TechShop files Chapter 7...inevitable or ??
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    Default TechShop files Chapter 7...inevitable or ??

    It seems like this company had as good a chance as any to survive, yet still could not. The egalitarian dream of easy custom diy manufacturing is still a ways off. It's too bad, I was really hoping this kind of thing could thrive. TechShop files bankruptcy

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    I bet liability insurance was just eating them alive, what with allowing a bunch of "daisy pickers" loose with shop machinery.

    It appears that the instructors were all independent contractors, so they are screwed, too, without the protection employees have in a bankruptcy situation.

    Nice one, guys.

    Dennis

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    Quote Originally Posted by Modelman View Post
    I bet liability insurance was just eating them alive, what with allowing a bunch of "daisy pickers" loose with shop machinery.

    It appears that the instructors were all independent contractors, so they are screwed, too, without the protection employees have in a bankruptcy situation.

    Nice one, guys.

    Dennis
    Rather than speculating about liability insurance costs (or personal injury lawsuits like someone claimed in a related post), why don't you read TechShop's press release. It says nothing about liability insurance or personal injury lawsuit costs. TechShop was just not a viable business model. The fees were way too high for what you got. I know, my son tried a course. I have some understanding of why the costs were high (real estate, equipment, and staff), but the general public looked at those costs and said, no thanks.

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    I've followed TechShop since their inception. It's like any other "maker space" in that it heavily relies on members/volunteers to keep it running (including maintenance). I've perused a few of these types of spaces here in Ontario with the intention of trying to help out or demonstrate machinery, but never made the jump to being paying member. It's simply too expensive for community-shared tools. If it makes little sense from a member's perspective, I seriously doubt there's a cogent business case to be made. Surprised they lasted this long.

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    Makerspaces earn their non profit status... there is no money in it for a business. You need a person or group of people that are in it for the passion not the money.

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    Yes, it's a non-profit entity but the company still has to have revenue to pay the contractors (in this example). Being non-profit simply means they don't pay out dividends to share holders- there's no "profit" to split amongst the owners.

    Making profit or not, it wasn't a tenable business model. If you're in it for the passion you'd find a way to acquire the tools and create a space to call your own (this board is rife with examples of this).

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    Quote Originally Posted by RC Mech View Post
    Yes, it's a non-profit entity but the company still has to have revenue to pay the contractors (in this example). Being non-profit simply means they don't pay out dividends to share holders- there's no "profit" to split amongst the owners.

    Making profit or not, it wasn't a tenable business model. If you're in it for the passion you'd find a way to acquire the tools and create a space to call your own (this board is rife with examples of this).
    I understand what NON profit means in the legal sense... I was insinuating that they are non profit in the literal and figurative sense. I have hung out and spent time in Madison at the hackerspace Sector67, which is only there and continues to be there due to the owner Chris' never ending drive. They have grown and are moving into a new space soon that they own.

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    Quote Originally Posted by rklopp View Post
    Rather than speculating about liability insurance costs (or personal injury lawsuits like someone claimed in a related post), why don't you read TechShop's press release. It says nothing about liability insurance or personal injury lawsuit costs. TechShop was just not a viable business model. The fees were way too high for what you got. I know, my son tried a course. I have some understanding of why the costs were high (real estate, equipment, and staff), but the general public looked at those costs and said, no thanks.
    Actually, I did read it, and in the FAQ's it clearly lists insurance. I quote::

    "Why didn't TechShop file Chapter 11?TechShop leadership worked tirelessly to explore options for filing Chapter-11 bankruptcy. Thisalternative would have allowed us to restructure our debt as a significantly reduced company whileproposing a new business plan to the creditors and the bankruptcy court. To file Chapter-11, however,TechShop would need cash to pay an even further reduced workforce, instructors, rent, utilities,insurance, and the like. That is money that this company simply does not have. TechShop can no longerask instructors, employees and contractors to work when the company does not have adequate cashreserves to pay them. Most regrettably, the only viable path forward is filing Chapter-7."

