At The Nerdery, a quirky culture fills a niche
Finance & Commerce, by Arundhati Parmar
Company is hiring and expanding into new space
The U.S. Department of Labor recently reported that the Twin Cities region was among five metropolitan areas adding the most jobs in December - 17,000-plus.
One contributor is The Nerdery. The web development company added nine jobs in December and another 18 in January. But the company started 2010 with 101 employees and has 183 today, with hopes of hiring more than 100 this year.
Who wouldn’t want to work at a company that offers unlimited sick time and free breakfast, and allows pets and beer kegs on its premises?
In fact, The Nerdery has been growing at such a breakneck speed that every 12 to 18 months the company runs out of space and must expand. It is amid an expansion right now, said the chief executive and co-president, Mike Derheim.
The company recently renewed a lease at 9555 James Ave. S. that more than doubles its space, to 44,625 square feet from 21,401 square feet.
Employees are currently split in two locations as contractors complete Phase 1 of the expansion, expected by April 1. This is the sixth major expansion the company has undergone, Derheim said in an interview.
The company’s landlord, Belgrade Enterprises, has a contract with a California agency called the Design Partnership to be the space planner. Brooklyn Park-based Egan Co. will handle the major construction work, Derheim said.
The Nerdery’s share of the project is a little more than $100,000, but the landlord is also investing in the work.
“We have wrapped a lot of the build-out expenses in the lease,” Derheim said. “We signed up for a little bit longer lease, so the landlord is investing pretty significantly in this build- out, which is unique.”
The Nerdery’s growth is coming from an ever-increasing appetite for the company’s development services. Nerdery developers are adept at creating mobile applications for popular devices like the iPhone and the countless other mobile phones built on Google’s Android operating system. The other source of growth is web development - applications for sites like Facebook, as well as microsites for specific client needs.
The company works mainly with ad agencies that do not have in-house development expertise to fulfill the needs of clients. But The Nerdery also works directly with end customers by interacting with mid-size businesses and marketing departments inside larger companies.
The strategy appears to be paying off. Last year, the company had $16.4 million in revenue, up from $8.6 million in 2009. It was also the most profitable year in its eight-year history, although Derheim did not provide more details on profits.
Last year, the company ventured out of state by opening an office in Chicago to replicate the agency model and some of its free-wheeling culture. The Chicago office has 10 employees.
The outlook has not always been upward and onward. The company had its share of recession woes, laying off seven employees, or 9 percent of its work force, in May 2009.
A local tech blogger and marketing consultant chalks up The Nerdery’s success to its niche.
“They get plenty of repeat business, and what they have done well is mined the marketing and ad agencies that need what they have,” said Graeme Thickins, the consultant. “Many of those agencies downsized and got rid of in-house developers in the early 2000s - just when (The Nerdery) was getting started.”
Derheim credits something else for the company’s rapid growth.
“Honestly, I believe that the culture that we have created here is a huge part of our success,” Derheim said. “Things like having the dogs in the office and beer kegs and the strange benefits we have are absolutely critical to our success.”
The expansion comes after a terrible loss. In November, the company’s co-founder and president, Luke Bucklin, and three of his sons were killed in a plane crash in the mountains of Wyoming. Derheim, one of the original founders, assumed the leadership mantle.
While people are still grieving the loss of Bucklin, Derheim said, the leadership culture he encouraged is carrying on the company’s goals.
“Luke kind of had this idea … we needed to distribute leadership throughout the organization, so that Luke, or myself, or … our other partner, wouldn’t be pivotal in the growth or in sustaining the organization,” Derheim said. “Even though we didn’t plan for an event like this, we have generally run the company in a way that makes it easier to carry on after something like this happens.”
Thickins discovered that egalitarian approach when he noticed “co-president” on an online job profile for an employee, something that initially surprised him. Then he realized that it was the company’s culture - Bucklin had promoted all employees to co-presidents.
“I knew he hadn’t been there that long to get a promotion that quickly,” Thickins recalled. “They’ve got a unique culture … and I have no reason to think that they won’t continue on with his legacy. I think they have a very strong management team.”
Derheim plans to do more than just continue on.
The head-count goal for this year is around 300, and the revenue target is $30 million.
That optimism and an appreciation of employees were apparent in an e-mail message Derheim sent to them on Jan. 5.
“We’ve got more momentum than ever before and more smart people than any organization has a right to - we’re blessed with an embarrassment of riches,” Derheim said.
The Nerdery’s growth spurt
Employees, up from 101 in 2010
2010 revenue, nearly double the $8.6 million in 2009
Headcount, revenue goals for 2011
Office: (952) 948.1211 x1069
Cell: (612) 850.3178