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1xRUN team building turns startup into second-stage star

There is a difference between building a startup with a small group of people, and growing a company that employs a number of people. Jesse Cory knows all about making the jump from one to another.

1xRUN, the online art sales startup he guides as CEO, has grown rapidly in its four years. The Detroit-based company, it calls Eastern Market home, consistently hits double-digit revenue gains and is hiring all the time. It has a staff of 24 employees and is looking to hire a communications director. However, that growth has become a double-edged sword.

"We were six employees and then 20," Cory says. "We needed to figure out how to make that work and create different departments."

1xRUN made that jump in a matter of months. To keep up it needed to bring in people who knew how to handle accounting, human resources, and other mundane business tasks that most entrepreneurs don't think about when they are dreaming of startup success.

To get over that hump 1xRUN hired a business manager. That person hired the right people through her own network quickly and effectively.

"We found the right person with a great network," Cory says. "It changed everything for us."

And she took it to second-stage status quickly. 1xRUN is so far down the grownup business road that it just made its first matching deposit into an employee 401K program.

"I never even thought I would have a 401K," Cory says. "When you're a freelancer and entrepreneur you don’t have to think about those retirement vehicles."

Cory was thinking about disrupting how people sell art when he launched 1xRUN. The startup sells limited-edition prints and other pieces by contemporary artists online. This system creates scarcity for its artwork, yet its pieces are easily accessible and affordable.

A couple of years ago it was selling two or three new releases each week. That number is now at five a week and still growing. That means it hit 100 percent revenue growth in its first year, 95 percent in its second, and 35 percent in its third.

"We're launching a new product in 2016," Cory says. "I suspect it will produce 25 percent growth so we’re aiming for 50 percent growth in 2016."

That new product is an art subscription service where buyers can receive a box of curated art in the mail each month. The art box subscription would join a handful of other revenue streams at 1xRUN. The startup generates revenue from its online art sales, sales at its own Inner State Gallery in Eastern Market, wholesale printing services, and creative services, such as commissioning murals for large clients.

"Currently we're doing mural projects in London, Los Angeles and Chicago," Cory says.

1xRUN is also looking to update its online and mobile presence this fall. It will launch a revamped website and significantly improve its mobile services.

"Fifty percent of all of our sales are on mobile and we don't have a mobile shopping environment," Cory says. "In 2016 we plan to change that. We believe mobile will drive our future growth."

Welcome to the Year of the Gazelle, an exploration of the fastest-growing startups in southeast Michigan by the Startup team and the New Economy Initiative for Southeast Michigan (NEI). Not only will we identify the local gazelle companies that are perfecting innovative new products, creating jobs, and generating lots of revenue, we will give you a full accounting of each one. The stories behind the entrepreneurs that build these businesses. The investors that back them. The resources they leverage. How they have all worked together to build Metro Detroit's new economy, and how they plan to do it in the future. In return we will only ask you to do one thing: keep up.

- Written by Jon Zemke

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