e.l.f. Cosmetics: Joey Shamah. The Dollar Store Formula That Built a Cosmetics Giant

**Guy Raz** (0:00)
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Okay, so $5.99, whatever, flat rate, and you're going to sell it through the website. Again, it's complicated. And but the other question to have is, how are you going to handle the logistics? I mean, you have it sitting in a warehouse, but who's going to package the stuff up and send it out?

**Joey Shamah** (4:27)
So honestly, we didn't even think about logistics. We were just following Glamour magazine's lead. They wanted us to make a website so we could get in the magazine.
We didn't think we were going to get an order.

**Guy Raz** (4:46)
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Raz, and on the show today, how Joey Shamah started a dollar cosmetics brand that turned into a billion dollar business.
Among the 33 cars that lined up to race the Indy 500 this year, one was particularly notable. It was painted in shades of pink, and its driver, the only female competing this year, Catherine Legg. But perhaps as notable as the driver was the car's main sponsor, not Pennzoil or Firestone or Coors Light, but rather Elf Cosmetics, the first time ever that a beauty brand sponsored an Indy car. And if you know something about Elf, that's not entirely surprising, because Elf was essentially built as a disruptor brand back in 2004 At that time, people either bought cosmetics at the drugstore, where they were cheap, or at the department store, where they cost a lot more. And the assumption was that price equaled quality. Drugstore makeup just wasn't as good as the high-end stuff. But when Elf launched, it up-ended that model. At the time, discount makeup cost about 5 or 6 bucks for a lipstick or blush. But Elf products, all of them, cost a dollar. And the thing is, they didn't look or feel cheap. And it meant that customers could take a risk of trying out more of their products, which made the brand particularly popular with teens and tweens. When Joey Shamah and his original partner, Scott Vincent Borba, started Elf, they ran into a lot of roadblocks. For starters, the big box retailers weren't interested. They didn't think there was a market for their products. But within a few years, the brand started to gain traction. Joey sold most of the company back in 2014, but he managed to scale it to a pretty successful brand in 10 years. And today, Elf is publicly traded with a market cap of around $4 billion.