made by report - Bitly

MADE February 7, 2017

B Y

REPO RT

Tour of Memphis College of Art

CONTENTS INTRODUCTION

05

CONTEXT-SETTING

13

FINDINGS

21

WHAT'S NEXT

50

APPENDIX

53

2

“ One of my chief priorities as your Mayor has been to increase the growth of minority and women-owned businesses, many of which are included in our city’s maker economy. I will do everything in my power to make sure this industry continues to thrive in Memphis." Mayor Jim Strickland

Mayor Jim Strickland Signs the Maker Cities Pledge, Memphis City Hall 6.22.16

3

Welcome Letter Furniture makers to chocolatiers. Fashion designers to machine shops. Makers are an important part of the Memphis economy because they embody the city’s spirit of Grit & Grind. These creative entrepreneurs make a cultural impact and contribute to the city’s economic bottom line. They make high-quality goods that are produced in small batches and shipped around the world. The Made By project is a first-of-it’s-kind effort to understand who is making in Memphis and what they make. The findings in this report highlight motivations, business opportunities and challenges faced by makers. I believe that entrepreneurship-based economic development is essential to support the significant entrepreneurial base in all neighborhoods across Memphis. I believe it is important to place the same emphasis on new company development, capital and talent attraction, and entrepreneurship education as it applies to technology-based enterprises. I applaud efforts to create entrepreneurial training programs, financial literacy, banking readiness and support for minority business.

Meet Your Maker Happy Hour & Survey Launch at City & State June 17

Maker City Pledge & Roundtable Maker Fair at City Hall June 21 Community Collaborator Outreach July 5 – August 9 In-Depth Maker Interviews August

Mayor Jim Strickland City of Memphis

Manufacturing Day "Makers in the City" Panel at Advance Memphis October 1

Made By Project Team

introduction

Etsy Maker City Summit, Brooklyn NY May 11 – 13

White House Maker Faire, Washington D.C. June 20

I am committed to growing the maker movement in Memphis, especially minority and womenowned businesses. The City of Memphis supports small businesses, from financial readiness to permitting and procurement. In June, I signed the Maker Cities Challenge, pledging my support for the maker movement. In December, Memphis was recognized as an Etsy Maker City. I strongly believe the recommendations in this report assist in creating a roadmap for growing a thriving creative economy in Memphis.

PROJECT LEAD Little Bird Innovation is a Memphis-based research, strategy and design firm focused on projects that drive economic development, social impact and civic innovation. We collaborate with others to tackle challenges that inspire us. From developing plans to support food entrepreneurship amongst immigrants and refugees to helping the Memphis public library system redefine its value and role in the lives of its residents, we bring a people-centered approach to solving complex problems.

PROJECT MILESTONES 2 0 1 6 Project Kickoff April

Maker Appreciation Party & Early Research Shareout at the Century House December 1 IMPLEMENTATION PARTNER The Entrepreneurship-Powered Innovation Center (EPIcenter) is a collaborative and community-wide strategic initiative that is helping entrepreneurs conceive, launch and scale businesses in the Memphis region. EPIcenter serves as a central point of contact for the regions ecosystem and coordinates resources from various organizations in the community, such as accelerators, incubators, mentors, investors, networking programs and technical assistance programs for entrepreneurs.

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findings

2 0 1 7 Made By Summit February 7 Co-Creation March Final Plan May

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Finally, makers are important members of the sought-after creative class, which is composed of knowledge workers, artists, designers, entertainers and professionals in education, healthcare, and law. Cities across the U.S. are competing for their share of this creative class because of the positive economic and cultural contributions they make to their communities. Makers are a vital part of this equation because their presence and products attract and retain other members of the creative class. Those making as a "side hustle" also sometimes work in other creative class professions — a lawyer crafting artisanal caramels, a marketing director designing vintage-style watches — their making serving as an important outlet for their creative expression. Memphis Coloring Book by Sarah at Signet Sealed

Executive Summary Memphis is known for launching cuttingedge services, such as FedEx, Holiday Inn, Piggly Wiggly and Autozone. Our location and multi-modal distribution network are unparalleled. Though product manufacturing exists in Memphis, it is usually for large entities headquartered elsewhere and is in part due to our global distribution capabilities. The making of products, especially by those doing so at a small-scale, is not part of our city’s core narrative. Product design and production is not presently a core competency; aspiring entrepreneurs face significant ecosystem and infrastructure gaps. Yet despite these challenges, a strong contingent of artisans, makers and micro-manufacturers (makers) are forging ahead. Through the products they make, they are crafting a key part of our city’s identity. In a sea of mass production and big box stores, makers along with their locally-owned retail counterparts, create that which is unique to Memphis. A town that celebrates "Grit & Grind" must also realize the importance of its maker community, for makers are the very embodiment of this phrase. They demonstrate their grit as determined problem-solvers that stick with a challenge ­— sometimes for months — until figuring it out. As entrepreneurs, they grind, working long hours around full-time jobs,

introduction

perfecting and producing their designs and then lugging products to markets, shows and stores to get themselves out there. Makers are resourceful and self-reliant, accomplishing an astonishing amount with very little money. They figure out how to fix broken equipment or how to adapt it to meet new needs. They also often have applied knowledge of science and math, as many crafts require formulas and fractions. Makers possess skill sets and attributes that are valuable to Memphis beyond the products they create. Makers tend to be community activists, believing strongly in the potential of their neighborhoods and neighbors. Their attention to form, function and aesthetic make them worthwhile contributors to any community development initiative. Many aspire to provide living wage jobs and to serve as a role model to others. Others wish to share their knowledge through teaching and apprenticeships. There is significant unrealized potential for Memphis from within our maker community.

This report is an immersion into the world of Memphis-area makers — their products, aspirations, skills, challenges and barriers — as well as a critical look at the larger system in which they operate. This deep dive lays the groundwork for co-developing a plan that supports growing the diversity, size and success of our maker enterprises. The final strategic plan will be released Summer 2017. It will include recommendations for stakeholders based on collaborative roadmapping and planning with makers and stakeholders. We invite anyone interested in better understanding and supporting makers to engage with this document and the project. Help us foster more vibrant and thriving maker communities in our region and elsewhere.

MADE BY OBJECTIVES: Growing artisan businesses

Increasing demand for skilled jobs Raising craft skill and business acumen Increasing product variety and quality

" Locally-grown maker enterprises are expanding beyond their artisanal and hobbyist roots to create true business value." Brookings Institute

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Key Findings Education and previous experience affect how makers approach their business, their aspirations and growth potential. Makers with an art background craft beautiful products but often lack knowledge or confidence in business matters. Many view the business as a means to pursuing their craft. Those with a business education or experience view the craft as a means to creating a viable business. Makers are figuring it out as they go versus using a business plan to guide their decisions. A strong vision creates a path for sustained growth and business investment and guides short- and long-term planning. A maker’s time is governed by sourcing, logistics, production and distribution, making them more likely to be focused on “making it through” the next deadline versus planning for the month, year or next few years. Many makers are in a ‘make it work’ mindset and avoid taking on risk. Monetary constraints and uncertainty about future plans lead many makers to avoid placing big bets. Those with a big vision, strong support networks and access to capital perfect not only their craft but how to exponentially grow their business. Success means balancing multiple sales channels and generating revenue inside and outside of Memphis. Many makers use trial and error to find the right fit, and many are growing sales opportunistically rather than strategically. This trial-and-error approach means that many makers often burn their time and energy on sales channels that don’t merit solid return. Many makers use their online presence to build their brand. E-commerce is not a significant sales channel currently because it requires skills in search engine optimization (SEO) and social media marketing. Significant opportunity exists to cultivate stronger sales channel options and to grow consumer awareness of locally-made

introduction

products. Many channel types exist, but some lack curation while others lack depth of options. The lack of an overarching brand and strong messaging is a large missed opportunity to connect with Memphians’ desire to support homegrown enterprises. Acquiring capital is a challenge for makers growing their business. Many loan programs exist, but most are not securing capital due to application requirements, their risk profile or their readiness to navigate the process. Grant opportunities largely exclude those creating functional art. A small percentage of businesssavvy makers attract investors; this is typically limited to those with a big vision and plans for national or global scale.

Makers without access to costly tools and equipment face high barriers to entry. This is especially true for recent graduates who cannot afford to purchase what they had access to in school. Memphis lacks density in makerspaces, which typically provide access to shared tools and equipment as part of membership.

Completely handmade production is not scalable for most makers. For some, being handcrafted is part of their brand identity and they strive to scale their production in a way that seems authentic to them. This may or may not include adding new equipment to gain efficiencies and lower costs. Those investing in space, equipment and employees need expertise and capital to smartly and successfully add capacity. Few local options exist for small batch contract manufacturing. Outsourcing production is an option some makers explore to significantly grow operations without investing in infrastructure. It frees up time to focus on perfecting new product designs and sometimes even results in quality improvements. The region has few on-roads for small-batch production as most manufacturers have large order minimums. Makers lack local suppliers for critical raw materials. They are paying shipping or driving long distances for supplies, which increases supply cost and sends money out of the local economy. Lack of options also constrains product design. Specialty woods, clay, high-quality fabrics, specialty fasteners and electronic components are just a few examples.

