Podcast Summary

Podcast: The Foundr Podcast with Nathan Chan
Episode: 603 – "He Built a $1B Beauty Brand Selling $1 Makeup | Joey Shamah"
Date: November 6, 2025
Guest: Joey Shamah, Co-founder of e.l.f. Cosmetics

Episode Overview

This episode features Joey Shamah, co-founder of e.l.f. Cosmetics, the billion-dollar beauty brand that disrupted the industry by offering quality cosmetics for just $1. Nathan Chan digs into Joey's entrepreneurial journey, the origin of e.l.f., the challenges faced breaking into the market, transformative moments fueling explosive growth, lessons from taking e.l.f. public, and his approach to new ventures. Joey's story is a masterclass in spotting overlooked opportunities, leveraging grit, and turning setbacks into radical business wins.

Key Discussion Points & Insights

Early Influences and Origins

[02:01–05:29]

• Joey grew up in a family of immigrants and entrepreneurs—his father built an apparel manufacturing business from the ground up.
• While interning for his father, Joey realized he wanted to build a brand, not just manufacture for others.
• Trends in Dollar Store retail spurred the idea: “We identified a sector before we identified a product line.” (Joey Shamah, 04:29)
• Dollar store makeup offerings were “either closeouts… or non-branded brands—stuff you wouldn’t want to put on your face.” Joey saw white space for high-quality, branded, affordable cosmetics.

Launching e.l.f. (& Proving the $1 Model)

[05:29–08:16]

• Initial investment: $125,000 to purchase inventory across 13 categories/67 SKUs.
• Joey emphasized stripping away excess and unnecessary costs: “We stripped all that out… sourced a line of 13 categories across 67 SKUs… it was about $125,000 of inventory.” (06:35)
• Retailers (like Dollar General) rejected e.l.f.’s pitch—forcing the team to seek other avenues.

Scraping into the Market: Press, Virality, & PR

[08:16–13:15]

• Hired a PR firm, directly brought samples to beauty editors at Glamour and Lucky—without mentioning price upfront.
• After feature requests, e.l.f. rushed to add ecommerce to their website in 2004.
• The breakthrough: a one-liner in Daily Candy spurred 400 orders overnight—an early sign of product-market fit.
• Early DTC success was punctuated by press-driven sales spikes and the brand’s first-ever million-dollar sales year.
• H-E-B grocery chain was the first retailer to prove e.l.f. was “incremental sales” (not just cannibalizing more expensive products).

Managing Margins & Lean Operations

[13:15–15:00]

• Standardized pricing and packaging: everything retailed for $1, costs ranged per product, creating an average, sustainable margin.
• Operated with a tiny, multi-tasking team; Joey personally handled customer service and sourcing.

The Bloomingdale's Rumor—A Viral Turning Point

[15:00–19:54]

• An unfounded rumor that e.l.f. was raising prices after a Bloomingdale’s acquisition went viral.
• Joey recalls: “All of a sudden, I hit refresh—and there’s another 20 pages of orders. It was Friday afternoon… After the New Year ended, we logged on. We had 20,000 orders.” (16:47)
• Orders swelled to 192,000—forcing Joey to fly to China, set up global fulfillment, and bring in family to help. Sales grew from $2 million to $8 million, moving e.l.f. into profitability for the first time.
• “We were never the same company after that.” (19:38)

Scaling Up: Retail Expansion & Strategic Product Lines

[20:35–25:14]

• Early “test” relationships with Target grew after viral waves, leading to full end-cap launches and eventual shelf space (e.l.f. and their new “Studio” line).
• Data proved e.l.f. could lift customer spend rather than cannibalize more expensive brands.

The Retail vs. Online Growth Dilemma

[25:14–28:04]

• Strategies were always reactive and opportunistic: “If you can’t bob and weave, you’re not going to be successful.” (25:32)
• DTC allowed e.l.f. to test higher price points—selling out online with higher price “dupes” proven by customer demand.

Exiting, Selling, and IPO Lessons

[28:04–36:55]

• Joey and his father sold 49% of the company in 2010 for $35 million. In hindsight, he’d have sold less: “I never regretted the first sale, but I did regret how much we sold.” (36:45)
• L’Oreal nearly acquired e.l.f., but pulled out at the last minute—a “blessing in disguise.”
• TPG bought a majority stake at a $265 million valuation, bringing in a professional management team (Tarang Amin as CEO).
• IPO in 2016 at a $1+ billion valuation: “I’ll never forget ringing that bell in Wall Street.” (34:32)

Emotional and Financial Complexity of Exiting

[34:52–36:55]

• IPO = validation, not only a financial endpoint.
• “There’s not a big difference to have $10 million or $30 or $50 million... It just feels more gratifying doing it over and over.” (35:38)

Life After e.l.f.—The Entrepreneur’s Restlessness

[37:20–38:27]

• Brief “retirement” led to depression (“In that moment, I knew that retired life wasn’t for me.”)
• Bought and revitalized distressed brands, applying e.l.f.-born strategies around differentiation and operational discipline.

