The drop-in centres allowing new US tech firms to grow

President Obama President Obama recently gave TechShop his enthusiastic backing

You know a US small business has made a big impression when President Barack Obama visits to praise it in front of the TV cameras.

The company in question is called TechShop, and it runs a growing network of open access manufacturing workshops.

With eight centres across the US at present, in return for a monthly or yearly fee, members can drop in and use state-of-the-art manufacturing equipment, everything from 3D printers to laser cutters.

The first of its kind in the US, the aim is to give people access to machinery they otherwise could not afford, or even dream of being allowed to use. Many commentators call this "democratising manufacturing".

And while many of TechShop's members are hobbyists - people using the facilities to make things for fun - a growing number of start-up firms are successfully using TechShop centres to get their companies off the ground, as President Barack Obama highlighted last month.

Start Quote

It doesn't matter how cheap the real estate. If it's too difficult to get to, it doesn't make any sense”

End Quote Mark Hatch TechShop chief executive

Visiting TechShop Pittsburgh, he said: "For the price of a gym membership people can become members of TechShop, and able to have access to a bunch of cutting edge technology.

"Folks are able to create products, ideas, in some cases just doing [it] as a hobby or for pleasure, but in some cases ending up as businesses which are thriving."

President Obama went on to praise the likes of TechShop, and its newer workshop competitors, as being at the forefront of what he sees as the continuing strong recovery of the US's manufacturing sector.

Cautious expansion

TechShop is the brainchild of Jim Newton, 51, a robotics teacher at the College of San Mateo, and a science advisor to the TV show Mythbusters.

Mr Newton came up with the idea when he realised that he wanted somewhere he could go to work on his own manufacturing projects, but also as a result of his students complaining that they couldn't access the equipment they needed.

A man working at the San Francisco TechShop TechShop currently has eight centres, with two more due to open in the coming months

Yet while having a good idea for a business is one thing, funding it is quite another.

Mr Newtown says: "And no one in their right mind was going to touch it, certainly not banks given that we had no track record."

Start Quote

Max Gunawan

TechShop, and being able to use all the machinery I needed, was essential in allowing me to get my prototype made in a very quick time span”

End Quote Max Gunawan Lumio

With Mark Hatch, a former executive of FedEx Office coming on board as TechShop's chief executive, TechShop was eventually able to secure financial backing via a crowdfunding campaign, whereby members of the public invested money in return for being the first to gain membership.

And so the first TechShop opened in Silicon Valley, California in 2006.

Even though it received almost instant acclaim, TechShop has deliberately been slow to open new centres, despite Mr Hatch saying that "ultimately we would love to have a TechShop in every town [in the US]".

The reason for this is because not all TechShop centres have worked, with two having had to close - Beaverton in Oregon and Raleigh in North Carolina.

Mr Hatch says the facility in Beaverton, which is 30 minutes outside of Portland, Oregon's largest city, was just too far away from Portland's "creative class".

Meanwhile, the Raleigh facility was also "just way off the beaten track".

Mr Hatch adds: "It doesn't matter how cheap the real estate. If it's too difficult to get to, it doesn't make any sense."

With Techshop membership costing from $99 (£58) per month, each TechShop centre needs to have 800 members to break even, which adds to the company's caution.

Matt Elliot of SolePower SolePower still makes use of the TechShop in Pittsburgh as it moves towards selling its product

Mr Newton says: "You don't want to go to a particular city till you have everything lined up, and there's local buy in from the community."

For three TechShop centres help has come from some very large organisations - carmaker Ford, and the US government.

TechShop's Detroit centre opened in 2012 in partnership with Ford, which gives members of its staff free membership for three months.

Ford claims that its tie-up with TechShop has led to a 50% rise in the number of patentable ideas put forward by the carmaker's employees in one year.

Meanwhile, TechShop's offices in Washington DC and Pittsburgh are being used by Darpa, an agency of the Defence Department, and by the Department of Veteran Affairs, which is handing out 2,000 complementary memberships to veterans.

Faster prototypes

But what about the small firms which have used a TechShop facility?

Back in 2012, architect Max Gunawan bought himself a one-month membership at TechShop's San Francisco facility "just to do something creative outside of work".

Lumio light The first prototypes of Max Gunawan's Lumino lamp were made at TechShop

He started working on a prototype for a rechargeable lamp shaped like a book, with all the "pages" lighting up when you open it.

Now, just two year's later, his Lumio light is being sold via his company's website, and from upmarket interior design stores.

Mr Gunawan, 33, says: "TechShop, and being able to use all the machinery I needed, was essential in allowing me to get my prototype made in a very quick time span.

"I would say that for most firms it shortens the time span from between one and two years to about four or five months."

However, the TechShop centres don't have the space for companies to install production lines and base themselves there full time.

And so, once a business has used a Tech Shop to develop its product, the firm has to then go elsewhere to get the item made on a larger scale.

For Mr Gunawan this has meant him needing to get his Lumio lamp manufactured in China, as he was unable to find a workable supply chain in the US. However, he hasn't ruled out possible US manufacturing in the future.

Based in his own office across town in San Francisco, he has now sold 15,000 Chinese-made lamps since they went on sale in November of last year.