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Makers struggle to find a space that meets their needs. Memphis has no shortage of space, especially in large old warehouses that makers covet; however, little is move-in ready for multitenant occupancy. Established makers looking to expand struggle to access something affordable that fits their needs. They have outgrown the few small studio spaces available, but are nowhere near large enough to fill a warehouse.

Educational institutions don't have a clear career path for aspiring makers. Fine art programs guide students to develop skilled creative expression, while technical colleges educate students to close industry-driven skill gaps. Neither prepare graduates to start and run a business. Business programs teach entrepreneurship, but not a craft. No program locally combines both craft and business education. Classes and workshops are not meeting maker needs to advance their skills. There is demand and need for classes teaching advanced craft skills and product design, as well as entrepreneurship classes tailored for creative and product-based businesses. The Memphis-area maker community is fragmented and more social than actionoriented. Makers rely on a network built through social affiliation, which limits their awareness of the broader community and their ability to connect with people who can help get things done. The absence of an extremely connected, hyper-aware maker community makes it hard to: pool resources, collaborate, innovate, elevate craft and be held accountable to goals. In addition, no one is actively advocating on behalf of makers and their needs.

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Memphis Maker Fair, City Hall 6.22.16

Overview Artisans, makers and crafts-people belong to a 21st-century movement that is creating economic change. They make up a growing share of people working in non-traditional areas who are skilled problem-solvers and adopters often leveraging new technology to advance their craft. As microentrepreneurs, they represent an opportunity to reinvigorate the Memphis economy in a new direction. As artisans, they enrich our cultural identity across the city. This interim report summarizes research and analysis findings through the first nine months of the project. We sought to understand the journeys, aspirations, challenges and lives of Memphis-area makers in order to develop a strategic plan that grows this important sector of our economy. This report is divided into three main sections: Context-Setting • Approach to framing the problem • Research methodology • Survey and interview data collection

Findings • Characterize who makers are and what they make • Report the maker journey, mindsets and skills • Portray the maker ecosystem • Depict the maker landscape today and tomorrow • Frame the fundamentals to building a business

Next Steps • Outline process for developing strategic plan and road map • Share concept evaluation criteria and initial design considerations

Makers describe Memphis as a creative, low cost living city, making it a great place to start a business. That said, they lack access to move-in ready "next level" spaces, shared tools, a skilled workforce and easy-to-navigate business and government services. Taken together, this lack of access produces big obstacles to overcome. "Our most successful artisans work incredibly hard, but are often helped enormously by privilege. They come from a household where parents went to work everyday, managed a household budget, read to them at night, encouraged participation in crafts, expected a college education and generally birthed them into a network not readily accessible to artisans from impoverished communities. How do we create a more equitable playing field?" pat brown, t clifton gallery

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C O N T E X T- S E T T I N G

Etsy Representative Touring Paper & Clay's Studio 12.2.16

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Memphis Maker Fair, City Hall 6.22.16

About the Made By Project EARLY BEGINNINGS

Made By is a first-of-its-kind initiative to deeply understand the lives of makers, artisans and micro-manufacturers in the city of Memphis and Shelby County and to assess their economic impact. The end result of the project is an economic development plan that fosters a vibrant, thriving and inclusive community of makers, artisans and micro-manufacturers across the region. In this report, we refer to all of these individuals as “makers” and define them as individuals using skill or craft to create a physical good at small scale to sell. We sought to understand makers across a variety of factors:

We also focused on populations typically under-represented by efforts in this space: minorities and older makers. The population of Shelby County is 42% white and 54% African American; as such, we would expect sizable participation in maker businesses by African Americans. We also know from our research that many retirement-age Americans are

introduction

starting maker businesses as second careers or possess master-level skills they can teach others. These factors drove our interest in understanding the older maker demographic. The city of Memphis struggles with a 26% poverty rate. Supporting entrepreneurship as it relates to poverty reduction is a specific passion of both Little Bird Innovation and the Made By project’s implementation partner, EPIcenter. We envision the Made By project as one way of fostering place-based businesses that contribute economically and culturally to our neighborhoods.

PROJECT OUTCOMES

Now that Made By has a rich understanding of the hurdles, barriers, support systems and success pathways for makers, we can co-create a plan to advance the Memphis maker movement. We are broadly sharing our learnings with a wide group of partners in an effort to implement strong, viable support systems and services for makers. In 2017, Made By will produce a development plan whose implementation will be led by EPIcenter and supported by Made By Advisory Board members and other institutions. Implementation will entail closing gaps in the network by creating and coordinating programs, offerings and infrastructure to

context

findings

support maker businesses and to prepare those who want to scale to meet the demand for handcrafted and small-batch products. This development plan is a significant part of EPIcenter’s neighborhood-based entrepreneurship strategy because of the economic impact aim of this initiative.

Over the medium-to-long term, a development plan for makers will grow the greater Memphis economy in new and previously uncultivated areas. We expect increases in: Number of maker enterprises, especially by women and minorities Diversity and quality standard of products Number of micro-entrepreneurs scaling to small and medium-sized businesses Need to hire additional skilled workers Brand perception of Memphis for making and creative enterprises

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" The MadeBy project seeks to engage the creative class, and rather than us saying, ‘this is what we think you need to do to be successful,’ it will identify things like what the gaps are in the current environment." Leslie Lynn Smith, EPIcenter Memphis

Advisory Board Meeting 7.19.16

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Advisory Board Made By is guided by an Advisory Board composed of a diverse set of stakeholders across a variety of related fields. The board meets regularly to review progress to-date, provide additional knowledge and perspective and prioritize key learnings as we move forward into solution development. Advisory Board members are essential partners in shaping and leading new programs and offerings.

TOOTSIE BELL SILVERSMITH & JEWELRY

PAT BROWN

T CLIFTON GALLERY

RUSS FLEMING

FEDEX SERVICES

BRIT MCDANIEL PAPER & CLAY

SARAH BLACKBURN

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SOUTHWEST

CITY OF MEMPHIS

COMMUNITIES

FUNLOLA COKER

FUNLOLA'S WORKSHOP

MICHAEL O'ROURKE

KONG WEE PANG

GENE SAXON

PHILLIP ASHLEY

MEMPHIS COLLEGE OF ART

TERRY LYNN

EPICENTER

UNLIMITED

CARRIE ALLISON BROOKS

NATE GARRETT TCAT MEMPHIS

CYNTHIA NORWOOD

CHOCOLATES

DEVELOPMENT CENTER

TENNESSEE CRAFT

MARIA FUHRMANN

WEEK

TN SMALL BUSINESS

PAT CHAFFEE

EKATA DESIGNS

PHILLIP RIX

RORY THOMAS

PINNACLE BANK

SARAH BRUBAKER

ABBY PHILLIPS

MEMPHIS FASHION

JOY BOWEN

ARTS MEMPHIS

LOEB PARTNERS

FINE ARTIST

TAROPOP

TONYA TATE

MODERN HANDMADE MEMPHIS

LISA TORO

CITY & STATE

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Approach

Methodology

Little Bird Innovation uses a human-centered, collaborative and co-creative process on all projects. This approach applies not just to our research but also to our work in translating learnings from research into actionable strategies, solutions and plans.

In seeking to understand the aspirations, needs and challenges of makers, we conducted research and collected data from primary and secondary sources to describe the maker landscape.

PROCESS

In seeking to understand large, complex issues, we build a body of knowledge and understanding through learning from the experiences and stories of real people living and working within the context of the group for whom we are designing solutions. In the case of Made By, this group is makers. We invested more than 270 hours learning from makers through in-depth qualitative interviews, paired with a large-scale survey. We used this hybrid approach to marry stories with statistics to strengthen the case for supporting economic development driven by makers and micro-manufacturers. This intensive approach is an investment in Memphis' creative community and its potential. Makers and stakeholders working in adjacent industries collaborated on all key activities and will continue to do so as we develop possible solutions for unmet needs and the barriers that makers face. This is the meaning of human-centered, collaborative design work — involving makers and stakeholders at every step of the way to ensure that what is created truly meets their needs.

Research activities included: • Reviewing literature • Benchmarking • Surveying makers • Interviewing (in-depth) makers • Conducting topic-specific research roundtables • Creating an ecosystem map • Interviewing experts • Immersions • Observing festivals and maker events The following sections discuss a few of our research activities — the online maker survey, indepth maker interviews and ecosystem mapping — as these activities made up the majority of our research and are what differentiate Little Bird’s human-centered approach from others. Please see the Appendix for more details.

DATA SOURCES

SURVEY

The project reached out to more than 500 makers, artisans, & micro-manufacturers during the survey period of June 17 – August 7, 2016. 315 surveys were completed in English and Spanish using an online survey platform. Makers were contacted and invited to take part in the survey via email, social media, and Made By events. A team of community collaborators (makers) also contacted respondents using social networks and survey parties. For the purposes of this project, makers were defined as someone living or working in Shelby County, TN who creates a physical good by hand in small batches. 256 survey responses were analyzed using this definition. See the "Who Are Makers" section for respondent demographics.

