Readers: This is an abbreviated version of a letter from TechShop CEO Dan Woods to members, sent out today. We’re republishing it here with his permission.
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.
In the course of developing the new strategy for the business we’ve taken a long, hard look at the existing stores to see how they will fit into our new model. In evaluating store performance we came to the regrettable conclusion that TechShop Pittsburgh is not a fit, economically speaking.
Despite the support of a small but very active community of makers and hardware startups, TechShop Pittsburgh does not meet its operating expenses. As CEO, I have the responsibility to get the total enterprise on a firm footing, financially viable, and capable of long-term sustainable operation. And I can’t achieve this without making some very difficult decisions. Closing TechShop Pittsburgh, effective September 1, 2017, is one of them.
We have worked hard with our landlord Walnut Capital and Bakery Square to arrange to keep the shop operating through the summer months so as to not impact our very full youth STEAM summer program and to buy as much time as possible for our members to make alternative arrangements.
We realize one or more of Pittsburgh’s many foundations, universities, and corporations may step forward to express an interest in becoming a licensee of TechShop Pittsburgh. If this were to happen, we will go the extra mile to ensure business continuity.
We are taking a number of additional steps to get ourselves financially healthy again. A key element is a further reduction by an additional 50% in corporate staffing and right-sizing the staff required to oversee continued improvement of our wholly-owned stores and to deliver outstanding managed services to our clients.
This reorganization of the corporate team will enable us to capitalize on the new opportunities available through this strategic pivot. Our lean and responsive team will build on the existing success of our consulting services and the licensing model of TechShop Global. This team boasts a collective 50+ years’ experience in design, opening, and running TechShops.