Makerspaces – the commercial venues where creative people gather to design and make their products – are under pressure to transform their business models or face closing shop.
A growing number of makerspaces have ceased operations or are under threat because of rising rents, building redevelopments and not enough cash flow to cover costs.
Unsustainable business models are partly to blame. 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.
In a makerspace, users often pay monthly membership fees or drop-in rates to use the space, including materials and equipment such as laser cutters, 3D printers, sewing machines and woodworking tools. Access to these venues can be unreliable as economic pressures lead to closings, forcing users to find other places to create their products.
Toronto’s MakeWorks announced recently it will close in August, stating “the main driver is economic.” The 10,000-square-foot co-working space in a restored factory on Toronto’s College Street is being replaced with a Dollarama. “MakeWorks ownership tried hard to find a sustainable business model over the years, experimenting with pricing and a variety of services, but ultimately it proved too difficult,” MakeWorks stated on its website.
TechShop Inc., a U.S.-based chain of membership-based, do-it-yourself workshops, filed for bankruptcy and closed its doors in late 2017 after running out of money. In the announcement, TechShop chief executive officer Dan Woods said his for-profit company “invested too many years and too many dollars trying to prop up the wrong business model.” He said for-profits are “impossible to sustain without outside subsidy from cities, companies and foundations, often in the form of memberships, training grants and sponsored programs,” which are available to non-profits but rarely for-profit enterprises.
Maker Media, the U.S.-based company behind Maker Faire art festival and Make magazine, closed earlier this year. The company was considered central to the maker movement, helping people with do-it-yourself art and science projects. The Toronto Maker Festival, held at the Toronto Reference Library, was cancelled this summer because of a new criminal record check policy, which organizers said was driven by the City of Toronto and would have been too complicated to manage based on its hundreds of makers and volunteers.
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.
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.
In Calgary, Mr. Hoover says makerspaces such as his Fuse33 are tapping into new market opportunities and filling a void that other organizations have missed. Fuse33 moved into a larger 8,500-square-foot space in early 2018, up from about 2,800 square feet, with a focus on helping startups launch businesses. Some entrepreneurs using the space include a doctor making orthotics, a gaming company producing tokens and an Indigenous artist making earrings.
MakerLabs, a for-profit makerspace on Vancouver’s Eastside, has grown to 42,000 square feet across two buildings up from a 500-square-foot space when it started in a pop-up shop in 2013, by offering a wide range of products and services.
Derek Gaw, MakerLabs’ director, was a member of TechShop in San Francisco in 2012 and 2013 before returning to Vancouver to start MakerLabs. He says there were challenges in the TechShop business model that he is avoiding in his venture.
“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."
Mr. Gaw believes MakerLabs has been able to grow based on its business model of selling memberships and drop-in access to the workspaces, as well as interdisciplinary fabrication services. MakerLabs also has education programs for people interested in learning how to use the tools.
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.
“You need to provide a space that is a destination and give them a reason to be there,” says Mr. Salmon, whose government-funded makerspace was launched in 2016 and was moved to a new location in the centre of Newmarket earlier this year.
While the makerspace business model is changing, proponents are still working to maintain their presence amid challenges such as gentrification.
Esther Rausenberg, artistic and executive director at the Eastside Culture Crawl Society, which represents more than 500 artists in more than 80 buildings in Vancouver’s Downtown Eastside, says there’s “an unease” among artists in her community given the steady erosion of space owing to rising rents and redevelopment. Her organization is doing a study of past and current spaces in the area. The data will be used to push its proposal that the city force industrial developments to make room for artist production space at subsidized rents.
Makerspaces are also getting smaller, she says, which affects how and what artists create. Ms. Rausenberg says some “are having to steer some of their work primarily toward what’s commercially viable. I think that’s a huge loss in terms of where we’re going as a society … indirectly suppressing creativity and expression.”