New Playbook: Acquiring & Revitalizing Brands (AS Beauty)

[39:10–42:27]

• Bought Laura Geller, Julep, and more, using learnings from e.l.f. (“We leaned into QVC... did SKU rationalization, grew margins, bootstrapped as entrepreneurs.”)
• $500M sales across AS Beauty brands, operated with lean, entrepreneurial methods.

Philosophy: Luck, Opportunity & Imperfection

[42:27–44:21]

• “Obstacles can either hold you back or be stepping stones.”
• “Perfection isn’t an option. I’d rather get something out and fix it than wait.” (43:36)

Beauty Trends, Consumer Power, and Saturation

[44:21–47:11]

• Social media and TikTok have created a new, ultra-educated customer base.
• Clean, sustainable products are now “table stakes.”
• “You just have to have the white space, you have to be different… can’t differentiate alone on price. Have to have… functional end benefits and an engaged community.” (46:45)

Advice for Founders: Growth Is Incremental

[47:34–48:15]

• “Life is a journey, not a destination… don’t look at how you go from 1 to $100M. First you go to 1, then 5, then 10, and then 100.” (47:46)

Entrepreneur’s Financial Mindset Shift

[48:30–50:50]

• Learning to manage to EBITDA, not just net income, once private equity/partners are involved.
• “The day after the deal is the day you have to live with for the rest of your life. Don’t just focus on closing the deal, plan for what comes next.” (49:50)

Notable Quotes & Moments

• On Disruption:
  “Why are you asking me why I can’t do it? Why aren’t you asking the big conglomerates why they can’t do it?” (Joey, 06:11)

• On Virality:
  “All of a sudden, I hit refresh—and there’s another 20 pages of orders. It was Friday afternoon… We had 20,000 orders.” (Joey, 16:47)

• On Luck:
  “Success is when luck meets opportunity.” (Joey, 29:20)

• On Perfection:
  “Perfection isn’t an option… I’d rather get something out and fix it than…wait.” (Joey, 43:36)

• On Community:
  “We don’t dictate to the customer, but we develop relationships with her and we listened to her.” (Joey, 26:05)

• On Selling/Escaping:
  “There’s not a big difference to have $10 million or $30 or $50 million… But when you do it time and time again, it just feels more gratifying.” (Joey, 35:38)

• On Incremental Growth:
  “Don’t look at how you’re going to go from 1 to $100M, but first you got to go to 1, then 5, then 10, then 100.” (Joey, 47:46)

Timestamps for Key Segments

• Joey’s background & influence: [02:01–05:29]
• Initial launch & investment: [05:29–08:16]
• Early PR & ecommerce breakthrough: [08:16–13:15]
• Margin management & lean operations: [13:15–15:00]
• Bloomingdale’s rumor/viral moment: [15:00–19:54]
• Retail expansion with Target: [20:35–25:14]
• Strategic pivots: DTC & product launches: [25:14–28:04]
• Selling, L’Oreal offer, IPO: [28:04–36:55]
• Life after e.l.f., new ventures: [37:20–42:27]
• Entrepreneurial mindset & trends: [42:27–47:11]
• Advice on growth: [47:34–48:15]
• Managing with investors/EBITDA: [48:30–50:50]

Memorable Moment

• The viral Bloomingdale’s false rumor
  • Joey’s team received a phone call alerting them: “I just got an email you’re being bought by Bloomingdale’s and all the prices are going up.” As the panic-buying fever swept across the web, Joey’s family and team scrambled to fulfill 192,000 orders—cementing e.l.f.’s status as a phenomenon. (15:53–19:54)

Final Advice for Founders

• “Obstacles can either hold you back or be stepping stones—leverage them to take you to the next level.” (Joey, 42:47)
• “Life is a journey, not a destination. Don’t skip steps; focus on incremental gains.” (47:34)
• “The day after the deal is the day you have to live with for the rest of your life… plan for what comes next.” (49:50)

This rich, honest conversation is essential listening for anyone building a business in consumer, CPG, or e-commerce today. Joey Shamah’s journey is a testament to the power of doing the opposite, pushing through setbacks, and continuously learning—even after headline-level success.