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Bootstrap funding

Date interview: January 1 2016
Name interviewer: Georgina Voss
Name interviewee: [Anonymous]
Position interviewee: Co-founder


Social enterprises Social-technical relations Reputation/legitimacy New Organizing Internal decision-making Inclusiveness ICT tools Experimenting Emergence Business models

This is a CTP of initiative: FabLab 4 (East England)

This CTP refers to the decision made to bootstrap some of the initial funding through £250 pledges, generating income and creating a community. The decision to found the Cambridge Makespace was made by 3 co-founders, 2 of whom were engineering graduates from Cambridge University, and who undertook extensive research as part of the planning process. Two distinct needs were identified in this work – the capacity to develop working capital to support renting a space and buying requisite equipment; and to build a community. The founders built community through meetings, arranged through the Meet-Up platform which allowed them to develop a single mailing list which allowed them to demonstrate a critical mass of numbers to would-be supporters.  

At the end of 2010, the founders ran a large “Let’s make a MakeSpace” meeting, where they gave talks about what they thought the organisation could be, and handed out postcards to attendees. There were two types of postcards – ones which asked what type of help people thought they could offer (“operational, financial, legal, whatever”). The second asked whether participants would be willing donate £250 upfront in order to bring the organisation into being; and was replicated online after the event to allow people to continue to pledge as the organisation was built.   64 people donated - garnering £16,000 - in return for 6 months’ free membership when the organisation was active. The founders kept the cash in hand – “We didn’t execute on [the pledges] until we were ready to go”. This pledge money was substantively less than other rounds of private funding which were generated from grants and local companies. However, it allowed the founders to demonstrate the level of enthusiasm and active interest in the space to future supporters and stakeholders.  

When the organisation finally acquired premises in late 2012, the founder members were invited in to fix the space up, and to discuss about how it would be used:   “It was a community activity, painting it and talking about where we wanted to put things, like whether we’d have workshops or electronics or what. It tied together the practical and the planning”.   After the makespace opened, some of the founder members chose to leave, despite their initial donations, as (it was intuited by the Directors), they didn’t like what the space turned out to be in actuality.

Co-production

This CTP was sparked by the initial research done by the Cambridge Makespace’s Directors in the planning process for the organisation. One of the Directors, S, took a 3 month sabbatical from his job with an engineering company in Cambridge to gather information about how other similar hackspaces, FabLabs, and tech shops operated, visiting sites in both the UK and ‘heritage’ organisations in the US including NYC Resistor and those in San Francisco. Concurrently another Director, J, took 3 month off between finishing his undergraduate degree and starting an engineering job to write an initial round of grant applications to obtain basic income for the space, raising £50,000 from the East of England Development Agency to be put to ‘creating new jobs and new skills’.

In the time between the grant award and payout, the agency closed down, meaning that the Directors received the money more slowly than they would have liked and in ‘interesting ways’.   One of the key learning’s from S’s research was that “community had to come first”. The city where the Makespace was founded was already home to a large number of technology and engineering social groups, across the local universities and industrial sectors. The Directors were able to reach out across these groups to first ascertain if there would be interest in the space; and, once they learnt that there was, pull together this interest into a regular meet-up.  

Whilst no particular events sparked this CTP, the era in which it happened – the UK in the late 2000s – is important.At this time, a sufficient number of hack- and make- organisations had developed such that the Directors were able to gauge how and why they were successful, and which elements and characteristics from each they wanted to adopt:  

“We looked at the full range – it wasn’t just about how they got their money, but also the full cultural flow, from the hackspace end of things to tech shops. FabLabs were more educational, Tech Shops were very polished, and hackspaces were more anarchic”.  

Pulling together a community allowed the Directors to ask potential future members what they would like the space to be. “From that, we came up with the Makerspace – volunteer run, following the Cambridge ethos where we don’t like high gloss, but still more orderly than a hackspace to make it inclusive”. Later events evoked by this CTP included the capacity to raise further funds from local companies, and to demonstrate that there was active interest in the space for future landlords:

“The pledge enabled us to have conversations to say: look, there are hundreds of people who are interested in this, and are will to pay £250 upfront for hypothetical membership of a non-existent space”.

Related events

Events which related to this CTP included the initial research conducted into the DIY tech community, and the specific timing of these decisions in the UK.

Contestation

There was little contestation around this CTP as it was planned collaboratively with potential members, asking for their support as part of the engagement process around how the organisation should be built. Following the opening of the space in late 2012 some original founding members chose to leave who had been “some of the most active voices” in setting up, but this occurred amicably. One of the directors hypothesised that this was because it was felt that the Makespace was too formal:  

“The people who left expected us to be more like the London hackspace, more informal. When we asked them to sign the [compliance?] agreement – it wasn’t fully articulated, but it felt like we weren’t hackspace-y enough. It was more of a cultural fit; we were writing down rules like ‘We’re all going to be decent to each other”, and he [one of the people who left] felt he could be more relaxed in an environment where that wasn’t codified. But it’s hard to work out precisely”.

Anticipation

This CTP was planned as a critical moment from the first, with much careful planning going into it, and intended to lay down a stable path for the development of the organisation over the longer timescale.   In its absence, the organisation would have had some support from additional money – around £10,000 - raised from industrial sponsorship. The co-founders had visited local engineering and technology companies (which included large global corporations) and had what they described as “easy conversations”, describing how these firms had been benefitting from the local STEM infrastructure and recruiting engineers for a long time – “and now it’s time to give back”, contributed to themes including skills outreach and recruiting. Each sponsor had their name inscribed onto the wall of the space. However, being dependent on a smaller amount of initial capital would likely have severely restricted the organisation’s choices about the type of space they could have moved into, the equipment they could buy, and the ability to make longer term plans. The absence of a founder community may also have limited the organisations ability to negotiate with future partners.

Learning

The ability to raise further funding and find workshop space were in part due to this CTP – both through the revenue that it raised, and the capacity to demonstrate active interest in an as-yet unformed organisation:

“It’s easy to say you want something. Everyone wants nice things. You want a puppy – but when it comes down to saying “Do you actually want a puppy?” it’s a bit different”.  

The process of building community and gathering pledges also enabled the Directors to learn who in their community was serious about helping to build the space, both through financial contributions and other means:

“We knew that these people [who pledged] were serious. If they would invest that much money, they would help us do other things too – connect us to other people who would give us money, help us set up and so on”.  

This bootstrapped funding allowed the organisation to fulfil one of its key aims in terms of remaining sustainable, which became important over the longer timeline. The co-founders were mindful that they didn’t want to invest a lot of time and work into the space for no reason – “If we’re putting all this effort in, we don’t want it to then only be open for 18 months and then close down again. Money allowed us to come up with solutions to other problems more easily”. Having a back-up financial reserve allowed the co-founders to make informed and active choices about the types of equipment that they bought, creating greater stability for the future, rather than being reactive and constrained. The space was kitted out with a mixture of used donated equipment, and new machines including some lasercutters and 3D printers. As one of the co-founders described, “We were happy to buy new – we had money in the bank and could get warrantees. We knew we’d be using the space for business, so any kit we bought had to be reliable”.

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