TechShop’s “Innovation Cathedral” Comes to San Francisco—Serving Craftsmen and Entrepreneurs on the Gold’s Gym Model

12/16/10Follow @wroush

As a Web journalist, I don’t need many tools. Give me a laptop, a smartphone, and an Internet connection, and I’m basically a roving newsroom. But don’t ask me to make anything other than words: in my loft, the closest thing to a power tool is the kitchen blender. To build, say, a robot dog, I’d first have to spend thousands of dollars on design software and metalworking equipment.

Or at least, I would have until this week. Now there’s another option: I could just get a $100-per-month membership at TechShop, a craftsmen’s clubhouse that plans a “soft opening” of its new San Francisco location this weekend. TechShop has almost every conceivable tool at the ready, from design workstations to computer-controlled looms, laser cutters, commercial-grade sewing machines, welding equipment, injection molding machines, an electronics lab, and a full woodworking shop. It’s a DIY enthusiast’s paradise.

Jim Newton

Jim Newton

Founded by Jim Newton, a former science advisor for the Discovery Channel cult favorite Mythbusters, TechShop has grand plans to expand Kinko’s-style to dozens of cities around the United States. But the former San Francisco Chronicle distribution warehouse that TechShop is renovating at 926 Howard Street is the company’s first big venture beyond its Menlo Park, CA, birthplace. (There’s a TechShop partner location in Raleigh-Durham, NC, but it’s not company-owned.) As such, the San Francisco opening a major test of the whole TechShop premise, which is that urban areas are bursting with creative people who want to make and sell stuff, but lack the necessary tools, training, and facilities.

“Our mission is to engage, enable, and empower people to build their dreams,” says TechShop’s CEO, Mark Hatch.

Work Tables at TechShopSF

Work Tables at TechShopSF

That may sound like marketing-speak, but Hatch is as earnest as they come. He’s a business development ninja who once ran the computer services business at Kinko’s and has studied the ideas of sociologists and new-economy gurus like Richard Florida (The Rise of the Creative Class) and Joseph Pine (Mass Customization, The Experience Economy, Authenticity). He’s convinced that Americans have a deep-rooted urge to make things with their hands, and that with the right tools, a significant minority could turn their basement-shop hobbies into real businesses. Which is why he believes that there’s a place in every major city for a fully tricked-out machine shop that functions on the Gold’s Gym model—that is, charging a flat monthly fee in return for unlimited access to TechShop’s space and equipment.

Those membership terms aren’t just an administrative convenience—they’re the cornerstone of the company’s business model and marketing philosophy. At Kinko’s, says Hatch, “the fascinating story that was about the community that developed between 10:00 p.m. and 6:00 a.m.” This was back in the 1990s, when hordes of desktop-publishing professionals and design students would descend on Kinko’s stores every night because they couldn’t afford a $1,000 copy of Quark or Photoshop or their own laser printers. They’d end up helping one another and, in more than a few cases, going into business together. “The problem was that we charged by the hour, so you were incentivized to leave,” says Hatch. “If you want to create a movement to change the world and really help drive innovation and creativity, you need a ‘third place,’ as Starbucks likes to describe itself. [TechShop] is truly a third place for creatives. The all-you-can-eat pricing model encourages you to hang out. You have no idea who you’re going to run into, but I guarantee it’s going to be interesting.”

The 800 people who’ve joined TechShop’s Menlo Park shop, which opened in October 2006, apparently agree. And Hatch’s belief that many makers join TechShop in order to turn their avocations into vocations isn’t just a theory anymore. Real companies like Dodocase, a San Francisco-based maker of premium iPad cases, and Clustered Systems, which makes high-tech cooling systems for data centers, have used TechShop as their launchpad. (There’s more on each of these companies below and in my audio interview with Hatch and Newton—see page 4.)

