Maker’s Mission, a ten day trip to Silicon Valley to attend the Bay Area Makerfaire and visit various makerspaces and hardware co-working spaces.

We thank Steph, Dominic and Skip for sharing their findings with us.

It’s an interesting time for the maker ecosystem since the fallout of Techshop and now MAKE/Makerfaire. Here’s what we believe makes a sustainable space.

HERO IMAGE: Learn Neon lighting at the Crucible, Oakland California

In writing a previous article, ‘Australian Hackerspaces and where to find them’ we stumbled across many ‘ghost’ makerspaces. Websites that had been left behind from spaces who had closed down for various reasons. We called three of these spaces and found they had been bootstrapped by passionate makers but could not remain open due to financial pressure.

It’s well known that makerspaces and hackerspaces are not a lucrative business model and more of a passion craft, but is it possible to build a space that’s not a strain on volunteers and financially sustainable? After visiting Silicon Valley on the Startup Catalyst Maker’s Mission, we found the key elements in a successful and a failing makerspace.

Critical to this is diversifying income streams. Each space is different and caters to different niches in maker culture, but these six ways to generate cash flow can be adjusted to fit your own local maker community.

Membership Fees:

As a standard, many community hackerspaces charge a ‘student’ or ‘starving hacker’ fee in the order of $25-45 per month, and a standard membership fee of $60-120 per month. This ongoing cash flow is often the bread and butter of makerspace income.

Spaces like Arc Hardware Incubator in Brisbane also specialise in co-working for hardware specialised startup companies, offering a variety of accelerator programs for 4-12 week duration. Many spaces also offer a discounted membership for volunteered services or it’s built in as a requirement of every member.

NIMBY in Oakland, California offers membership on a ‘rent the space you use’ model, specialising in large-scale builds for the burning man festival. The name stems from ‘Not in My Backyard’ and members place their own shipping containers and vehicles on their large site to work on.

Workshops:

Holding workshops in your makerspace is core in building the skills of your community and bringing new members into the space. Workshops can generate revenue for the space and the teacher, a powerful incentive to bring new specialised teachers and classes to your space.

The Crucible in Oakland, California teaches over 800 classes per year, from glass blowing and forging to sought-after neon light workshops.

All teachers become staff on the books and class equipment is checked in and out of a library of PPE and tools. Students often travel there for a ‘Makecation’ to take a number of classes over a week.

Makerspaces & Co. in Marrickville, NSW teach ceramics, screen printing, and recently held a week long series of classes including building your own coffin, cremation urn and headstone.

Vending Machines/Consumables/Kits:

Selling consumables such as PPE, food and maker ‘jellybeans’ is a great income stream to boost the usability of the space and can also be good collaborative projects if a second hand vending machine is found.

The Brisbane Hackerspace has six vending machines, including soft drink, exotic soft drink, popcorn, food/jumper cables/Arduinos, and two coffee machines. A ‘spacebucks’ system has also been implemented where members can put cash on their RFID membership cards and pay for drinks without coins.

Consumables such as 3D printer filament and laser cutting acrylic can also be charged for at a profit while still being very affordable for members. Honesty systems with soft drink and snacks can also be assembled on a budget.

Noisebridge Hackerspace in San Francisco is leading an open source development of VR headsets, and are seeking to sell kits as a way of progressing the project and to earn revenue to support the Noisebridge Hackerspace. This type of niche project is a great way to attract members and extra revenue.

Sponsorship & Grants:

Sponsorships and grants are great for one-off cash injections but cannot be relied upon for ongoing support. After the TechShop franchise closed, displaced members funded Maker Nexus, a new space garnering $300K in donations to set up shop in Sunnyvale, California.

In 2018, Brisbane Hackerspace was awarded $13K in grants to purchase high quality woodworking, metal working and electronics equipment. At the same time, Sunshine Coast Maker Space was awarded $20K in grants under the same program which it used to purchase a laser cutter and air compressor. While grants are useful, they often have strict rules and reporting and may be based on a spend and claim model which limits their use by organisations which lack cash reserves.

Fabrication Services:

Offering fabrication and R&D services is often overlooked by volunteer style spaces, but is key in spaces with paid staff. The Sunshine Coast Makerspace specialises in this service, with projects such as outdoor signage and window shutter retrofitting in their portfolio. This provides employment opportunities for members too.

ADX Portland, Oregon is another great example space who has designed and fabricated custom tap handles for a craft brewing company.

The Crucible also has a space for ‘jobs board’ where any project with a budget over $50 can be accepted by members.

Learning From Failed Spaces:

The most spectacular fall was TechShop, who filed for bankruptcy in 2017, closing all 10 locations across the United States. While some branches of Techshop were turning a profit, they expanded too fast without a well-refined business model. We heard from other spaces who witnessed the fallout, describing how they wouldn’t fall into the same traps of shiny equipment and unnecessarily large spaces.

High end equipment is often great value to members, but at what point is it too expensive to fund consumables and maintain? It could be cheaper in the long run for members to send fab jobs elsewhere if the equipment is not fit for business purpose.

When finding a space, make sure that it’s the right size and grow over time. If you start with too large of a footprint, it’s a waste of space and rent.

Other learnings mentioned were creating too many cost cutting ‘coupon’ deals and not building and maintaining a community around the TechShop brand.

While Techshop’s failings, in part, come from the ‘go bigger’ tendency in the USA, Australians often have the opposite problem of being too humble. One of the biggest mistakes in Australian Hackerspaces is to lockdown the burden of space upkeep to a few core members who may foot the bill and try to bootstrap the space as a personal community service. This often results in burnt out members who lose motivation for the space. Creating reliable income streams and a ‘pass the torch’ approach to leadership creates thriving, sustainable spaces in the long run.

Special Event Fundraising:

NIMBY Hackerspace has an outdoor bar and hosts regular parties as a way of attracting new members, networking and raising cash for projects. Fundraising through liquor sales is possible through one-off style events, see your state community liquor licencing for more details. Aligning these events with ‘Making’ activities or with guest speakers keeps the event on brand. Fundraising through sausage sizzles or stalls at cosplay conventions are other great ways of promoting the space to the local community.

In CONCLUSION

Considering that Steph, Dominic and Skip are very active in the makerspace world, these seven lessons should be taken very seriously to ensure your maker or community space remains viable.