R.I.P. TechShop: Makerspace Closes All U.S. Locations Due to Bankruptcy

On Oct. 30, I received the usual weekly email from TechShop, the makerspace just outside of Detroit in Allen Park, MI, informing me of upcoming events and membership deals. Just two weeks later, an email from TechShop CEO Dan Woods hit my inbox announcing that all 10 wholly owned locations in the U.S. would shut down immediately as a result of Chapter 7 bankruptcy proceedings. So what the heck happened?

In his email, Woods said, “For 16 months, since becoming TechShop’s CEO, we’ve committed to improve profitability while cutting non-critical expenses. We developed and pivoted to a new business model. We worked with creditors and investors to attempt debt restructuring and cultivate sustainable business operations. But our struggle with cash, the oxygen of any business pursuit, has persisted. … I cannot begin to tell you how disappointed and profusely sorry I am to not be able to turn the company around.”

Earlier this year, TechShop unsuccessfully tried to change its business model by licensing its makerspaces to other entities, such as universities or nonprofits. According to Forbes, poor management, a lack of vision, and pricey real estate–it opened a brand new Brooklyn location just two weeks before the closure announcement—contributed to TechShop’s demise.

Based in the Bay Area with locations across the world, TechShop was founded in 2006 and was a DIY paradise containing a tinkerer’s smorgasbord of machines, tools, and software. The Allen Park location was particularly sophisticated, with 3D printers, laser cutters, industrial-grade sewing and textile equipment, mills, lathes, saws, shopbots, an injection molder, a computer lab, a room for large projects big enough for a hovercraft, an auditorium, and even a “dirty room” for sandblasting.

TechShop’s mission was to give everyone from pre-teen hobbyists to garage-workshop inventors to seasoned engineers a pleasant, affordable space in which to bring their homegrown creations to life. The $1.8 million Allen Park facility was established in partnership with Ford, with free and discounted memberships offered to Ford employees, and an associated nonprofit provided all members with help commercializing their inventions. Anecdotally, the space was beloved by the local maker community. Perhaps most heartbreaking is the fact that TechShop’s closure will leave a lot of born-in-the-basement entrepreneurs and small-business owners that used its fabrication tools hanging right as holiday shopping season ramps up.

At the time the Allen Park location opened in 2011, former CEO Mark Hatch told Xconomy that Detroit needed TechShop. “That’s abundantly clear by the number of hacker spaces popping up, almost more than any other city,” he said. “Detroit has an innate desire to do it yourself, not to mention thousands of engineers. It’s the right place at the right time.”

TechShop has advised members to seek any refunds owed through the attorneys handling the bankruptcy. In the meantime, there are several other makerspaces in Southeast Michigan, including i3 Detroit, Village Workshop, All Hands Active, and Maker Works. According to totally unsubstantiated chatter the Detroit subreddit—Ford has so far declined our request for comment—the automaker recently opened a makerspace for employees at its Production Development Center. It’s unclear if Ford was still in partnership with TechShop at the time of closure, and whether it has an ownership stake in the Allen Park facility. We’ll update the story if we get a response.

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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