TechShop San Francisco Each TechShop needs 800 members to just break even

Another business which has used TechShop, and in fact continues to do so at present, is SolePower, which was founded in February 2013.

The Pittsburgh-based company has developed a shoe insole which generates electricity from a person's movement. The insole can be wired up to a small battery, with the stored energy being able to power a variety of mobile devices via a USB port.

The aim is to make the product available to buy by the end of this year.

A SolePower spokesman said: "Without TechShop it would have been extremely expensive for us to do rapid prototyping of our product.

"TechShop gave us the opportunity to make our parts ourselves, saving us money and time."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    07:48: BRITISH AMERICAN TOBACCO
    Cigarettes in their package

    Cigarette-pedlar BAT has said revenue for the nine months to the end of September grew by 2.4%. "Industry volume has declined at a lower rate than last year, but is being impacted by large excise-driven price increases," it said.

     
  2.  
    SUPERGROUP Via Twitter James Quinn Executive Business Editor, Telegraph

    tweets: "Strong comeback from Sutherland who fell victim to all he tried to achieve at the Co-op Group, and can be credited with rescuing Co-op Bank."

     
  3.  
    07:29: SUPERGROUP
    SuperGroup chief executive, Euan Sutherland,

    Former Co-op Group chief executive Euan Sutherland is back having been announced as chief executive of SuperGroup this morning with immediate effect. He was previously CEO of Kingfisher UK, which operates B&Q, Screwfix and TradePoint.

     
  4.  
    07:21: GERMAN GROWTH BBC Radio 4

    Germany has very low unemployment, Dr Stephanie Hare, senior analyst for western Europe at Oxford Analytica tells Today. "Making more jobs for Germany isn't the issue here," she says. "We need stimulus and investment in countries that are going to help boost the future of Germany's trading partners in the eurozone. So we can either increase demand in Germany, or Germany could be part of a wider European solution to increase stimulus in its eurozone trading partners." She points out Germany has benefitted from other countries investing and stimulating its economy once or twice in the past century.

     
  5.  
    07:11: EUROTUNNEL

    Eurostar results yesterday, Eurotunnel results today. Revenues for the third quarter of 2014 increased 7% to €343.9m (£271.5m).

     
  6.  
    06:57: UK BORROWING Radio 5 live

    "The main reason tax receipts aren't as high as you'd like is the increase in personal tax allowance," says Alan Clarke, UK and eurozone economist at Scotiabank on Wake Up to Money. He's talking about yesterday's disappointing figures. There are more people in work, though, which means less spending on benefits, he says. Low-paid jobs mean that doesn't help as much as you may think, points out presenter Mickey Clark.

     
  7.  
    06:47: GERMAN GROWTH BBC Radio 4

    Christian Schultz, senior economist at Berenberg Bank, tells the Today programme Germany needs to work on its infrastructure, but even if it started to work on inward investment now the effects would not be felt for several years. This as more political pressure builds on Germany to act to avert another eurozone crisis. But German inward investment doesn't solve the problem, he says. "How does Germany fixing some bridges make French and Italian entrepreneurs invest more?"

     
  8.  
    06:34: STORM POWER
    storm

    The UK's wind farms generated more power than its nuclear power stations on Tuesday, the National Grid says. The energy network operator said it was caused by a combination of high winds and faults in nuclear plants. Wind made up 14.2% of all generation and nuclear offered 13.2%. As BBC environment analyst Roger Harrabin reports, for a 24-hour period yesterday, spinning blades produced more energy than splitting atoms.

     
  9.  
    06:24: CITY POWERS Radio 5 live

    On things like transport and education, local government can make better decisions, says Alexandra Jones, chief executive of the Centre for Cities, which does independent research and policy analysis on UK city economies on 5 live. "Whatever you're doing in a city, you have to balance the books, though, she says. Competitiveness on tax becomes a "race to the bottom" she adds.

     
  10.  
    06:13: CITY POWERS Radio 5 live

    "I think there's real momentum... this is the biggest opportunity in decades to transport the relationship with local government," says Mr Wakefield on 5 live. The debate for Scottish independence shows there are a lot of people interested in local powers, he adds.

     
  11.  
    06:04: CITY POWERS Radio 5 live

    Allowing UK cities to make their own decisions on tax and spending could boost economic growth by £79bn a year by 2030, a year-long study has concluded. "More people want local powers in Leeds," says Councillor Keith Wakefield, leader of Leeds City Council on Radio 5 live. He thinks councils can target some spending more efficiently.

     
  12.  
    06:01: Howard Mustoe Business reporter

    Good morning! Get in touch via email at bizlivepage@bbc.co.uk or on twitter @BBCBusiness

     
  13.  
    06:00: Matthew West Business reporter

    Morning all. We have the latest minutes from the Bank of England's September Monetary Policy Committee meeting at 09:30; Argos and Homebase owner Home Retail Group publishes interim results before that and there are trading updates from GlaxoSmithKline, British American Tobacco and Everything Everywhere. We'll bring you it all as it happens.

     

Features

From BBC Capital

Programmes

  • Smart glassesClick Watch

    Smart spectacles go into battle – the prototypes looking to take on Google Glass

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.