    Can't say if placing it last in the list means it's of least concern, or conversely greatest that they want to downplay, but it's there. All I know is that in today's litigious society, everybody has to deal with rising insurance costs, and various other endeavors have fallen by the wayside because of it.

    Dennis

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    Modelman, we are all free to speculate. My speculation is that income did not meet expenses, and that insurance was just one item on the list of expenses. That's certainly consistent with the experience at the Portland TechShop, which was on reduced heating before the end and had a well-drilled protocol for turning on the lights to avoid utility peak charges.

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    Industry in all its forms, from the largest rolling mill to the smallest machine shop, is a Darwinian struggle, survival in which requires brute, relentless persistence, and profit is a more powerful motivator than all the idealism in the world. While "nonprofit" is the temporary lot of somebody struggling with inadequate resources, if it's a permanent state it's indistinguishable from failure. I wouldn't have high hopes for the success of an "enterprise" defining itself as nonprofit. You don't learn machining until you are forced to confront the fact that time equals money. Sorry, but without that it's just a sandbox.

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    Quote Originally Posted by Oldwrench View Post
    Industry in all its forms, from the largest rolling mill to the smallest machine shop, is a Darwinian struggle, survival in which requires brute, relentless persistence, and profit is a more powerful motivator than all the idealism in the world.
    Therefore, you have ended up with a society in which nothing counts except money. Ethics, talent, pussy, health, relationships, all for sale to the highest bidder. If it doesn't make a profit it can't live.

    Great system.

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    Greetings all,

    I taught for them early on, at the original location in Menlo Park. Woodshop, weirdly enough. (Take somebody with half a lifetime's experience with metalworking, and put them in the woodshop. Go figure.) Helped write some of the early woodshop safety stuff.

    I'm sad to see them go, but not terribly surprised.
    What I can say is that the members and line staff were some of the neatest people I've ever met. I walked in and it was an immediate sense of "I've found my tribe!". Brains and enthusiasm. What's not to like?
    Yeah, you had idiots abusing the gear, but you get that anywhere.
    We had a joke among the instructors: the *really* dangerous ones were the PhD's and Engineers. They already knew everything, you see... It being Silicon Valley, we had more than our fair share of them.

    I taught for them for about 2 years, but eventually had to leave, for reasons that will become clear in a bit. The early instructors were very high skill people who were teaching mostly because they thought they needed to, because they were the ones in the group who already knew whatever skill it was. As things progressed from a group of believers in a startup space into a more corporate structure, the focus shifted,and it became more corporate.
    The instructors were all contractors. Which is entirely normal in the valley. *Everybody* is 1099 scum, or was then. Remember that it really got rolling in the teeth of the 07 crash. Lots of people floating around looking for gigs. Most of the command staff were software management types, so of course they keep everybody as a contractor. Which is fine, in areas with low liability. They had been promising to work on an insurance policy to indemnify the instructors for more than a year by the time I finally got sick of it and left. I had been doing the woodshop safety stuff, and developing the basic SBU's for that. If somebody was going to get sued, the odds are good it was going to happen in the woodshop. So I even asked them to pull my name off the things I wrote for them when I left.
    The problem with not indemnifying the instructors is that they limited themselves to young kids with nothing much to lose. Anybody who knew enough to be a serious instructor would have too much stuff to want to risk it for ?20/hr? or whatever it was.
    I left in late 2010, and many of the early instructors were starting to fade out by then. Which left it to be run by the software types and the kids they hired.