TechShop machine shop area

TechShop machine shop area

That track record has won the company big fans at places like the Kauffman Foundation, which spends millions each year on the search for better ways to promote entrepreneurship. “Lots of people have great ideas, but many can’t act on them, because they lack the tools, equipment, and knowledge to turn those ideas into marketable products,” says Carl Schramm, the foundation’s president and CEO. “TechShop is a place where idea people can literally build their dreams today, becoming tomorrow’s inventors and entrepreneurs.”

TechShop exists because Jim Newton, a lifelong tinkerer and inventor, wanted a world-class shop for his own projects. “I was on Mythbusters for a year, so I had access to their shops. [Then] I was teaching at the local college, showing people how to make combat robots, and I just taught that class that so I could get access to the machine shop…When I got done with that gig, I didn’t have access to a shop, and I thought about what is it going to take to build my own shop.”

Quilting machine

Quilting machine

Newton could have paid for a full shop by going into the prototype fabrication business, but he didn’t want to work on other people’s projects. That was when he hit on the gym-membership concept. “If you think about this as a health club, it’s exactly the same,” he says. “There are some nuances, like safety and training. But there are no hourly charges for the equipment, with rare exceptions like the 3D printer, where you have to pay for materials, and the water-jet cutter, which costs $1 a minute to cover materials and disposal of the slurry. Everything else, it’s come and use it as much as you want.”

What makes the whole membership concept plausible, according to Hatch, is the last two decades’ revolution in computer-aided design and manufacturing software, which can help users analyze virtual prototypes right down to the level of specific materials. If you’re building an engine and you’re trying to decide whether to use Alcoa aluminum or Nucor aluminum, for example, the newest Autodesk systems “will allow you to model how your engine will perform based on the different melt temperatures,” says Hatch. “The ability to do that on software that I can train you on and have you producing products within weeks is new to the world. Fifteen years ago, you would have needed a $15,000 computer and $10,000 in software and six months of training.”

Over the same 15 years, competition from Japan and China has drastically lowered the prices of the powerful machine tools needed to build actual prototypes. A numerically controlled Tormach milling machine that costs $17,500 today would have cost $250,000 in 1995, Hatch says. “That is a geometric reduction in cost. We are in a space now where, for half a million dollars in hardware, we can deploy a complete TechShop.”

Four years after the company opened in Menlo Park, the operation is running in the black, Hatch says. And that’s mobilized TechShop’s financial backers—mostly individual investors from Silicon Valley who have “a passion for what we’re doing,” according to Hatch—to invest in the San Francisco expansion, which is to be followed in early 2011 by new locations in San Jose, Detroit, and Brooklyn.

Laser cutter

Laser cutter

In Menlo Park, about half of TechShop’s members are engineers in their day jobs, but in San Francisco, the company expects to attract a slightly less technical crowd. “The people [in Menlo Park] range from astrophysicists and rocket scientists to 19-year-old kids doing silkscreen T-shirts and everyone in between,” says Hatch. “We think that coming to San Francisco, we are going to see a lot more artists, professionals, architects, fashion designers, and so forth.” Members tend to be middle class or above—the $100 per month needs to be in their disposable income range. “But the core piece is that they like to make things, and that defies age, occupation, or race descriptions.”

If any TechShop alumni can be called famous, Patrick Buckley and Craig Dalton are among them. Buckley is a serial entrepreneur who co-founded WebMynd, a Y Combinator-backed startup in San Francisco that makes a search sidebar for Web browsers. Dalton had co-founded mobile startups and a sporting goods company called BooCooGear. In early 2010 the pair decided to enter the “Build-A-Business” competition sponsored by Ottawa-based Shopify, a provider of e-commerce storefronts; their idea was to create iPad cases using a mix of high-tech fabrication and traditional book binding techniques.

