Nov. 5 (Bloomberg) -- Mark Hatch is convinced that aspiring entrepreneurs and inventors will pay for the shop class of their dreams. He’s chief executive officer of TechShop, a Menlo Park, Calif., company that offers members access to workshops that make most tinkerers’ garages look like kindergarten classrooms.
Founded by Jim Newton, an inventor, robot enthusiast, and onetime science adviser to the Discovery Channel’s MythBusters series, the company operates TechShops in Menlo Park and Raleigh, N.C. (A third location in Beaverton, Ore., closed because it was not profitable.) Hatch, 50, says the company is in the process of raising its first round of venture capital, had $700,000 in revenue in 2009, projects $1.1 million this year, and plans to open in dozens of American cities in the next two years. He spoke recently with Bloomberg.com’s John Tozzi about the growing tribe of do-it-yourself types that he’s betting on to realize TechShop’s national ambitions. Edited excerpts of their conversation follow.
John Tozzi: How did TechShop get started?
Mark Hatch: Jim Newton founded it in October 2006 primarily for himself. He wanted access to a wider range of tools so he created this membership-based model that would enable him to make his own things while giving other people access to the tools as well.
Q: What do members get for their $125 a month?
A: We have every machine tool, woodworking tool, 3D printers, digital prototyping software, laser cutters, a full sheet-metal shop, an automotive bay, a textiles lab, a plastics lab. It’s literally everything you need to make anything. We have a guy making a lunar lander on-site. And we have people who are silk-screening T-shirts and making stuffed animals.
Q: What’s the business model?
A: It’s a membership-based, do-it-yourself fabrication workshop. The primary revenue driver is from memberships, like a gymnasium. We teach a lot of classes. It’s a great mix. It’s a cross between a gymnasium, an educational institution, and an incubator, all founded on the principal of open access, so anybody can join, anybody can play, anybody can learn. We do some short-run manufacturing, a little bit of retail, and then we offer studios for startups.
Q: Do entrepreneurs use TechShop to start companies?
A: That’s probably the most encouraging component. A couple of electrical engineers created this liquid-cooled server cabinet. The company, Clustered Systems, just beat IBM and others [efficiency-wise] by a solid 15 percent at an industry event. Two engineers, [investing] $20,000 over two years. They picked up a $3 million Department of Energy grant. There’s not a dime of VC funding in it; it’s completely controlled by the inventors.
Q: TechShop has locations in Menlo Park, Calif., and Raleigh, N.C. What are your plans for expansion?
A: We’re about to open [in] San Francisco. We’ve got nine cities on the docket for next year: San Jose, Detroit, and New York; we’re also targeting Boston and Washington, D.C., Chicago, Seattle, Portland, Ore., and L.A. We’re hoping to do 20 the following year and plan to have a television show by the fall of 2012. I expect to be profitable in the second quarter of next year.
Q: What’s driving the growth?
A: We’ve graduated more mechanical engineers than software engineers last year. Then you’ve got the Science Channel, the Discovery Channel, National Geographic, all of those pumping our living rooms full of all this interesting science stuff. All of that combined with the new economic reality of reduced consumption and more DIY. You’ve got this whole environment that this is popping into.
Q: What makes TechShop possible? A lot of the equipment is high-tech but a lot of this is stuff that’s been around in some form or another for a long time.
A: Since the beginning of the Industrial Revolution, when the steam engine was hooked up to mills and lathes, the capital tools moved out of the shed of the common tradesperson and into corporations. There they stayed literally for 240 years. What’s happened in the last 20 years is the cost of those tools has dropped dramatically. Twenty years ago a quality, entry-level CNC [computer numerical controlled] machine was a quarter million [dollars] and up. A decent one was probably half a million to 1 million dollars. I can get a good one for less than $20,000 today. The magic that we’re providing is access to the most powerful tools of innovation and creativity for the cost of a daily Starbucks cup of coffee.
Q: Do you have projects you’re working on in TechShop?
A: The most recent fun one: I dragged my kids up there and we did some sumo robots. They’re these little desktop robots that push one another out of a ring.
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