[Finance] Startup Costs

Thu Oct 28 17:33:19 CEST 2010

I had spoken with Jim Newton in the past, asking him a few things about 
TechShop, and how they did it, his thoughts, etc. A couple of months 
ago, he was in town talking to the people of Jet, that make the cnc 
mills, etc.  I Gabriel and I got to spend about two hours talking to 
him, discussing the maker movement, what his goals were, and how things 
were going for our respective ventures. The TechShop model is awesome as 
a business model. They do not buy used equipment. They buy new stuff, 
and make sure it's serviced regularly. They have 'Dream Coaches' that 
help people with equipment, watch over the place, and offer suggestions 
to members needing help.  You have to admit, they have taken the Maker 
movement, and made it into a business. I don't fault them for it, and 
honestly, I am dying to go see one in action. Now, given that, I don't 
think that the Hacker Consortium is destined to operate that way.

We have a $100 fee to join, and $40 a month for dues. The $100 a month 
goes towards infrastructure costs, and the $40 a month goes towards 
electricity, cable, water, insurance, etc. We put the $100 fee in for a 
few reasons. One, we needed capital to rebuild the interior of the 
building, wire it, and improve on it's appearance. We also put it in 
there so that we sorted the wheat from the chaff, so to speak. The idea 
being that if you were excited enough to join, and you laid down $100, 
you wouldn't just join, come here and there, and when your interest 
picked back up, re-join by paying $40 and keep going. Let's face it, 
unless you have some angel investors that keep pumping money into the 
venture, you have to make sure you have a solid stream of membership 
dues coming in to pay the bills. It's been estimated that I've put about 
$5K into this maker space. I'm fine with that, as I've gotten way more 
out of it than I have put in, based on the friends that I have made, and 
the fun that I have had. $5K will buy a lot of hookers, but the event 
still leaves you feeling hollow inside and unfulfilled. I'd rather put 
my money down to get the HC going than to have meaningless sex for 
money... Well, ok. maybe OCCASIONALLY. :)

The bottom line is that to keep the doors open, we have to have members, 
but we can't support it on hugs and smiles, we need people to 
contribute. You can do the 'pay as you go' model, or the 'pledge what 
you can' model, but we felt that we needed a more solid commitment. I 
know that I could pay the bills out of my pocket each month if 
necessary, but honestly, I would rather not. If our membership falls 
below a level of sustained income necessary to keep the bills paid, 
Gabriel and I will open our wallets and make it happen.

One of the most interesting things that I learned from Jim Newton was 
this... The Hacker Consortium was closer to the model that he originally 
wanted to do that is the techshop model that he's currently doing. I 
don't think Jim entered into this with a profit motive. I think he 
entered into it wanting a space to do the things that he wanted to do, 
but it grew into TechShop. He's a talented businessman, a great speaker, 
and I think his heart is in the right place. Oddly enough, he said he 
has a list of projects he wants to work on a mile long, but he's too 
busy working on Techshop to actually get to do them. It's sad but true. 
Sometimes you'll be faced with putting your projects off in lieu of 
helping members, or running the space. I do have to say that it's well 
worth the time and effort though.

I know that there are different models. I am not saying that one model 
is better than the others, or that ours is best. Depending on members, 
location, needs, etc, you may have to change your model, or come up with 
a new one. The best bet is to be informed as much as possible, and both 
listen and ask questions. Find what is right for your circumstances, and 
then do everything you can to make it work. You may not always be the 
most loved person on the planet when you have to make a hard decision, 
but someone has to.

-Trevor Hearn a.k.a. SkyDog
www.hackerconsortium.com

On 10/27/2010 2:25 PM, Jeff Cotten wrote:
>
> I've never used this site, but I thought it would be a good tool for 
> someone wanting to start a for-profit techshop type space.
>
>
> http://www.kickstarter.com/
>
>
>
> On Wed, Oct 27, 2010 at 1:30 PM, Christopher J. Pilkington 
> <cjp at 0x1.net <mailto:cjp at 0x1.net>> wrote:
>
>     On Wed, Oct 27, 2010 at 09:23:45AM -0700, Grant Henninger wrote:
>     > model than most hackerspaces.  We want to run more like a
>     for-profit service
>     > company than a co-op.  One of the reasons we want to buy a lot
>     of the equipment
>     > up front is so we have a full set of services we can offer and
>     keep early
>     > adopters coming back.  However, I think you all have a good
>     point about ways to
>
>     So you are adopting something like the TechShop model.
>
>     This model is not a hackerspace at all IMHO, so I think you
>     should probably seek other input regarding start up costs.
>
>     For example, if I were looking to join a TechShop-type
>     establishment, I would expect and demand access to a full
>     compliment of professional-grade tools, as you listed.
>     (Although, I think you mentioned MakerBot, I'm not sure that's
>     appropriate for a for-profit workshop, but it might be ok to
>     start with.)
>
>     For a collaborative, donation and membership supported
>     hackerspace, I'm willing to put in the elbow grease, extra money
>     here and there to fix things and acquire new tools. I wouldn't
>     be willing to do the same in a for-profit space (unless perhaps
>     I was a shareholder.)
>
>     We are starting our non-profit membership supported space on a
>     shoestring. All the tools that we will have day one will be
>     member owned and on loan to the space, until we start saving up
>     some money.
>
>     -cjp
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