How to Make More Manufacturers
A Special Report by Adam Bluestein and Amy Barrett
Plenty of Americans have the desire to make actual stuff, not just software. What they lack are the tools. We should help them.
Karastix, a maker of bamboo knitting supplies.
At the age of 53, after years of working as a developer for a large software firm, Karen Snyders was ready to be her own boss. Her idea was to create a product she had long coveted but been unable to locate: beautifully crafted knitting supplies made from sustainable bamboo. Snyders sensed her designs would be a hit. The question was where to find the equipment and tools needed to bring them to life. She wound up at TechShop in Menlo Park, California.
Founded by Jim Newton four years ago as a kind of playground in which do-it-yourself geeks and hobbyists could mess around with cool machine tools, TechShop has become a de facto incubator for an astounding array of start-ups. Cash-strapped inventors have used the shop's lathes, laser cutters, welding equipment, 3-D printers, and shop tools to make prototypes for projects that include green computer-cooling and drip-irrigation systems, technical scuba gear, and low-cost infant warmers for developing countries. "Previously, the funding needed for serious tools was an enormous impediment to innovation," says TechShop's CEO, Mark Hatch, a former Kinko's executive. "Advances in computer-aided manufacturing software and an 80 percent drop in the price of machine tools over the past two decades have completely changed the economics of starting up in the hardware space."
TechShop members pay just $100 a month. That was well within Snyders's budget. She took a class on how to use TechShop's laser cutter and developed some prototypes, and she now has her own business, Karatstix. "TechShop was really key to me doing this," Snyders says. "If I had seen the machine and how much it was without using and testing it, I just would have given up."
TechShop has 650 members in Menlo Park; 150 at a second location in Raleigh, North Carolina; and 300 signed up for a San Francisco branch scheduled to open this summer. A San Jose, California, shop will open this fall, and TechShop is considering teaming up with co-working group The Hub and commercial developer Forest City to build clusters of entrepreneurs and artists in Boston, New York City, Los Angeles, and Washington, D.C. The U.S. Department of Commerce has approached the company about opening branches in Detroit and other economically distressed cities.
Shared spaces like TechShop's can fuel the creation of all kinds of companies. In San Francisco's largely Hispanic Mission District, for example, a nonprofit called La Cocina is helping would-be food entrepreneurs make the jump from home-based businesses to true commercial enterprises. In the five years it has been operating, La Cocina has worked with about 100 clients, 90 percent of them women, all low income by the standards of the U.S. Department of Housing and Urban Development.
La Cocina clients go through a rigorous application process before starting a six-month preincubation period, during which they work on marketing, product, and operations issues and carefully study the feasibility of their proposed businesses. After that, the focus shifts to finding financing -- most businesses need less than $2,000 to start up, says the program's executive director, Caleb Zigas -- and getting access to markets. Clients also get access to a commercial kitchen at below-market rates.
"I would be in a completely different place if not for La Cocina," says Jill Litwin. A graphic artist transplanted from the East Coast, Litwin was La Cocina's first client when she came in with the idea for Peas of Mind, a line of healthy frozen kids' food. The program helped connect her with legal assistance, a food scientist, and eventually a factory to expand production. Litwin now has two employees, and Peas of Mind products can be found in supermarkets nationwide. Last year, the company closed a round of equity financing to help it expand again.
Bottom Line Plenty of Americans have the desire to make actual stuff, not just software. What they lack are the tools.