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In-Depth Interviews

We combined the survey with 32 in-depth interviews. Each ranged from three to four hours and was conducted, whenever possible, where the maker does his or her work. This context is crucial, as it allows us to observe and understand the making process, workarounds and how the making environment and location affect everything else. In some cases, the maker’s studio is in their home and they are constantly balancing their small business with their personal life. Observing this and situations like it yields a much richer set of data and understanding of motivations and trade-offs.

C L AU D I O

DARIN

LORENZO

SECTION8GEEK

IDT TECHNOLOGIES

L.S. DESIGNS, LLC.

PRETECKT

3D-printed objects

Dental prosthetics

Metal fabrication & welding

Predictive analytical device for

BARTLETT

MIDTOWN

WHITEHAVEN

PET ER

DOWNTOWN MEMPHIS fleet vehicles

A N TO N

TERANCE

TREY

W ILLI S

TAYLOR + MACK

TERANCE BROWN

P-5 ONE

Y&W TECHNOLOGIES

Furniture from reclaimed

Sculpture, coding &

Machined OEM parts

Metal finishing

materials

3D printing

BRIAN

BRIT

ELYSE

JOH N

DOWNTOWN MEMPHIS

COOPER-YOUNG

OAKLAND

AIRPORT

BRIAN Russell STUDIO

PAPER & CLAY

PRIM SOCIETY

HIS AND HEARSE

Metal & glass sculpture

Functional modern ceramics

Modern baby goods & decor

Custom wood furniture

ARLINGTON

DOWNTOWN MEMPHIS

DOWNTOWN MEMPHIS

BINGHAMPTON

KIMELI

LIS A

RENEE

SARA H

GIFTS FROM NATURE

LATHA BAR

SUNDRY BLOSSOMS

SIGNET SEALED ILLUSTRATION

Natural soap, bath bombs & scrubs

Soap, bath bombs & candles

Leatherbound journals & accessories

Hand illustrated prints, mugs

BINGHAMPTON

MILLINGTON

COOPER-YOUNG

inspired by beverages

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DOWNTOWN MEMPHIS & blankets

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Interviews explored the making process, how they arrived at their current product(s), financial and emotional highs and lows, milestones, challenges and barriers, sourcing and networks. We intentionally recruited for inclusivity across a number of factors, such as hobbyist vs part-time vs full-time, time in business, craft type, ethnicity, gender and neighborhood.

INTERVIEW PARTICIPANTS

AMARINA

ATOOS IE

BRITTNEY

URSA MAJOR+

ATOOSIE WALTER

DON'T BLINK

MBABAZI HOUSE OF STYLE

Upcycled vintage plus-size clothing

Cotton & denim clothing

Leather wallets & accessories

Modern women's clothing with

CORDOVA

NORTH MEMPHIS

MIDTOWN

for women

K AT H L E E N

GRA C E

BINGHAMPTON

traditional Ugandan fabric

LUZ

SARAH

TOOT SI E

STELLAWARE

SUMAQ SAIRI

EKATA DESIGNS

TOOTSIE BELL SILVERSMITH

Fashion for dogs & cats

Jewelry made with fruit

Jewelry made with precious

EAST MEMPHIS 

peels & seeds

stones, copper & brass

Silver jewelry & repair

TRAMICA

ANGEL

CASSI

DAN I EL

MO'S BOWS

REPLENISH KOMBUCHA

PINK DIVA CUPCAKERY

MAYWEATHER FOODS

Men's bowties & neckties

Kombucha & cold-pressed juice

Vegan cupcakes & food

Sweet & savory rolls, breadings

COOPER-YOUNG

ORANGE MOUND

EDWIN'S CIRCLE 

BINGHAMPTON

BARTLETT

SOULSVILLE

AND JEWELRY

SOULSVILLE

& seasonings

J E R R OD

LAUREN

PAMELA

PHILLI P

SHOTWELL CANDIES

SWEET LA LA'S

MAKEDA'S COOKIES

PHILLIP ASHLEY CHOCOLATES

Handmade candies,

Homemade cookies; at-risk

Homemade butter cookies & pies

Designer chocolates

caramels & toffees

youth employment program

RALEIGH/BARTLETT

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SOUTH MEMPHIS

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COOPER-YOUNG

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F I N D I N G S " New artisanal manufacturing companies take advantage of changing consumer dynamics and developing technologies in order to create value in the market, achieve long-term sustainability and build the capacity to grow in aggregate to a scale significant enough to become a meaningful source of 21st century production jobs." Randy Komisar, Kleiner Perkins Caufield & Byers, Forbes Magazine

Suga Honey Iced Tea Soap by Lisa at Latha Bar

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Made By Meet Your Maker Event and Survey Launch at City & State on Broad Avenue 6.17.16

Who Are Makers An artisan is a highly skilled worker who creates things by hand that are functional or decorative. A crafts person is someone skilled in a manual craft. A micro-entrepreneur is someone running a small business with nine or fewer employees that capitalizes on their own skillset. The term "maker" was coined in a 1961 Chevrolet ad, stating “makers build for use and for fun.” Maker refers to anyone who creates and refers to people creating small-batch products in all sectors. The Made By project sought to understand the aspirations and needs of those handcrafting and selling physical products in Shelby County. Made By calls these individuals makers; however, they go by many other names, as well. Artisan, potter, jeweler, craftsperson, chef, brewer, roaster, designer, blacksmith, machinist, fabricator, technologist, wood turner, sculptor, soaper and entrepreneur are a few common labels. Claudio and Willis represent two ends of the maker spectrum in Memphis. Claudio runs a commercial 3D-printing service. He is also very active in running Mid-South Makers, a community makerspace of like-minded people whose mission is to unite makers, builders, hackers and artists. His leadership ensures hobbyists have access to the space, tools and materials for do-it-yourself (DIY) making in a non-commercial setting. Willis Yates’ Y&W Technologies provides metal plating of medical

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instruments with high-quality materials. His customers, on the other hand, include medical device OEMs such as Smith & Nephew and Medtronic. Willis is committed to developing the workforce in Memphis. For the past nine years, Y&W held several apprenticeships attracting young people to jobs in the medical device industry. We believe makers’ goals, motivations and visions of success may change throughout their journeys, but they realize it’s important to think about why they started, where they’re going and how they’ll get there. Describing makers as a community can be challenging due to variation across craft skills, business acumen and sector. Results from the Made By survey (June—August 2016) begin to describe the Memphis maker community. More makers are part-time (57%) than full-time (43%) and run their businesses by themselves (68%). Handcrafted product sales accounted for a small portion of the household bottom line. 76% of makers reported sales of $15,000 or less. Makers reported average revenue of $40,161 and average expenses of $22,794. Micro-entrepreneurs purchase more materials and supplies within Shelby County (56%) than outside of the county. Most micro-entrepreneurs are extremely bullish on making in Memphis; 83% want to grow their business in the coming year.

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Why Start Making As A Business? Makers have various reasons for why they got started — some are more practically-oriented while others are more personal. Understanding why they got started is key to understanding their journey and the choices they make, the goals they set and the milestones they celebrate along the way. • Make money and support my family • Exploit a market niche • Fulfill an unmet need • Experiment and learn • Help others/have an impact on the world • Be my own boss • Become an influencer What Does Success Look Like To Makers? • Creating a viable, socially-conscious business • Bringing joy to customers • Having fun, being a major player in the space with happy, healthy employees • Setting a new standard to show how things should be done • Being a role model for others

DEMOGRPAHICS

Survey responses suggest makers are likely to be white (72%), married (64%), well-educated (72%), women (74%) who live in the urban areas (74%) with a median age of 40 years old.

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$1.8M Moore Tech College of Technology Welding Facility 10.4.16

Who Are Makers

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Where They Make The Made By project’s geographic scope is Shelby County in western Tennessee, which is anchored by the City of Memphis. The map to the left shows makers’ primary workshop locations by ZIP code, based on survey responses. These data suggest makers operate workspaces across the county, including suburban towns such as Arlington on the eastern edge of the county, as well as closer-in communities such as East Memphis and Germantown. A density of maker activity exists in Downtown and Midtown. These data show little maker activity to the north, south and southwest of the city and county. More work in these neighborhoods will better reveal the maker activity.

