The evolving business strategy of a community in the first Chinese makerspace: an interview with Eduardo Alarcon Gallo By prof Avril Accolla, Tongji University

 In Reports

In these almost ten years 创客 chuangke (Chinese for makerspace) have boosted, shrunk, evolved. In 2019 the panorama is capillary diversified throughout the country: the strong policies of incentives actuated by the government starting from 2015 and the great diversity of the cultural and business landscapes in cities of 1st, 2nd, 3rd tier make the “mass entrepreneurship innovation” policy interpreted and implemented differently.

uring several sessions, we have interviewed Eduardo Alarcon Gallo, the communication officer for 新车间Xinchejian[1], on if and how the source of funding and revenues, as well as impact potential on learning and business models, have evolved in this decade.

[1] the first maker-space in China, founded in 2010 by David Li (李大维), Min Lin Hsieh (谢旻琳) and Ricky Ng-Adams (伍思力) in Shanghai, renown to be a true hackerspace with Chinese characteristics.

What is the financial status of XinCheJian?

Xinchejian is a no-profit establishment run by volunteers: it survives cutting down the costs.

What is XinCheJian?

Xinchejian is a makerspace. It is a community. It is a place to learn and experience, a place for STEAM.

XinCheJian also embraces business, it’s a place to cooperate and create, to help to create start-ups, and create win-win connections with schools, universities and companies.

How has the government’s set of incentives following the policy “mass entrepreneurship innovation” supported you?

It has not, until spring 2019. We have been offered several times, but we preferred singular sponsorships from different companies throughout the years to focus on our independent community and activities.

This year, nevertheless, the rent of our historic venue has increased quite considerably, to a point where it was not sustainable for us. We have been offered some other venues for free, but after careful consideration, we considered our location a real value and an asset for our activities and legacy. We believe the strongest element of a makerspace is its community, of both memberships and at large. After all these years our community is here, where we are. Moreover, this neighbourhood, differently from others, has kept its initial population of small vendors, craftsman, industrial workshops, repairmen; we know them, we collaborate: in a way the neighbourhood it’s part of our community at large.

Therefore, in spring 2019 we have applied for government funding to sustain the rent’s cost. We have not participated in other ways to the government policy.

Has the 2015 policy “mass entrepreneurship innovation” changed or influenced your activities? Did you perceive the Bubble[2]?

We did not feel the Bubble, I did not even hear about it. We are not new makers trying to do good. Nobody ever came here and told me “… we do not trust the movement or your space”.

As a maker I know the spaces which are active and thrive both in China and abroad, I am not aware of the details of other situations.

My experience is that it could take a couple of years to establish a healthy community around a space; a sudden growth of 189 beautiful spaces in 6 months may lead to the fact that some could remain empty if they were not established to further collate a community already growing in the area.

How were you funded?

At the beginning we were sponsored by companies which were interested in relating their brand to our community and members, companies like BMW, Frog, DF Robot. From the very first start, we designed and held workshops for the sponsoring companies on themes like DIY, electronics, SW design, and others. These activities provided us with enough income to grow and thrive.

How has the companies’ interest evolved?

Today the interest of the companies has evolved and it is distributed among the offer of the 16 different Maker-spaces now active in Shanghai.

In addition to the workshops and courses on themes like DIY, electronics, SW design, now the companies are asking for an array of different activities: it is more complex, more sophisticated, layered and deeply integrated with companies’ HR culture. For example, alongside hackathons and DIY workshops, we are asked for courses on ideation processes, innovation management, sustainability, design thinking, and activities for team building and family days.

We are developing similarities to a service company.

How are you funded now?

We are funded by the companies which are interested in what our community can offer and our structured and custom-designed services.  We are now leveraging our human resources in our community to allocate them to the project of our client. The most common topics are still related to machinery, hardware and software design, but we are also asked about soft skills. There is now a new project management layer added to the professional service: especially for those companies which, due to the specific project’s size and duration, won’t need to hire an employee, but just outsource with us. We can offer a vast database of people, competences and services. In the free-lancer hour-fee, there is a percentage for Xinchejian to help it continue to be the bridge.

Our community counts hundreds of people as Xinchejian members, thousands as collaborating non-members. We connect and collaborate with individuals, centres and also other communities (like Coderbanker) with a common focus on business.

Can we then refer to it as an organic and synergetic community’s business model?

Yes, sure.

As makerspace, our membership is 100 yuan per month. Being a non-profit based on a community, it is difficult to escalate our model and to run a business sustainably. The management is horizontal, not vertical, so, at times, the decision-making process can be slow or have not a clear and consistent direction. Therefore the makerspace needs to remain a makerspace.