TechShop members at work

TechShop members at work

Recounts Hatch, “Patrick came in two weeks before the iPad came out, and goes to one of our dream coaches—we don’t call them facilities guys, they help you build your dreams—and he said ‘I want to use bamboo in the case, what classes do I need to take?’” TechShop’s coaches showed Buckley how to use Autodesk design software to design the frames for the iPad cases and computer-controlled woodcutting “shopbots” to cut them. A textiles instructor showed him what materials and glues to use for the cloth cases.

“He made 10 or 15 of them, and put them online, and very smartly sent one to Gawker and one to The Unofficial Apple Weblog, and it was about three weeks from the time he learned how to use the machines to his first orders,” says Hatch. The rest is history: The blog coverage brought in thousands more orders for the $50 cases, Dodocase won Shopify’s $100,000 grand prize, and the company hopes to hit $3 million in revenues in its first year in business, according to media reports.

Clustered Systems is another of TechShop’s breakout success stories. Electrical engineer Phil Hughes and a partner spent about a year inside TechShop building a liquid-cooled server cabinet designed to be 15 to 30 percent more energy-efficient than conventional server cooling systems. “They used our machines to build their cabinet, our powder coater to make it look like it came from China, our vinyl cutter for professional-looking logos,” says Hatch. In December 2009, the company won a $2.8 million grant under the Recovery Act to build a larger demonstration system for the Stanford Linear Accelerator’s computing department, and this October it won a “Chill Off” conducted by Lawrence Berkeley National Laboratory.

“$250 billion was spent last year around the world cooling servers,” says Hatch. “A 30 percent improvement is $80 billion in savings. So these guys, by themselves, on a $2,400 initial investment plus their time and other equipment, may have solved an $80 billion a year problem.”

The 'Innovation Cathedral' area

The 'Innovation Cathedral' area

Dodocase and Clustered Systems have long since graduated to other facilities, since TechShop isn’t set up for large-scale, ongoing production. “If you’re doing more than 1,000 units of something, you’ve probably outgrown our space,” says Hatch. But there are plenty more entrepreneurs coming up behind them. “My guess is that 30 to 40 percent of the members are trying to sell something and will tell you that, and another 20 percent are hopeful but don’t want to admit it, sometimes even to themselves,” says Hatch. “At least, that is our experience in Menlo Park.” The rest of TechShop’s users? They’re “lifelong learners, making gifts for themselves or friends, or doing it for the pure enjoyment.”

At one time, TechShop’s Howard Street building was used to distribute fresh-off-the-press newspapers to delivery trucks, and as a repair shop for broken newsstands. The TechShop opening is part of a larger plan to revitalize the entire superblock, which is bisected by Minna Street and Natoma Alley and dominated by the 1924 San Francisco Chronicle building. The Chronicle’s owner, the Hearst Corporation, is working with real estate management giant Forest City (NYSE: FCE) to turn the area into a “creative cluster” under the rubric 5M, after the intersection of 5th Street and Mission Street. It has already found tenants like the payments startup Square, the gadgets blog GDGT, The Hub co-working space, and the San Francisco School of Digital Filmmaking.

Allen wrenches

Allen wrenches

Hatch says Forest City executives saw TechShop as an ideal “anchor tenant” for this nascent cluster, “like dropping a theater into a strip mall.” If the 5M project never takes off, TechShop “works just fine by itself,” Hatch says. “But it can catalyze a broader effort.”

The ground-level portion of TechShop San Francisco’s 17,000-square-foot facility wasn’t quite finished when I visited last week. But the upper level, a vaulted-ceiling area that Hatch calls the “innovation cathedral,” will play host to a public open house this Saturday, December 18. A real grand opening is planned for January or February, after which Hatch will turn his attention to the San Jose, Detroit, and Brooklyn locations.

Avid makers and TechShop fans may want to listen to my entire hour-long conversation with Hatch and Newton. Click the play button below, or download the MP3 here. The first 12 minutes or so consist of a guided tour of the TechShop facility. For the final minute or two of the recording the conversation is drowned out (appropriately enough) by a power saw.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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