MAKERS IN SHELBY COUNTY FREQUENCY 0

36 MILLINGTON

5.55 AVG ARLINGTON

LAKELAND

BARTLETT WEST MEMPHIS

DOWNTOWN MIDTOWN EAST MEMPHIS GERMANTOWN

MISSISSIPPI

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What They Make

The highest survey response rate was in the Furniture & Home Goods sector (43%). We believe the Packaged Food & Beverage and Hardware & Technology sectors may be underrepresented. To the right is a small snapshot of the wide variety of products made in Shelby County. Makers are creating new, innovative products and small-batch processes. • Phillip Ashley Chocolates uses airbrush techniques to differentiate chocolates and new-to-the-world flavor combinations • Terance Brown is creating new manufacturing techniques using silicone to make novelty items, appealing to customers looking for items "Made in the USA" • LATHA Bar creates bath soaps with a high attention to detail and unique packaging, making each soap a work of art • Brian Russell Designs continues to develop pioneering production processes working with glass and metal • Paper & Clay is collaborating with a technology maker to create an outdoor, electronic product for the home and another maker to create cutting-edge custom tools

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HARDWARE & TECHNOLOGY

APPAREL & ACCESSORIES

Machined & fabricated components

Hand-crafted jewelry

Predictive analytic devices for fleet vehicles

Handbags, clutches, dresses, coats & scarves

3D-printed dental prosthetics

Men's neckties & bowties

Medical device & auto industry parts

Pet accessories

FURNITURE & HOME GOODS

PACKAGED FOOD & BEVERAGE

Lip balms, soap & beard oil

Baked cakes, breads, rolls & pastries

Hand-lettered prints, greeting cards, calendars & coloring books

Beer & distilled spirits

Glass sculptures, ceramic vases & candles Custom wood tables & metal seating Guitars & mandolins

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Cured meats & charcuterie Probiotic beverages & kombucha Fine chocolates, candies & caramels

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The Maker Journey Derived from 32 in-depth interviews, these are the steps most makers take in their journey from inspiration to running a business. The journey is not linear and the steps are highly iterative. While every maker has their own timeline and their own unique story, identifying the common steps most take begins surfacing up a repeatable process, bright spots (positive points) and challenges (pain points).

HOW TO READ THE MAKER JOURNEY

Journey steps are highlighted in the black circles and augmented by a description in green arrows. Bright spots and challenges — derived from interview participant data — are called out in green bubbles. Steps encapsulating the strongest opportunity for this inititive are called out in the grey box to the right.

This map is intended as a diagnostic tool to understand where makers are in their journey, identify pain points and suggest interventions to keep them moving forward. It focuses our collective energy on developing pinpointed offerings that make the journey easier to navigate.

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The Maker Journey The Start Selling, Grow the Business, and Set Goals steps represent the biggest opportunity to create or coordinate offerings that better support makers. There is tremendous value in the other journey activities, such as Exploration and Experimentation; however, the commercialization steps are where deploying external resources can have the most impact.

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OPPORTUNITY WITHIN THESE THREE STEPS:

Support financial literacy and capital-seeking Grow the market size Enhance advocacy and support networks

Address production inefficiencies and contract manufacturing gaps Strengthen strategy, time management & goal setting practices

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The Maker Journey typically paired with classes, workshops and events that build a community and provide teaching opportunities.

maker’s story more than the product because the story is a connection point.

Pricing Pricing products is daunting for many makers. They worry that if they charge too little, they will devalue their work, but charging too much will harm the viability of future business. The ideal price often exists in a narrow band and is a tricky balance to achieve.

START SELLING

For makers to craft and sell physical products, they must have access to space, tools, workforce and capital. When starting out, some makers can create a home studio, cobble together basic tools, rely on help from family and friends and bootstrap funds to buy materials. This early access, however, is highly dependent on craft type, available community resources and the maker’s financial position. For some crafts, there are significant barriers to entry with equipment, which make it difficult, if not impossible, for recent graduates and those without financial reserves to pursue their craft. In addition, several crafts require industrial infrastructure due to water, electrical and ventilation needs, making them not conducive to an in-home studio. Some require EPA disposal of chemicals and create damaging splatter or residue. Small (10x10) studio spaces starting at $150—200/ month are available at Art Factory and around midtown Memphis and are a crucial asset for those unable to make at home. A larger problem is the lack of shared access to costly tools. Other cities have proliferated studios and workshops where makers can access equipment — especially more costly pieces — through a monthly fee or co-op model. This access is introduction

There is also a clear dichotomy in how makers price their work. Some perform structured research to get a good handle on their costs, while others rely primarily on experience and feedback. Even amongst those that know their costs, many underprice their work. They discount the supply and labor costs to arrive at a price that they think people will pay. Gaining experience, developing a standardized pricing method and achieving high confidence is what allows makers to feel secure in charging what they deem the product is worth. A small subset of makers, typically at high skill levels, feel the high price on their products accurately reflects the time and effort that goes into their art and expect the market will adjust accordingly. Marketing Storytelling is an important part of marketing maker products. This creates a relationship between the maker and the customer. Customers often remember the context

findings

Many struggle to market themselves, their story and their product cohesively. Plus, matching that marketing with the right sales channels can be a difficult task. This is coupled with them often having a hazy sense of their target customer. 29% of makers surveyed rated their competency in marketing, branding and promotion as proficient or expert. For some, it is intuitive, while others have figured it out after years in business or can leverage previous career experience and/or a business education. 34% of makers rated themselves as novice or emerging on these same topics. They struggle to find time for marketing, to articulate their story when it’s so closely tied to their identity or to know how to do it effectively, in part because of a lack of comfort with necessary tools, such as social media. A handful of makers find they don’t have to do much marketing. Sales and promotion opportunities come to them. These makers have excellent products and either a cadre of friends and customers advocating for them at every turn or a fantastic story which captures media and customer attention. Sales Channels Successful makers build multiple revenue streams across sales channels and sell both inside and outside of Memphis. They experiment with sales channels to determine what's next

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The Maker Journey the best fit for them. The type of product affects sales channel options. Small consumer goods like housewares, personal care items, apparel, accessories and some packaged food and beverages have the widest range of options, while larger or one-of-a-kind work is more constrained and often commissioned. Products aimed at businesses are typically sold by sales representatives or targeted relationship building by the maker. For consumer products, makers' early sales are often opportunistic with a local market coming up or a store willing to carry their products. They also usually start by selling through an intermediary that provides a digital or physical marketplace. Online, many turn to Etsy to quickly establish an online store. Locally, they take part in pop-ups, markets and festivals, which are accessible and affordable. The vast number of products sold on Etsy and other platforms make it difficult to get noticed. Thus, makers often create their own online store and then must master search engine optimization and social media marketing. Thanks to the plethora of free or low-cost tools available, establishing a website isn’t that difficult; however, for many, their website becomes a tool for establishing credibility more than a significant sales channel. Makers get selective about markets over time, realizing only a few will deliver their target customer and are worth their time and energy. Those with studio space and a following bring the market to them with open studio tours, providing customers an opportunity to see how the product is made and to interact in a relaxed setting. This leads some to want their own retail store (connected to the studio), as they see the potential to save the 50% wholesale margin paid to retailers. Unfortunately, many are not prepared for the significant time and cost commitment before making the leap. Micro-retail may be a better first option, assuming customers are satisfied introduction

with the limited hours and selection. Makers interviewed that successfully run their own retail shop expressed difficulty balancing simultaneous production and customer service without additional help and do not rely on it as their sole source of revenue. Most consumer goods makers try wholesaling at some point. Many continue despite low or non-existent profit margins until eventually realizing their costs make it unsustainable. Those with sufficient margins find wholesale frees them up to focus on production and developing new relationships that extend beyond Memphis so as to not oversaturate the local market. They must also build brand awareness and invest in excellent packaging design that tells their story so that the product sells itself from a retail shelf.

BRIGHT SPOT Hothouse is a creative and business development program for new makers, providing them guidance with supply chains, costs, marketing and technology that is run by the Crafts Council, London UK.

Most makers have not cracked the code on selling to businesses, unless their product is aimed at a business market, such as fabricating parts for medical devices or creating tech devices for fleet vehicles. Purchasing by large organizations is almost non-existent, though some makers are willing to create white-label products for business customers. Packaged food and beverage products are an exception, with a few creating a market niche in corporate gifting and events. Although there are cost and scale hurdles to overcome, institutional buying is worth investigating further.

KEY TAKEAWAYS

Ensure story and pitch are concise and compelling Articulate the target customer and where to find him/her

(craftscouncil.org.uk/what-we-do/hothouse/)

BRIGHT SPOT Hack the Hood is an award-winning non-profit based in Oakland, CA that introduces low-income youth of color to careers in tech by hiring and training them to build websites for small businesses.

(hackthehood.org)

Verify product prices are reflective of costs and market opportunity Establish a local sales territory and explore national opportunities

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The Maker Journey

STRATEGIC PLANNING

Achieving sustained growth requires a strong vision, a willingness to make investments and setting aside time to regularly plan for both the short and long term. However, as makers build their businesses, most find that day-to-day demands leave them too overwhelmed to invest in planning activities. Planning that does occur is typically for the day or week, but not the month, year or next few years. Many makers also feel ill prepared to set sales targets and projections until the business has significantly matured and they can reference prior year sales. The majority are figuring it out as they go, versus making decisions based on a business plan.

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TIME MANAGEMENT

Makers find that the business itself requires a significant time investment, leaving little left for creativity. However, creative time is imperative to the makers’ well-being and vital research and development for new products. Makers make the time, often fitting it in at night or on weekends. Those with maker enterprises on top of raising a family or a full-time job are further constrained and treat making as a part-time job to ensure it remains a focus.

Like other small businesses, makers don’t have strong infrastructure for managing time, customer requests, communications, ordering and inventory. This leads to piecing together order details from texts and emails, performing visual inventories, managing production demands and schedules from memory and creating multiple to-do lists. This fragmentation of information is not only stressful, but it also contributes to challenges with day-to-day and strategic planning.

