After the last Wavemaker board meeting I started writing a letter to the board members. This is the contents of that letter.
Dear Directors of the board, Friends, Wavemakers,
Over the last three years we have discovered that there is an appetite for making, we’ve raised awareness, we’ve reached out to communities, networked, grown and most importantly learned. However, this hasn’t been enough to bring us profit.
I’m nervous about the future of Wavemaker, that the great opportunity we’ve got is slipping away, that that we’re at risk of drifting away from the vision that we set out to deliver. I worry that we’re about to rip the heart and soul out of what we do, to just chase profit. However, that said, I do understand that, as a business, we do actually need to make money.
When I first started trying to find a space for the Potteries Hackspace, I visited Stoke council. They asked me if it was just a hobbyist group, I think “boys with their toys” was the phrase they used to describe it. They said to me that unless we could come up with a business model, they wouldn’t be able to help. Although I do somewhat resented what was said, the challenge teaches a valuable lesson. There’s nothing wrong with having a hobby, but if you want it to become a business, you have to make money.
As someone who has ran a number of small businesses over the years, I know how easy it is to lose sight of what’s important and get caught up in projects and tasks that have nothing to do with making money.
A business needs to make money. It sounds obvious, but it’s easy to get distracted. It’s not being liked, or having a huge social media presence. It is not having a beautiful website. Business is not a popularity contest. What we need to have are recurring activities that are directly tied to making money.
Don’t get me wrong, I was never in this to make money. For me, it’s always been about addressing issues in the community and society as a whole.
I recognise that the wonders of technology today have allowed us to be connected to each other in real time. Yet, it has also enabled us to become disconnected, isolated and socially alienated. For many, they have lost their sense of community.
For young people, social media and online bullying are hot topics on the political agenda. Antidepressant usage has doubled in the past decade. Meanwhile men are told that going to the pub boosts their wellbeing. This can’t be right.
When I was young, I found it frustrating that I wasn’t able to do anything about problems in society and would think “someone should do something about that”. I’ve found, as I get older, that, that someone is me or people like me. It’s up to us to build the future that we want for our children and “be the change you want to see in the world”.
Back in 2010, when the government was talking about “Big Society”, giving communities more powers and encouraging people to take an active role in their communities. It got me thinking about how I could play a part in improving our community. I really wanted to make a difference. I just needed the right opportunity.
Around 2009, hackspaces had started to setup in the UK. Then in 2012, I heard about “EMF Camp”, basically, a maker festival. I had missed it. So, I decided to get involved in a hackspace to avoid missing out again. This, I felt, was the opportunity I had been looking for.
What I set out to do was create a community of like-minded people with the ambition of building a space where we can meet and make. And, with the hackspace, I feel I’ve achieved that goal.
With Wavemaker it was different. The idea evolved into the idea of creating a future where there’s a place that our children can go to and make what they want to make, to turn their ideas and dreams into a reality.
However, despite our best efforts, if we have any chance of securing the future of a makerspace in our city, we’re going to find it very difficult without significant funding and especially without a solid business model.
I remember reading a great article not long ago about how taking bookings are a terrible business model. It went on to give an example of a hotel, subject to the whim of the weather and seasonal trade, making cashflow tight and impossible for growth. That’s not to say that hotels can’t be good businesses, but it did go on to explain why the subscription model is so much more superior.
My view is simple. We have to be very clear about our offering.
You only have to look around at anything you own and you’ll find a subscription model. Your phone, Internet, TV, music, movies, software, magazines, etc. The subscription model works, it’s why Microsoft has switched their Office product to be subscription based. It’s why Amazon offers their Prime subscription. It’s why Sky and Virgin compete for your business. It’s why Spotify and Netflix are household names. It just works.
I’m really passionate about this project. I’m always keen to talk to people about it in the hope they will get involved. But telling people isn’t directly going to make us money, we need them to take action too. Having a clear offering lowers the barrier for people to not just get involved, but to take action and be invested. Our call to action should be to subscribe to our mailing list so we can send them offers later or better, get people signed up for a paid membership.
In a 2014 report from NESTA, Manchester Fab Lab reported the largest membership rates of the makerspaces surveyed, followed by MadLab (Manchester). Infact, 77% of makerspaces are member organisations, with 55% offering a flat monthly or annual fee.
Most UK makerspaces have small member communities, with 60 per cent having 50 members or less. Five per cent have over 1,000 members, indicating a handful of larger spaces across the country. Makerspaces with varied payment models have 83 members on average, while makerspaces charging flat fees have 108 members on average.
“The most common payment model is a regular membership fee”
The subscription model is not the only revenue stream for these facilities, with 68% offering formal classes for learning, but visitors’ reasons for accessing the makerspace were predominantly social – ‘making’ was the third most common reason people visited makerspaces, after ‘socialising’ and ‘learning’.