    The other issue is that the management was starting to remind me of some of the non-profits I've worked for.
    I crewed tall ships in my 20's. Loved it. Love them still. They get into your blood. (Literally: rope splinters.)
    But the problem with tall ships is they start to rot the second they hit the water, and they don't *ever* stop. You can work your heart out, and it's never enough. The damned things are always on the verge of some dire emergency or other, and no sooner do you get today's problem fixed than the next one smacks you in the face. It just never ends. Which is why they're where 20 year olds go to burn out.
    Those who last, view it as almost a sacred calling. Sort of like the guys who keep the 10EE's rolling. (I can say that: I have one.) Or any of the other antique machinery restoration guys: you do it because it must be done to preserve the thing you love.
    Which is great on a small, individual scale. But when you have a company who's business model is predicated on the line crew having the same messianic sense of mission that the original founders did, you run into problems. And TS's upper management was (in 2010) starting to remind me of how the ships owning foundations sometimes viewed their crews: people who were willing to work themselves to the bone for the ship, and there were always more where they came from.

    Personally, I think they over expanded, in locations that were needlessly expensive, both for rent and buildout, but that's armchair quarterbacking after the game's over, so it's worth exactly zero as anything other than my opinion.

    I'll leave it with one of my favorite memories of teaching for them: the time I had to do a 2 day woodshop safety course for a bunch of deaf Egyptian exchange students from the local college.
    So you've got a bunch of kids who don't speak much English, can't hear me (or worse, the tools) and *do* speak an entirely different sign language than American deaf people do. (AmSign is just that: AMERICAN sign language...)
    Fortunately, they had a translator to get over the language hump, so that wasn't as bad as you'd think, and good *lord* were they paying attention. It was a serious challenge figuring out how to explain how to tell if they were pushing bandsaw or table saw too hard, since so much of how you relate to how those machines are working is based on sound. Which they don't have.
    I finally came up with a system where I'd have them put their hands on the underside of the table, or somewhere else safe on whatever tool, and then I'd do a cut normally, so they could feel the vibrations of 'right', and then I'd tap on the wood a couple of times and proceed to foul it up as hard as I could without breaking something, so they could feel the difference between 'right' and 'WRONG!'. Worked pretty well, actually.
    What's funny is that metalworkers act like deaf people a lot of the time anyway. Anybody who's worked in a heavy shop for very long learns to lip read, whether or not they realize it, and we all have our own informal sign languages for things like "put it here" or "Push that" or whatever. Half the time I didn't need the translator, my own bastard handsigns worked well enough, even if the kids did laugh at them.
    I remember a pair of those kids in particular: one boy whose father had pretty much written him off, since he was deaf, and clearly useless. He was *so* happy to be able to actually build something his father would understand and appreciate. He could go home and prove to his dad that he *could* use the tools. (His father was a carpenter or something as I recall.)
    And a young woman who just *would not* be stopped. She was so focused on learning as much as she could, so she could eventually go home and make a living. Apparently Egypt had some pretty weird laws relating to deaf people (before the revolution. I don't know what it's like now) Like they couldn't own property, for some reason. So she was soaking up as much as she could, while she could.

    So yeah, it wasn't a perfect (or maybe even good) business model, but it did *do* a lot of good, and I'm sorry to see it go.
    Sic Transit.
    Brian

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    Quote Originally Posted by brianweldor View Post
    It seems like this company had as good a chance as any to survive, yet still could not. The egalitarian dream of easy custom diy manufacturing is still a ways off. It's too bad, I was really hoping this kind of thing could thrive. TechShop files bankruptcy
    As many of us have found out over time - it's much easier to get an idea than it is to sell it.