SOURCING

To produce just the right product, makers spend a lot of time sourcing raw materials, components and packaging, which entails internet searches, recommendations from

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The Maker Journey others and ongoing trial and error. Small differences in materials matter, with one maker having tried 32 different types of butter and another experiencing several days of extra work due to her choice of leather for portfolios. Some are experts at repurposing otherwise discarded items, such as fallen wood or donated clothing. Lack of sales forecasting and storage space, as well as constrained cash flow lead many to purchase supplies just-in-time versus in bulk, thus causing them to miss out on volume discounts and savings on shipping or supply trips. Expensive expedited shipping charges are sometimes necessary to cover shortages caused by adhoc inventory management. Some pay retail rates for supplies and make multiple trips per week. Not aggregating volume is especially significant, since makers are often purchasing outside of the Memphis area due to selection, quality or price.

PRODUCTION

Makers take pride in the creativity and skill that goes into crafting their products. Fully handmade production, however, does not lend itself to scaling. Thus, many struggle with how to proceed based on their vision and limited capital. Some prefer to remain fully handcrafted and accept there is a sales ceiling. For others, as sales volume grows, physical space and equipment constrain production, and significant investment is required to keep up. Running out of space for raw materials and finished goods is often the first step. This may mean leasing and preparing a larger space, hiring a team of workers and/or buying several pieces of equipment. While this creates an exponential lift in production capacity, it also generates upfront cost and ongoing overhead that must be covered through a similar lift in sales. It’s a delicate supply and demand balancing act to maximize capacity and justify investment in scaling. Further complicating matters, for makers creating consumer products, the bulk of their sales occur at the holidays, leading to uneven production needs. Those creating business products find their sales cycles tied to that of the businesses they serve (e.g.,medical device or auto industry). Successful makers think critically and creatively about how to grow their sales during non-peak periods and build (non-perishable) inventory levels over the course of the year. Failure to do so creates another sales ceiling, as investing in growth infrastructure for just three months of strong demand is unsustainable.

LOGISTICS & DISTRIBUTION

Makers ship in supplies and ship out products, but for most, this activity remains a costly afterthought. They typically use USPS™ to get products to customers and without sophisticated shipping software. The exception is those with highly valuable, breakable or perishable pieces and those shipping significant volumes that have negotiated discounts with FedEx™ or UPS™. This is a small percentage of the maker community. High shipping costs are a significant barrier for growing online sales, as customers are often unwilling to pay these charges and the maker can’t afford to absorb them. This problem is exacerbated for those making furniture or other large, heavy items.

“I need to be able duplicate in order to scale production. With increased capacity, I can then explore other markets. With other markets comes more demand. With more demand comes more business which means more revenue and more jobs created.” daniel

“I made some rules for myself. I usually do paid commission stuff from 9-5pm, then will do personal creative things.” sarah

For distribution to retailers around town and the region, makers deliver the product themselves. This allows them to nurture customer relationships and check on product displays and sales, but it also costs important time that could be spent on planning and production.

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The Maker Journey The Team at Ekata Designs in Binghampton

Makers move between stages freely as they meet milestones and prepare to set new ones. This sometimes results in going back and experimenting with new products to explore new avenues.

EXAMPLES OF MILESTONES Reward For Hard Work

LAUREN loves when she sees kids that have moved on to bigger and better things after working for SWEET LA LA’S. ELYSE is now able to work on PRIM SOCIETY full-time after moving to Memphis because the cost of living is much lower than where she lived previously. Sales Channels SARAH recently met her dream goal of selling her SIGNET SEALED coloring book in Muddy's Bake Shop. Opening A Brick & Mortar GRACE recently opened her MBABAZI HOUSE OF STYLE retail shop — a goal she has had since starting her business here in Memphis.

MAKER ATTRIBUTES

Self-reliant, driven by grit. Makers are a perfect fit for the Memphis Grit & Grind culture. Makers have to be strong, resilient and flexible in order to keep moving forward. Continuously improving. Makers seek to master the fundamentals of their craft, and many are willing to share their knowledge to better others. introduction

Innate problem-solvers. When faced with a problem or challenge, many makers will stick with it until they figure it out, no matter what. Collaborative. Makers search for fellow makers to share ideas and learnings with in order to keep their craft & business moving forward.

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Quality-driven. Makers focus on quality in their product and in their relationships with those purchasing their product; they value themselves and what they make in relation to who they are selling to. It's personal. Making is key to who they are and what they do. For many, it's also key to their well-being. what's next

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Maker Mindsets MAKING IT WORK VS. MAKING IT BEST

We observed two very different mindsets among makers when it comes to decision-making about their craft and their business. Some are constantly making it work with what they have, while others are pushing and optimizing toward a vision that exists in their mind. The ends of the spectrum are characterized by the relationship between a maker’s vision for their making and their risk tolerance. Makers with a big vision are more than willing to take big risks in their craft or business to make things happen. The Spectrum For those who are making it work, this means adapting their equipment rather than purchasing new, limiting trial-and-error cycles in new product testing, or not hiring employees and opting to do everything solo. This is closely related to the observation that when there’s a lack of experience and/or education, makers are pushed to experiment and figure it out — and oftentimes they’re taking on commitments they aren’t sure they can meet, but they push themselves to do this problem-solving under pressure to make it happen. For many, this is how they grow and continue to develop confidence in their skills and problem-solving abilities. For those who are making it best, this means regularly investing in improved production and quality standards, constantly iterating on new product designs or thinking everything through over and over before testing and executing an idea. This is linked to the finding that some makers like to push boundaries just because they can and no one else is doing what they’re doing in Memphis or elsewhere. This is especially true of makers who are mastering their craft and constantly seeking new levels of accomplishment.

"I’ll make a chocolate in my head 30 times before I actually make it in reality. I look at is as playing chess or preparing a game plan. You’re strategizing, “If you do this, what’s the outcome? If this is the outcome, is this something that we want? Is that the desired thing?" phillip

"I did not have a multicolored embroidery machine, so I adapted an industrial machine to add a second color of thread. I moved from a 1 to 2 thread machine by doing this. I still have to move and monitor it myself, but this way I do not have to totally rethread when I want to change between colors." kathleen

"We had an opportunity to do the NBA thing, and that was a $15,000 licensing deal, but it's still great. It was a huge investment for us as a small business, so having to do that was a bit of a strain because it tapped into a lot of money earmarked to introduce new fabrics and all that good stuff." tramica

Risk-Taking Risk-taking is a key, related dimension to the maker mindset. For example, Tramica and Moziah of Mo’s Bows, a growing apparel company, took a big risk negotiating an NBA licensing deal, but knew the net gain would help them move closer to Mo’s larger vision.

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"I wanted to do a chai latte cupcake after seeing a box of the tea... I just couldn’t get the chai taste in it. I couldn’t get that to form. I leave my limit at 3 iterations. At that point, you’re forcing it. Because most flavors come very, very easily." cassi

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Memphis Maker Products

Maker Skills COMPETENCIES

Makers report strong artisan skills contrasted with lower business competencies based on survey results. Makers were asked about artisan and business competencies grouped into four skills families. These skills families are adapted from an artist entrepreneurship framework (Essig, Artivate: A Journal of Entrepreneurship in the Arts Winter 2016) and include the following key attributes: networking for collaboration, hard skills for business, strategic thinking, marketing communication and recognizing opportunities. We created the following three skills families based on survey results. Artisan Skills Family • Innovating your physical goods • Finding inspiration • Keeping your physical goods relevant • Prototyping • Proficiency in craft & technical skills • Producing physical goods

Marketing Skills Family Networking • Planning • Time management • Marketing • Branding & promotion • Understanding & identifying audience • Connecting to new market opportunities • Pricing & selling physical goods •

Business Back Office Skills Family • Filing • Tracking paperwork • Record keeping • Financing & contracts • Navigating licensing, certification & regulatory processes

Survey results suggest that: Makers consider producing physical goods to be an artisan skill and not business-related Makers with stronger marketing skills may not be comfortable with business back office tasks Collaborating with peers is independent of all other skill families These data demonstrate that makers report stronger artisan skills and indicate room-to-grow business skills among many artisans.

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" Makers are helping build more resilient local economies by creating their own jobs, sourcing their materials from other local businesses, and providing consumers access to personal, meaningful goods. Though these businesses are small...they add up to something big." Althea Erikson, Global Policy Director, Etsy

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The Maker Ecosystem While many of our findings are applicable to makers anywhere and contribute to the larger body of knowledge around maker enterprises, some are a direct result of the current system in which they operate. The following pages highlight key gaps and needs in the Memphis and Shelby County ecosystem. Special emphasis is given to the most critical nodes: Suppliers, Production, Sales Channels, Capital, Advocacy, Community and Education.

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The Maker Ecosystem

Sourcing Improving availability of raw materials would save makers time and money, and keep more money in our local economy. In the past, cities like Memphis had high-quality options to purchase materials and supplies, especially fabric and wood. For several reasons, these options no longer exist. Makers cannot find the selection, quality or cost-effective options they need to source raw materials and supplies locally. Memphis has a lack of hybrid suppliers for “prosumers” and those running a business. Makers source outside of Memphis and pay shipping or make long treks to acquire supplies. These higher input costs cause Memphis-based makers to price their products higher or to realize smaller margins compared to those who can source locally.