A survey Potteries Hackspace took in 2016, (sample of 11), revealed that most people wanted both a clean office space and a workshop space for machine work. The average subscription commitment was £25 per month.
For a makerspace to work, equipment is a key element. It’s no good having an old laser cutter, if few people want to use it. TechShop Portland learned their lesson the hard way and found that all new locations must feature brand new equipment.
The biggest challenge with this model is that even with 80 members paying £25 per month or 50 members paying £40 per month, that’s only £24,000 per year. Which would pay for the space, but not staff. In order to bolster that vision, it would require something more.
With that in mind, and the fact that we’ve been running for three years and we’ve not managed to become self sustainable, I find it difficult to see how the project is going to generate enough money to staff a space going forward without some radical sponsorship or funding.
Equipment is expensive, but funding options are available, for example “Community Chest” type funds offered by councils, which will support the “purchase of equipment for wider community use”. Or a Kickstarter to raise funds for tools, like “Build Tampa’s First Hackerspace”, with their pitch of “we need tools and equipment to do even cooler things”. Or sponsorship from large corporations, like JCB or KMF. There’s no doubt about it, we’re going to have to do some hustling.
Now is the time to pivot. Less of a training centre and more like a club that people can subscribe to, like a gym membership.
Just recently “The Sharing Depot” opened up in Canada, offering a membership of $50/year. As people have less and less disposable income to spend on purchasing expensive equipment and space is at a premium, the demand for a “library of things” and space to work in will increase.
DoES Liverpool, in addition to its regular services, it also offers a “Friend of DoES” membership. In a 2 year period, they had 169 payments amounting to over £1,500.
Inspired by the Chaos Computer Club and the C-base in Berlin, in 2006, Paul Bohm came up with a fundraising strategy based on the Street Performer Protocol to build Metalab in Vienna, Austria, backed by 40 members and 4 sponsors. Baghdad Community Hackerspace Workshops, 671 backers, raised $29,471, pledged of $27,500 goal. Build Tampa’s First Hackerspace, 157 backers, $16,185, pledged of $10,000 goal.
In 2012, TechShop opened a location in Metro Detroit, in a 38,000-square-foot facility in the suburb of Allen Park. This facility was launched in a partnership between Ford and software company Autodesk, and is the largest TechShop facility to date. Membership is $150 per month.
MakerClub, a Brighton based tech SME originally set out to specialise in making 3D printing accessible to anyone and everyone. It’s now a network of after-school clubs that based in the UK designed to teach invention, and all the skills that come with it. Their platform allows us to partner with schools, Universities and makerspaces to teach these emerging technologies. Originally by Creative England, after successfully completing 2 crowdfunding campaigns, they received over £200k in R&D funding from InnovateUK, Nominet and the UFI Trust, and now employ 4 full time staff.
Similar to MakerClub, I would seek to back an emerging technology, that can be tied to a big player, like they did with 3D printing and Autodesk (eg: Internet of things and Intel or Microsoft, Cloud technology and Amazon, Big Data and the Government or AI and – pretty much any large tech company on the planet). This could form the core offering of our subscription based business model.
I envisage a future where this is a reality by demonstrating growth in our business plan opening us up to further avenues of funding for us, such as R&D tax credits and growth grants.
You might question if the vision we set out is too ambitious or even possible at all.
Maybe we’re living in a fantasy world and this just isn’t how things work. Perhaps it’s just too outlandish. The reality is though, there’s a wealth of knowledge, including research papers by universities that suggests otherwise, but that does not mean a venture such a this is without it’s risks and challenges.
If we do it right, we could have a business model that will scale. I see us as being able to compete with “TechShop” and FabLabs in other cities. After that, we’ll soon be putting together another business case for an area with similar social issues and roll out another space.
There’s few times in life that you’re presented with a clear fork in the road. Yet, I’ve seen this one developing over the past few months. I’m not the shy and retiring type. I will always speak out for what I believe in.
There’s a time for talk and a time for action. Now is the time for all of us to act.
We’ve already dipped our toes, but we need to do something new. We need a clear campaign, something that we can all get behind, across all communication channels, week in and week out, relentlessly. Something that says, we’re here and we’re not going anywhere! We should be leveraging our ability to network, to promote and influence.
I’m keen for us to focus on a core offering and getting people signed up it, a subscription model or, failing that get them added to a mailing list so we can target them later, with our secondary offerings such as learning and training opportunities.
I’m nervous about our future but I’m not afraid of making things better.
We are building something important, something that matters to our community, something that we can all tell our grandchildren about. Nobody said it would be easy.