The Idea
In 2003, Joey Shamah was a twenty-something NYU Stern graduate from a tight-knit Brooklyn merchant family, working in and around his father Alan's private-label apparel business, the one that had done manufacturing for Target. Then his wife came home with a shopping bag and a $200 receipt for five pieces of makeup.
That receipt did something. Shamah knew what things cost to make. He'd grown up around purchase orders, sourcing, and margins, and he understood that a lip gloss selling for six dollars didn't cost six dollars to produce. The formula was cheap. What you were actually paying for was the celebrity spokesperson, the magazine ads, the shelf fees, and decades of corporate overhead baked into the price.
So he asked the obvious question nobody in beauty was asking: what if you stripped all of that out and sold quality makeup for a dollar? Not as a gimmick, but as the entire business model. Lean SKUs, direct sourcing, sold online before anyone sold beauty online. This was the beginning of e.l.f..
The Execution
- June 2004: Shamah, his father Alan, and makeup artist Scott Vincent Borba launched e.l.f. ("eyes, lips, face"), selling quality cosmetics direct-to-consumer at $1, $3, and $5, reportedly started with around $30,000. Every major retailer told them nobody wanted dollar makeup.
- Late 2004: Glamour came calling, offering a concealer a magazine spot on one condition: that all 2 million subscribers could actually buy it. They built e-commerce infrastructure on the fly. Glamour featured them seven more times; DailyCandy drove 300 orders on day one.
- September 2006: Someone Shamah never identified sent a mass email falsely claiming e.l.f. was being bought by Bloomingdale's and prices were rising. Orders exploded from ~50 a day to 18,000. He flew to China to scale supply. That year they'd projected $2M in revenue and finished at $8M, turning their first profit.
- The fear was cannibalization: For years the real obstacle wasn't that retailers disliked the product. They were afraid of it. A $1 gloss next to a $6 CoverGirl looked like lost revenue. Then H-E-B tried it and emailed the next morning: e.l.f. wasn't stealing customers, it was creating new ones. That single data point became the whole pitch.
- 2011 & 2014: TSG Consumer Partners took a stake, then in February 2014 [TPG Growth acquired a majority stake](https://makeup-and-skincare.fandom.com/wiki/E.l.f.) for a reported $200–300M. Shamah stepped aside and consumer-goods veteran Tarang Amin became CEO. Along the way, a $225M L'Oréal handshake collapsed at the last minute, and Joey went back to running the business.
- September 2016: e.l.f. IPO'd on the NYSE at $17 a share, above its $14–16 range, raising ~$141M. The stock jumped roughly 56% on day one.
- 2023–2025: e.l.f. [acquired Naturium for $355M](https://makeup-and-skincare.fandom.com/wiki/E.l.f.), crossed $1B in revenue, and in 2025 [announced the acquisition of Hailey Bieber's Rhode](https://en.wikipedia.org/wiki/E.l.f.) for up to $1B, now contributing ~$500M in annualized retail sales.
- Today: e.l.f. posted FY2026 revenue of $1.64B, up ~25%, its 29th straight quarter of sales growth, and carries a market cap around $4.4B, built on a product that once cost a dollar.
The lesson?
Shamah's edge was never the makeup; the formula cost the same as everyone else's. His edge was understanding that the price of a lip gloss is mostly overhead you can choose to delete. And when the retailers finally said yes, it wasn't because e.l.f. was better; it was because the H-E-B data proved a $1 product didn't steal customers, it minted new ones. The best disruptors don't win the incumbent's argument. They change what's being measured.