Production Helping makers solve production inefficiencies would reduce costs and increase capacity. Many makers are aware of their production bottlenecks and have ideas for how to address them, but they lack the time, capital or know-how to put solutions in place. In some cases, a new or replacement piece of equipment is needed. Other times, it is finding a skilled employee or the right contract manufacturer. By working with makers to clearly identify pain points and connecting them to resources to close gaps, we can support them in realizing efficiencies that save them money and allow them to produce more. This, in turn, may open new sales channels, such as wholesale, by improving profit margins.

Inbound Logistics Memphis’ strength as a logistics leader should convey an advantage to local makers. Memphis is a global logistics and distribution leader in North America. It is where runway, road, rail, and river converge. Unfortunately, makers do not benefit from this robust transportation infrastructure until they reach large volumes that qualify for sizable discounts. Exploring fulfillment options for finished products as well as aggregated-volume shipping options might identify new efficiencies and cost-saving opportunities.

Adding new, small-batch contract manufacturing to Memphis would allow local makers to scale and bring money into the local economy. Production is not a creative pursuit; therefore, some makers would consider outsourcing production on designs already perfected. However, regional contract manufacturing options are non-existent or limited. Many existing manufacturers have very large minimum orders, and smaller manufacturers are hard to find. Thinking creatively about current options, exploring Etsy Manufacturing possibilities, and tapping

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entrepreneurs to close key gaps all warrant further investigation. Implementing shared service opportunities could improve profit margins. Today, makers generally handle their own packing and shipping, photography and back office functions. If the need for non-proprietary functions like these could be aggregated and corresponding services offered across a large group, it may be possible to reduce costs. Quality may also improve if an expert is performing the function, such as a shipping expert handling packaging of fragile products. Sales Channels For makers to thrive, they must define their target customer and in turn, we must increase the local market size. Makers view Memphis as a great place to start a business, but not the best place to sell their products. 45% of makers surveyed cite a lack of local markets to sell goods as a barrier to scaling their business. Makers interviewed who are growing quickly are balancing multiple sales channels and have a sizable portion of their revenue coming from regional and national sales. Creating a strong consumer value proposition and local brand would drive

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The Maker Ecosystem

Memphis Maker Fair, City Hall 6.22.16

local appreciation and support of makers. Anecdotally, we know that many Memphians lack awareness of what is made locally and where to buy such products. They are not seeking this information, nor are they encountering strong messaging about it. When they do come across locally-made, handcrafted products, they find them expensive, as their benchmark is a mass-produced alternative. They do not understand the higher costs associated with small-scale production, nor do they find sufficient value to justify the price premium. Consumers seeking and buying handcrafted and small-batch goods espouse a "want better, not more" mindset around discretionary purchases. Expanding the market size must include creating more non-holiday sales opportunities. Today, the majority of handcrafted products are purchased as gifts with makers generating as much as 90% of their revenue during the fourth quarter. This creates cash flow difficulties and limits maker

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growth. Food, beverage and personal care products are sometimes exceptions. Craft beer and locally-roasted coffee are examples that reached a tipping point and are now regularly purchased in lieu of non-local brands. In the technology space, makers selling to businesses, like fabricators, find revenues closely align with customer business cycles. Overall, markets throughout the year and retailers stocking locally-made products are beginning to address the seasonality problem, but more progress is needed. Quality and depth of sales channels must be addressed to increase revenue potential. Makers have a wide variety of potential sales channels, from markets to wholesale to large institution procurement. However, there is a dichotomy in the depth of options within each vertical. Local markets are proliferating, but most are not well curated with a target customer in mind. Better, not more, local markets are needed to continue attracting both makers and customers. On the other

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hand, relatively few retailers carry locally made goods, and those that do tend to also be local and clustered in specific geographic corridors, such as Broad Avenue. The exception is grocery chains Kroger and Whole Foods with local product stocking efforts. This lack of options extends to large organization purchasing, like medical institutions and the City of Memphis. This is a largely untapped market for makers outside of corporate gifting and events. For these verticals, we must craft a compelling value proposition for them to invest in locallymade options. Finally, purchasing managers should turn to the maker community to create new product innovation. Institutional decision-makers, such as those in the public sector, hospitality and healthcare, search and are unable to source locally-made products. Managers participating in venues focused on small business procurement can create opportunities for makers to develop new products and generate new business opportunities.

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The Maker Ecosystem

Capital We must improve the ability of makers to acquire needed capital. Like many entrepreneurs, makers struggle to acquire capital. Financial institutions from private banks to community development financial institutions (CDFIs) and even local government provide small business loans for working capital, fixed assets and inventory. However, making financing available doesn’t always translate into access. Lenders have risk profiles or application requirements that many makers can’t satisfy. For example, makers who do not pay themselves a salary, reinvest all profits back into the business, co-mingle personal and business expenses or do not have 18 months of complete financial statements are evaluated unfavorably by financial institutions. Makers who can’t demonstrate a strategic vision backed by a business plan are also unlikely to secure a loan. Specific to this sector, those with a craft versus business orientation quickly feel overwhelmed by the unfamiliar terminology and onerous loan application requirements. Finally, some can’t meet credit score requirements because of struggling through a lowincome background or from keeping their business going by paying personal bills late. CDFIs play an important role in this space, as their requirements are more flexible than traditional lenders; however, even with their slightly relaxed requirements, many makers still aren’t accessing capital.

The cash flow challenges of a product-based business require creative solutions to capitalize on growth opportunities. Makers tend to need capital when adding capacity, replacing equipment or preparing to fulfill a large order. In all cases, financial outlays are required before generating revenue. One maker who pursued "purchase order financing" expressed frustration over extremely high interest rates. Makers acquiring equipment often fair better, as the equipment serves as collateral (assuming they can successfully navigate the application process). This requires careful strategic planning, which is often a challenge for makers caught up in the urgency of daily demands. New options for managing cash flow challenges may enable some makers to transform their business. Interest in impact investing could create new capital pathways. Private investors represent another form of capital for makers. If properly cultivated, slower growing businesses like craft enterprises may attract angel investors with an interest in entrepreneur-led community and neighborhood economic development.

Support System A more connected maker community supported by strong advocacy is needed to help Memphis-area makers thrive. Today’s maker community is more social than supportive. Beyond individual social circles, there’s a lack of awareness around other makers, their work, what they offer and what they need. This challenge is exacerbated for makers outside of downtown and midtown Memphis who are even more disconnected. A few makers serve as important inspiration to others, but leadership is lacking around building widespread community and advocacy efforts. Only 21% of makers surveyed belong to knowledge-sharing and advocacy organizations like guilds, and Memphis, unlike other cities, does not have an overarching organization that works on behalf of its maker community. Better connecting people and resources would change the playing field for many makers, raise the design standards over time and amplify the positive momentum that exists around handcrafted and locally made goods. The lack of a robust personal network must not prevent makers from cultivating a successful maker business. Expansive, well-connected networks are essential for tapping into resources and opportunities. Friends and family networks are the first sources of capital, labor and connections. They also tend to be early customers in addition to providing business advice and making key introductions. These introductions can lead to mentorship opportunities and open new sales channels. 41% of makers surveyed have never been mentored. Makers without strong networks and social capital are at a distinct disadvantage. We must think critically about ways to overcome this disparity so that makers from all backgrounds have real opportunity to start and grow their business.

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The Maker Ecosystem

BRIGHT SPOT South Puget Sound Community College offers a degree in craft brewing, distilling and cider making. The goal of the program is to prepare students to enter the industry with a solid understanding of the science, technology, agriculture and business behind brewing and distilling. Classes set to launch Fall 2017.

$1.8M Moore Tech College of Technology Welding Facility 10.4.16

(spscc.edu)

Skill-Building Makers have no clear education path that sharpens their craft while preparing them to run a business. Formal education in Memphis does not cater to aspiring makers. Memphis College of Art and the University of Memphis (U of M) provide solid foundations in certain crafts, but tension exists between fine art programs and the legitimacy of functional art. Technical schools provide an excellent basis in skills like welding or fabrication, but focus more on function than form. Neither type of school prepares students to run their own business. Business majors at U of M can minor in entrepreneurship, but this leaves students to master a craft on their own. No local programs teach product design. Aspiring makers have many gaps to close upon graduation, which intensifies the need for apprenticeships with established makers. Craft-oriented schools in other cities and those teaching product design are sources of best practices for Memphis to consider in shaping the next generation of small-batch product companies. Makers are not connecting to classes that refine their craft skills or close business knowledge gaps. Makers have limited options to hone their craft skills beyond a degree or certificate program. Class and workshop offerings are ad-hoc and focus more on beginner skills versus advanced programming. This makes apprenticeships with master level craftspeople essential and limits our ability to raise the level of craft across Memphis. Business offerings are equally ad-hoc with classes and workshops not customized to a product-based business and language that leaves many makers feeling confused and out of place.

