Management at a thriving digital agency say the only barrier to their company’s continued growth stems from inability to find suitably skilled staff within the North East.
The Newcastle-headquartered Hedgehog Lab, which focuses on the ‘post-PC’ world of smartphones and tablets, has seen turnover jump from around £280,000 last year to just under £1m in 2014, while staff numbers have risen from 11 to 27.
However, managing director Sarat Pediredla said when the firm advertised vacancies for mobile developer roles, it received less than one application a month.
“We want to remain in Newcastle as we recognise the advantages of being here,” he said. “We’ve also got a good team in the Newcastle office of around 17 people.
“But the reason we’ve not risen above £1m turnover is that we’ve had to turn down work. “We’ve tried bringing in freelances and working with other agencies but it’s not enough.
“That’s why in late 2013 we opened an office in India - to find the skills that we need.”
Mr Pediredla said that in the long-term, the future looked bright for the region’s digital skills, with initiatives such as Dynamo and coding clubs in schools helping to nurture the talent of the future.
In the short-term, though, the firm has had to rely on building links with Newcastle College, Northumbria University and other educational establishments to find the skills it needs to grow.
“It seems that we’re doing well, but some of our competitors in London are growing at 500% or 600% a year,” Mr Pediredla added.
“I know of one company growing 1000% year-one-year.”
Throughout its short life to date, Hedgehog Lab has changed considerably, adapting to market fluctuations and new, innovative technologies.
The firm was set up in 2007 by Mr Pediredla and co-founder Mark Forster, who both have backgrounds in the sector but who wanted to set up a different kind of company.
Initially, the business focussed on software products, but, given the dip in the economy, they found it a difficult sector to launch in.
Hence, the shift to the emerging post-PC world, which involved starting afresh with just three members of staff in 2010.
Since then, business has rocketed, with recent projects including work for the Financial Times and “huge” developments in the healthcare sector.
Hedgehog Lab has also provided Hult International Business School with a new platform on which so called ‘soft skills’ - such as communication - can be rated, and has started partnering with a number of start-ups.
“We have equity stakes in those, rather than just being consultants,” Mr Pediredla explained. “I’m actually on the board of one of the companies we have invested in.”
Going forward, Hedgehog Lab is looking to seize new opportunities through the growth of its London office and to build on its success in exports.
Mr Pediredla is likewise due to visit Boston with a UKTI delegation soon, with a view to potentially establishing an office in the city some time in the future.
“Our stretched turnover target for next year is £2.5m,” he added. “Finding the staff remains a major problem, but if we achieved that, then we know there would be enough work for us.
“We’ve already secured around £500,000 of work through to March and April, 2015.”