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    many people are bad at math
    .
    math says you need savings to last 6 months but having enough to last a year is better. too many middle age crazy types do basically a type of gambling, gambling investing or running a business is all too common. many are not happy unless they take risks and they are not happy generally when they loose. too often expanding the business to the point their saving are not enough to cover the bad times
    .
    its like a farmer saving enough grain to last years of bad harvests. every so often you get a bad harvest year. and in a lifetime its common to get 3 bad years in a row.
    .
    and like it or not people use bankruptcy as a legal way out of not paying debts in full.
    .
    if you look at senior citizens too often their savings are little to none as they made bad math decisions. too many have a house bigger than they can afford (interest and taxes higher than necessary). and expenses like cable tv, cell phone plans, eating out in restaurants, getting loans and paying interest. math says often people piss at least 1/2 their income away on unnecessary expenses cause they want to live life or enjoy life or what ever lame reason they come up with justifying bad math decisions. even not having enough to send their kids to college.
    .
    compound interest says if you leave $500,000 to your children and at 6% in 20 years its $1,603,567.
    .
    really if you did the math no family in all eternity would have to work (or they can work a job they enjoy at any wages) but if reinvesting at least 1/2 it keeps growing and growing. average person is bad at math. people can be technically smart but make bad practical decisions. by the way there are accountants that specialize in methods to get out of paying taxes to leave money to your children. do nothing and government will take considerable taxes

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    Quote Originally Posted by DMF_TomB View Post
    and like it or not people use bankruptcy as a legal way out of not paying debts in full.
    That is literally the only purpose of bankruptcy. There is no other use for it.

    Quote Originally Posted by DMF_TomB View Post

    really if you did the math no family in all eternity would have to work (or they can work a job they enjoy at any wages) but if reinvesting at least 1/2 it keeps growing and growing. average person is bad at math. people can be technically smart but make bad practical decisions. by the way there are accountants that specialize in methods to get out of paying taxes to leave money to your children. do nothing and government will take considerable taxes
    That couldn't happen. It is impossible to earn interest on investments in any useful way without debtors. The debtors must be making useful stuff to repay the debt, or the "investments" of the creditors is worthless. They can't get their investment back. You can't have everyone on the creditor side. Most of what people make is perishable over the course of a working career. The baker can't make 30 years worth of bread to "save" for their retirement. New bread must be made when the old baker stops. Even cars and building wear out. The only reason old people can stop working, and still obtain the necessities of life, is because someone is still working. If every family had $1 billion USD, and no one worked, that $1 billon USD would be worth as much at $100 monopoly money is worth today. There would be nothing useful to buy with all that cash.

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    I've been a member of three different maker spaces now. 2 out of 3 still exist. Those two are non-profit. They are more of a social club where a couple people actually do real stuff.

    I just continue to buy the tools I joined them to use. Or decide to farm the work out.

    Techshop was by far the most expensive of the three. And the least social.


    Sent from my iPhone using Tapatalk

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    What would a profitable 'version' of a makerspace look like?

    I'm not sure it's possible, but maybe it would:

    Sell material/supplies at retail. (including to general public)

    Have an in house job shop for members. (also general public/businesses)

    Stalls/areas to work on projects for members. Common shop air/common forklift/material handling.

    Offer classes by local pros?

    Some method of not having multiple idiots operate the expensive equipment?

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    It probably doesn't help that in the 10 odd years since TS started (along with other such "spaces") several things have happened.
    1. Half way decent CNC machine tools that are accessible to mere mortals have appeared on the market. Think Tormach.
    2. The "amazing potential" of cheap 3D printers has been revealed as the hype it was. And they've become more accessible and better (kind of a weird conflict) - so more people own them, and fewer people are excited about paying a monthy fee to get access to one.
    3. Seems to me that woodworking equipment has moved forward too - that it's easier to set up the kind of wood shop the tinkerer/inventor/one-shot-project person, etc. needs. (Large compound mitering cross cut saws at tolerable prices, for example...)
    4. Web based marketing and contacts for at least some production processes mean a clever person can draw their part and have it made various places without so much effort. I observe all manner of things that have existed for a long time, but are suddenly accessible because the web makes them so.

    In short, some part of what techshop offered, is now cheaper/easier "at home"....

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    [QUOTE=. by the way there are accountants that specialize in methods to get out of paying taxes to leave money to your children. do nothing and government will take considerable taxes[/QUOTE]

    Estate tax kicks in above 10 million dollars per person, 20 million dollars for a couple. Not a concern for us common folk.


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