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BRIGHT SPOT The Engineering Career Academy at the Birmingham City Schools (AL) introduces high school students to the basics of product design. (bhamcityschools.org/Page/14032)

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Hobbyist

Lifestyle-Focused Growth-Focused

Side Hustle

Reputable National or Global Brand

Maker Distribution: Today As we look across the landscape of Memphis-area makers, we see a distribution that skews heavily towards hobbyists and those selling what they make as a side hustle. A smaller, but still sizable group makes their business a primary source of income, with it supporting themselves and often a part-time helper. Those that remain in this group tend to be lifestylefocused — they don’t aspire to grow much larger, fearing it will mean spending most of their time managing a large team versus designing and creating. The next group is even smaller and includes those running a business that is growth-focused. Specifically, they are growing sales and scaling. The maker is often still the main source of new product designs, but he or she relies more on a team of employees or a contract manufacturer for day-to-day production. The final group are those driven to build a reputable national or global brand and to lead the company behind it. Hobbyist. Makers that make for the love of making. They are not interested in selling what they make. They're often on the bleeding edge and are early adopters of their craft. They continuously experiment with new materials, processes and techniques.

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Side Hustle. Makers that create on the side, not as a full-time endeavor. Some want to move toward full-time and others just want to generate additional household income. LISA, LATHA Bar

Growth-Focused. Makers that are driven by business goals but are still based in their craft. They could have up to 10 employees and might oversee others doing production. They actively cultivate sales channels outside of Memphis. PETER, Preteckt

TERANCE, Terance Brown Lifestyle-Focused. Makers that generate their primary source of income through making. They are driven by craft, which defines their lifestyle. They may have 1—2 employees, but may also wish to remain fully handcrafted and not scale too large.

TRAMICA, Mo's Bows Reputable N  ational or Global B rand. Makers that are driven by managing their business and their team. They are actively expanding their reach and reputation.

TOOTSIE, Tootsie Bell Silversmith and Jewelry

PHILLIP, Phillip Ashley Chocolates

ELYSE, Prim Society

WILLIS, Y&W Technologies

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HOBBYIST

GLOBAL BRAND BUILDER

SHIFT TO LIFESTYLE-FOCUSED

SHIFT TO GROWTH-FOCUSED

Maker Distribution: Tomorrow

OPPORTUNITY ZONE

The Made By project is an opportunity to shift this distribution of makers to the right and close the gap between the current state and a more robust future. Many makers, including some featured as examples in the previous graphic, aspire to progress one or more steps to the right of where they are today. Makers currently running their business as a side hustle can grow to making it a full-time endeavor. Lifestyle-focused makers can grow into managing a team. The key is to marry the right support with the goals of the maker. Growing more makers toward the right of the spectrum accomplishes several important objectives. Enables more makers to successfully make Increases the collective economic Grows the pool of skilled and a living from their creative business impact of our maker businesses semi-skilled job opportunities The biggest opportunity is attracting more makers into the lifestyle-focused and growth-focused categories. Creating new programs, services and outreach should be focused on this opportunity zone. More national and global brands are, of course, a huge benefit to the local economy and serve as critical inspiration to others, but realistically will remain a small number based on overall market dynamics, as well as the ambitions most makers have expressed. Makers starting high-growth, rapid-scaling businesses will remain outliers in this distribution.

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Leather Card Holders by Brittney at Don't Blink

Fundamentals GROWING THE BUSINESS

Growing a make business and moving to the right on the maker spectrum requires significant investment of time, money and expertise in the business foundation. •

•

Space. Find, lease and prepare a space that accommodates the people, equipment and storage needs associated for current expansion needs and continued growth. Equipment and machinery. Identify, source and install key machinery and equipment that can remove production bottlenecks and add capacity.

•

Back office. Identify and implement effective solutions for insurance, accounting, human resources and legal needs.

•

Workforce. Find, recruit and train an appropriately skilled workforce.

•

Capital. Maintain cash reserves or access to funds for major investments and unanticipated expenses arising from expansion.

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These entrepreneurs are typically managing everything by themselves, figuring it out as they go and relying on internet searches and advice from those in their network. Those with global brand aspirations sometimes have business partners or investors that can help to fill knowledge and capital needs or connect them to someone who can. Providing support to help makers navigate these foundational pieces quickly and successfully would help more achieve their growth aspirations.

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Overall Takeaways Highly-skilled makers are determined problem-solvers and micro-entrepreneurs. The current, typical Memphis maker profile is white, well-educated, married women with a median age of 40 who live in the city. Small-batch production clusters exist in parts of Downtown and Midtown Memphis, as well as the Broad Avenue corridor in Binghampton. Makers create innovative, small-batch products in a variety of sectors including apparel & accessories, packaged food & beverage, hardware, technology, furniture, and especially home goods. Many people make on a part-time basis, but most want to grow their businesses. Increasing the number of lifestyle and growth-focused businesses is the main opportunity to increase the number of creative entrepreneurs. New programs, services and outreach will need to be created. Cities across the U.S. recognize the value of the creative economy for both the cultural and economic impact. For Memphis to be more active in the creative economy, several barriers will need to be overcome including: space, tools, raw materials, and skills. Finally, it is imperative that makers are able to leverage Memphis’ comparative advantage in logistics and distribution.

Findings Summary Key findings from our six months of rigorous research are contained in this section. We begin with a macro view of makers as a group and their contribution to the Memphis region and then dive more granularly into specific attributes, behaviors and needs, both observed and inferred from the research.

MAKER MINDSETS

Most makers are primarily motivated by their craft and often don’t label themselves as entrepreneurs A subset of makers see the craft as a means to a business and function more like traditional entrepreneurs Risk tolerance depends on vision, product and whether the maker embraces a makingdo versus making it best approach

GROW THE BUSINESS

Makers plan for today, leading many to purchase supplies just-in time Makers lack cohesive infrastructure for managing communications, ordering and inventory Fully handmade production does not easily scale and adding significant capacity requires both expertise and capital Successful makers intentionally grow non-peak sales and carefully manage both inventory and cash flow throughout the year

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ENVIRONMENTAL FACTORS

For more makers to prosper, growing the local consumer market size is essential Existing sales channels often lack quality or depth of options beyond a handful of standout local nodes The current stock of studio and commercial production space does not meet maker needs Connecting makers to capital and business services is a critical need Raw materials are difficult to source and purchase locally

SKILLS & COMPETENCIES Makers report strong artisan skills, but recognize the need to improve business competencies

Business education outreach should be specifically tailored to makers with an artistic background. Opportunities for maker apprenticeships and mentorships are limited in Memphis

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BUILDING COMMUNITY An organization advocating for the maker community, that cuts across multiple sectors and focuses on branding products made in Memphis is critically needed

START SELLING

Accessing tools is a barrier for makers due to cost. Other cities have use co-ops or subscription models to provide access. Many makers struggle to market themselves, their story and their product cohesively, in part because it is so personal to them. Makers find it hard to stand out online and often have difficulty building it into a significant sales channel. Successful makers build multiple revenue streams across sales channels and sell both inside and outside of Memphis. Purchasing by large organizations is almost non-existent and could represent an untapped opportunity.

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W H AT ' S

N E X T

Community Collaborators Meeting 7.7.16

The Made By project uses a design thinking approach to craft an economic development plan that fosters more entrepreneurs who make physical products and helps existing enterprises thrive. This report documents the first two phases of Little Bird Innovation’s design thinking process: framing the opportunity through human-centered research and analysis. The next step is generating new solutions for Memphis-area makers based on findings in this report. Potential solutions are evaluated based on assessment of desirability, feasibility and viability. Between now and May, the project will focus on prototyping and brainstorming solutions that lay the foundation for a multi-year development plan. Memphis-area makers will play a critical role at each stage in this process. BALANCED BREAKTHROUGH MODEL

All potential solutions are assessed through these three lenses. Concepts that rate well on all three aspects represent the greatest opportunities.

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PROJECT TIMELINE

Ideation & Co-Creation These findings serve as a platform on which to start building strategies and solutions to support makers. We will do this by collaborating and co-creating in workshops and roundtables with the Advisory Board, makers and key stakeholders working in adjacent spaces.

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January – February Share findings report broadly

Prototyping It is important to test early ideas in a low investment, low barrier environment to assess strengths and weaknesses. We have experimented with producing a novelty item using 3D-printed molds and will start 2017 with a series of financial readiness workshops. A series of additional prototypes are being prioritized. Planning & Roadmapping Through co-created solutions and prototyping, we will develop a strategic development plan with recommendations for how EPIcenter, the City of Memphis, our Advisory Board members and other interested parties can create programs and offerings to better support makers and their positive impact on economic development. Guiding Principles As we work toward new solutions, it is important to use guiding principles to keep ideas focused on maker needs. The "should" considerations are absolutely crucial to the success of potential solutions and will create the most impact, while other considerations in the "could" category are important to keep in mind, but are less inherently crucial. This is a way of prioritizing what needs our solutions address—see considerations below.

