What does the TechShop corporate strategy shift indicate?

Make has republished the letter TechShop CEO Dan Woods to his membership in which he announces a change in focus from standalone membership-driven makerspaces to a licensed model inside existing institutions like schools:

Today TechShop is making a fundamental change in how we do business by announcing our new partner licensing model. We are seeing a constant and increasing interest and demand from new markets eager to invest in makerspaces to transform their communities and to generate the kind of economic and social impact that TechShop has had in its existing markets.

The licensing and managed services strategy will allow us to co-develop new locations with strategic partners – corporations, universities, municipalities, real estate developers – and rapidly grow a network of stores across the country. Licensing will allow us to be more flexible in how we structure each new location and will enable us to access funds from a wider variety of sources.

While we are announcing this new strategy today, we have been using the model successfully internationally with partner-operated stores in France, Japan, and the United Arab Emirates with many more countries in development. The experience has shown us that this is a highly successful business model and hence, our intention to bring it back home to the US.

We will build on our 11 years of experience to provide a full spectrum of services, including licensing, design, staffing, equipment provisioning, management, and operating solutions to third parties, such as the aforementioned universities, foundations, municipalities, and corporations. We believe this is a smarter way for TechShop to leverage its IP and expertise to meet the accelerating demand for makerspaces around the world.

Sadly, in re-envisioning their model, they realized that the TechShop in Pittsburgh must close effective September 1.

This shift in focus is accompanied by reducing the “corporate staffing” by 50%.

Each of us is going to have our own reaction to this news. For me, the Pittsburgh closure is significant given how important the work in Pittsburgh has been for youth and teens: the Hive movement and the Children’s Museum of Pittsburgh’s leadership in makerspace development for youth and teens in libraries and schools among them.

But more importantly, I think, is the recognition that the standalone community or member-driven makerspace model is not proving to be as viable — at least as a commercial venture — as licensing the model in other organizations (particularly schools) might be.

I have long argued that, particularly in small and rural communities, the challenges of creating and sustaining a standalone building and organization is not feasible, but building upon existing organizations and community anchor institutions is. In those existing institutions, there is infrastructure (a board of trustees, space, utilities, etc.) that does not need to be created and managed from scratch, for example. And in many rural communities, shrinking populations mean there is unused space available.

I believe TechShop’s decision is a harbinger of changes to come and, particularly without the ravenous enthusiasm of Obama’s administration, is entering a new era. I don’t think community enthusiasm for creating things is fading; more, the fiscal realities of long-term sustainability in the standalone model may be coming into play.

What do you think?

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