On the other hand, the companies and startups that are born here in Xinxchejian give back a percentage of the revenues of the activities that are related to the space.

Also, as I mentioned, we provide services to companies through our pool of hackers of whom fees we receive a percentage.

Many companies come to Xinxchejian to collaborate with all aspects of our community because they are aware there is a symbiosis and a win-win; the very members act often as a connection to the industrial world. We have built a reliable brand.

From a business model point of view, what is opensource for you?

Opensource is a tool, one of the many. Well managed, it can support gaining a big community in and around the space, but it is hard to monetize. We do not push mandatory opensource, for us, it is one more tool to create and sustain healthy community learning and business models.

From a business model point of view, what is opensource for you?

Opensource is a tool, one of the many. Well managed, it can support gaining a big community in and around the space, but it is hard to monetize. We do not push mandatory opensource, for us, it is one more tool to create and sustain healthy community learning and business models.

Your community: how did you build it and how have you kept it? Can you tell us about its evolution?

I could summarize these years in three main phases.

At the very first beginning, there was a clear separation between staff members and other members. At times there was not much awareness of one another within the two groups and members took the place (Xinchejian) for granted not knowing the existing challenges on economic sustainability and other issues.

In a second phase, the first generation of staff was growing bigger, through interests related to their history in Xinchejian, but outside of it, and there was some detachment.

Through long experience, we have grown into the opinion that to grow and keep a wide and solid community for our place, members’ participation to the various issues occurring was fundamental: it would facilitate stable commitment, spread a sense of responsibility on both staff and regular members, and transparency would bring trust.

Therefore, in this third phase, we have reorganised internal fluxes and added a management take on the activities. We have established several departments: maintenance, external communication, workshops, party committee, open night, finance. Our economic situation is now completely disclosed through a big whiteboard, visible for anyone who enters the space, with detailed incomes and expenses: not being fully aware proved to be a real barrier for our community.

Our choice has been proven to be the right one, now also the staff group has evolved: it comprises also active and committed makers who use the space every day. The heavy users have hence committed also into maintaining the space.

Which is the impact of XinCheJian on business models?

For what concerns the other makerspaces, we are often looked at as a model, for example, our membership is 100yuan/month and the other spaces follow.

For what concerns other businesses, I do not feel we can influence the sector since we are a non-profit.

On the other hand, the companies and startups that are born here are new and innovative: in my opinion, they are influencing the market with new ways and new business models.

–Precious Plastic, for example, is a 100 countries’ business model offering to all teams around the world blueprints and toolkits to create a recycling station. The Shanghai branch was born here and they create and sell mainly activities on recycling awareness, educational with universities and institutions, CSR with companies.

–Tokylab is an edutech STEAM company with the goal to empower anyone to invent and create in 5 minutes with no previous knowledge. It collaborates with companies and institutions. It is a new business, it is softwareless, this allows to major savings on the maintenance and updating.

–Vincihub organizes flight lessons with the helicopter flight simulator that they developed in XinCheJian.

As I mentioned before we also offer a support system for a new way to freelance.

How do you see XinCheJian’s impact?

The impact on society at large I reckon is substantial since the 21st-century skills are DIY. One learns how to learn, create, share, give and take within the community. Achieving your goals within a community enhances your soft skills.

Broadly it has an impact on innovation through products, services and business models.

What would you say is typically Chinese about XinCheJian?

Approximately 40 or 50 % of members and managers are Chinese.

 

Images source: https://www.facebook.com/xinchejian/

———————————————–

[1] the first maker-space in China, founded in 2010 by David Li (李大维), Min Lin Hsieh (谢旻琳) and Ricky Ng-Adams (伍思力) in Shanghai, renown to be a true hackerspace with Chinese characteristics.

[2] From the implementation of the 2015 policy “Mass Entrepreneurship Innovation” China has experienced incredible growth, reaching the biggest number of incubators and makerspaces in the world. The first high-tech business incubator was born in 1987 (in Wuhan, Hubei province), the first makerspace in 2010 (Xinchejian in Shanghai), the second one in 2011 (Chai Huo in Shenzhen), and at the end of 2016 China owned 3.255 incubators and 4.298 makerspaces triggering the creation of 223.000 SMEs. The numbers of the active makerspaces fluctuate considerably between 2015 and 2018: this phenomenon of sudden opening and closing have been referred to as The Bubble.

Recent Posts

Leave a Comment

Start typing and press Enter to search