Identify quick wins Prioritize key gaps to close Gather stakeholders, including makers, for focused brainstorming around potential solutions Run limited prototypes (concept tests) to learn what works and doesn’t work February – April Refine concepts with makers Assess desirability, feasibility and viability of key concepts Explore leadership options for each new concept Continue limited prototypes and assessment of outcomes

Solutions that address maker needs…

April – May Assess implementation needs

Should

Develop short-, medium-, and long-term roadmaps

Support the local economy by keeping sourcing, manufacturing and other key value chain activities as local as possible Take into consideration that makers and creatives do not always speak the same language as other entrepreneurs & business people

Create final report Secure funding for roadmap activities

Meet entrepreneurs, and the stage of their business, where they are by improving upon what exists, rather than prescribing what should be Foster a sense of community among makers and push for higher-level maker advocacy Reflect what is authentic to makers in its design, aesthetics & presentation

Might Be sensitive to the fact that access to capital is one of the biggest difficulties among makers Support the storytelling component of Memphis-made goods

Could Take the inaccessibility of Memphismade, handcrafted goods into account Encourage cross-sector collaboration as new sources of innovation

We will continue making periodic updates on our website as the project progresses. To get involved or discuss how you can support makers in your community, contact us at info@ madebyproject.org. We’d love to hear from you.

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A P P E N D I X

Sarah at the Ekata Designs Studio

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version. We deployed only the full version in an effort to maximize depth of data captured about each maker and their enterprise. Going forward, we see circumstances for which a shorter version would be appropriate, such as working with neighborhoods where trusted relationships are in the early stages or where the request to fill out the survey is coming from a friend of a friend of a friend. Just engaging the maker to share their contact information is a huge win that can then be built upon with subsequent efforts. We believe those producing a prepared food or beverage product may not identify with the term "maker" and that our outreach may not have resonated with them as strongly as it did with other respondents, such as those in the furniture and home goods sector. For the hardware and technology sector, we expected this to be a smaller group than the others, but believe that deeper penetration of the Memphis medical device industry and other small niche groups could yield larger response rates. We spent time with a few maker groups focused on technology, but we found they largely prefer the learning journey of exploring technologies versus commercializing their developments.

Made By Survey 315 respondents completed the Made By survey, which explored topics such as inspiration, business income, time devoted to making, education, perceived competencies, barriers and future plans. We surveyed makers across Shelby County with the goal of engaging makers from all neighborhoods and craft types. During survey design, we realized that encouraging participation solely through our existing network of makers and their subsequent networks would lead to a "convenient sampling" that was not representative of all makers. We worked to offset this selection bias by recruiting and hiring makers and community advocates with networks and trust built in neighborhoods where we had little local knowledge or access. These dedicated individuals, referred to as "Community Collaborators", helped extend the survey reach through social media, events and word-of-mouth.

SURVEY LIMITATIONS

The Made By project survey reached a broad group of makers across Shelby County; however, the effort uncovered limitations that made us

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consider how to forge an even stronger and more inclusive outreach effort in the future. Although Community Collaborators definitely brought in voices we otherwise would have missed, there is more to do to ensure that we connect with makers from all neighborhoods, craft types and socio-economic groups in the region. For example, Memphis has a growing Latino population that we know, anecdotally, includes makers. Although we translated the survey into Spanish and promoted it via a popular Latino print publication, only 2% of respondents identified as Latino. Follow-up investigation revealed that the survey was likely too involved and personal, considering we did not have an established and trusted relationship with these individuals. We recognize forging these relationships takes time; therefore, in the future, we anticipate engaging these participants face-to-face through events in the Latino community and gaining the information we seek through an introductory conversation. While designing the survey, we debated launching both a full-length and abbreviated

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Finally, the Made By survey was intended to engage and measure maker enterprises of all sizes in Shelby County up to $1M in annual revenue. Our results skewed heavily toward smaller enterprises. We believe this occurred for a number of reasons. First, there are more small, individual maker businesses than large ones. Second, our use of the term "maker" to define this disparate group of individuals likely did not resonate with larger entities that have moved past defining themselves by the making activities of their founder. Third, many businesses move away from handcrafting their products as they scale and embrace a more mechanized manufacturing process that is often outsourced to places outside Shelby County. Lastly, larger organizations are harder to navigate and to engage for activities like surveys, especially when responses are needed from the founder. A follow-up effort that zeros in on these businesses and connects back to the work to-date would be helpful in showing what's possible and the growth trajectory from a one-person shop to a business employing many people within Shelby County.

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Maker Ecosystem Development at Little Bird Innovation

Ecosystem Mapping In addition to looking at the journeys and experiences of makers, we also examined the larger system in which they operate. Through discussions with makers and Made By Advisory Board members, online searches, phone calls and facility tours, we mapped much of the Memphis-area maker system. Even today, we continue adding data to specific areas of the ecosystem as new offerings emerge. It is clear from this ongoing analysis that makers are creating and running their businesses in a very disconnected web of resources and services. Our goal is to make sense of this fragmented ecosystem and identify key gaps needing to be addressed.

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Made By Analysis at Little Bird Innovation

Research Analysis Made By is pioneering a new understanding of makers, in part because of the depth and breadth of data being brought together into one actionable body of knowledge. The project team analyzed each stream of research independently before bringing it together into one holistic set of findings. Along the way, the Made By Advisory Board was briefed on findings and helped to prioritize key learnings. We began with a literature review, benchmarking and secondary research, which we synthesized into one document of learnings shared out early in the project for stakeholder feedback. This informed and shaped survey and interview design. Then we analyzed the in-depth interviews, which entailed qualitative cluster analysis, which means making sense of a large amount of data by grouping similar stories and statements (e.g., stories about studio space). After grouping, we identified patterns within each topic area (e.g., lack of affordable studio space, difficulty separating work/life with a home studio). This culminated in writing theme statements that explain what is happening within or across patterns. These themes describe and provide rich insight into what is at play in the lives and journeys of makers. We then compared and contrasted interview themes with findings from the survey. This provided an opportunity to generate new questions or nuances to explore in the survey data, such as the role of education on other outcomes. In some cases, the survey and interview responses closely mirrored one another. However, in other instances, data about the same topic is contradictory, which led to robust discussions on what might have caused these differences.

FINDINGS

After we gather information from several data sources, these are some things that will come out of the box.

We complemented this data set with analysis of the available resources in the Memphis market via the ecosystem mapping. A top mapping priority was identifying gaps that prevent makers from starting, running or scaling their businesses. Throughout the analysis, we looked for opportunities to visualize data in ways that yielded new understandings and made findings easier to absorb. Our frameworks and visualizations form the basis of the findings shared in this document.

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Made By Memphis The majority of the survey respondents have studios located in Midtown or Downtown. Overall, Furniture & Home Goods, along with Apparel & Accessories are found in a greater concentration within the midtown area and expand east, whereas Packaged Food & Beverage are made primarily in the downtown area.Made By will launch a mapping tool on the project website in 2017 where makers can add their studio locations to help close data gaps. We will continue working to identify and engage makers who have yet to participate. MICHAELS

MEMPHIS AREA MAKERSPACE

Supplies & Raw Materials

ART CENTER

Supplies & Raw Materials

HOME DEPOT

Supplies & Raw Materials

Support Services

MEMPHIS COLLEGE OF ART Education

BEAD COUTURE

Supplies & Raw Materials

Maker Resources Fifteen in-depth interview participants provided a detailed look of their maker-related activities in the metro area. The map above shows where makers are locally buying supplies and raw materials, selling their products and acquiring education and support services. Those called out are resources mentioned most often. • •

•

In many cases, a location supports more than one function, such as being both a retailer and provider of educational workshops.

Suppliers and raw materials are in close proximity to the retail and sales channel businesses within maker corridors, offering makers a more comprehensive ecosystem of resources. The density of workspaces, retail sales and suppliers near Midtown and Downtown is higher compared to other parts of the metro. Makers locate near resources and further fuel demand for supply offerings and sales channels bolstering their local economy.

At least two creative activity hubs exist. One Downtown near the river along Front Street and South Main and another in Binghampton along Broad Avenue. These hubs correspond with the density of resources, such as education sources, support services and suppliers available to makers and other creatives. introduction

Broad Avenue has actively developed into an arts district, evidenced by the density of maker studios and supporting resources. While this density appears as a maker island, new studios continue to emerge in the light industrial buildings on the streets adjacent to the main Broad Avenue corridor. Some resources, such as Five in One Social Club and Falling Into Place on Broad Avenue, are multifunctional in that they house workshops (education) and sell local goods (sales and retail). context

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National & International Impact Makers buy supplies from vendors and sell their products to customers inside and outside of Tennessee. During the interview process, 15 makers identified vendors and customer locations. This map depicts the national reach of makers. The Memphis metropolitan area includes people living in Tennessee, Arkansas and Mississippi. According to the maker data, regional customers are important. From just 15 interviews, makers identified customers in both Arkansas and Mississippi 8 times. Customers in key states outside the region include California (8), Florida (8) and Wisconsin (6). Makers often referenced their customers outside of Memphis as residing in larger cities, such as Los Angeles. Outside of Tennessee, makers use suppliers headquartered in California (11), Wisconsin (5) and Washington (3). In some cases, the same supplier was identified by multiple makers, such as Wisconsin-based ULINE (shipping supplies) and Washington-based Amazon.com (generic).

INTERNATIONAL North America Canada Dominican Republic

South America Colombia Peru

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Europe France Great Britain Netherlands Portugal

Africa Ghana Madagascar Uganda

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Asia China Israel Malaysia Singapore

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Australia

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madebyproject.org @madebyproject

littlebirdinnovation.com @littlebirdinnovation

epimemphis.com @epimemphis