In 2004, Joey Shamah and his partner launched a cosmetics company built on an idea that made almost no sense:

Sell high-quality makeup for just $1.

At the time, high quality beauty products were supposed to be expensive. The biggest brands spent fortunes on celebrity endorsements, glossy ads, and premium shelf space.

And every major retailer told Joey the same thing:

Your idea will never work.

But Joey believed he'd found a wormhole in the beauty business: spend money on the product, not fancy packaging, marketing, or celebrity endorsements. Then, pass those savings on to your customers.

The brand grew slowly, but Joey knew he was onto something when a bizarre rumor spread that Bloomingdale's was buying e.l.f. and raising prices. Within days, the tiny company went from a few hundred orders a week to 18,000 orders a day.

What followed was a journey from a scrappy warehouse operation in New Jersey to one of the most disruptive brands in the beauty business.

You'll learn:

• The surprising economics behind $1 lipstick
• Why retailers initially rejected e.l.f.
• How a single magazine mention launched e.l.f.'s online business
• The retail insight that unlocked national expansion
• How a false rumor generated 18,000 orders a day
• The emotional toll of a $225 million acquisition that collapsed at the eleventh hour

Timestamps:

• 00:10:28 — How to make (decent) makeup for just $1
• 00:18:35 — The dollar stores say no
• 00:24:32 — Glamour comes calling, and e.l.f has 30 days to build a website
• 00:38:27 — The question from a Target buyer that leaves Joey speechless
• 00:39:56 — The H-E-B test that proves everyone wrong
• 00:46:36 — “That’s news to me!” The viral rumor that sends Joey back to China
• 00:59:42 — Scaling to tens of millions in revenue
• 01:07:15 — “It was crushing.” The L’oreal sale that never happened
• 01:12:02 — After e.l.f: Joey stops watching House of Cards and gets back to business

This episode was produced by Carla Esteves with music composed by Ramtin Arablouei.

It was edited by Neva Grant with research by Olivia Rockman. Our audio engineer was Patrick Murray.

Follow How I Built This:

Instagram → @howibuiltthis

X → @HowIBuiltThis

Facebook → How I Built This

Follow Guy Raz:

Instagram → @guy.raz

Youtube → guy_raz

X → @guyraz

Substack → guyraz.substack.com

Website → guyraz.com

Today’s callers: Ruchi from Chicago looks for advice on which channels to focus distribution for her probiotic skincare line. Then Peter in San Francisco considers strategies to champion his line of organic South African wines. And Dominic from Barbados asks about expanding his specialty coffee brand into international markets like the United States.

Plus, Susan discusses how people and relationships can make or break your business.

Thank you to the founders of Yobee, Culture Wine, and Wyndhams Bajan Coffee Roasters for being a part of our show.

If you’d like to be featured on a future Advice Line episode—where Guy and former show guests take questions from early-stage founders—leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to hibt@id.wondery.com or call 1-800-433-1298.

And be sure to listen to EO Products founding story as told by Susan Griffin-Black and Brad Black in 2019.

This episode was produced by Casey Herman with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Robert Rodriguez.

You can follow HIBT on X & Instagram and sign up for Guy’s free newsletter at guyraz.com or on Substack.

Stephen Starr didn’t plan to get into the restaurant business.

He set out to be a radio DJ. Then a nightclub owner. Then a music promoter.

Along the way, he booked a young Jerry Seinfeld for $75, promoted shows for U2 and Madonna, and spent years pretending to be more successful than he really was.

Then, in his late 30s, Stephen walked into a glitzy martini bar in New York.

He was so taken with it, he decided to start his own version in Philadelphia.

Today, Starr Restaurant Group generates nearly half a billion dollars in annual revenue and includes some of the most successful independent restaurants in America: Pastis, Buddakan, Le Diplomate, Parc, Makoto, and dozens more.

The surprising part?

Stephen did not start out as a foodie.

Instead, he became obsessed with the theatre of dining: design, upholstery, lighting, music. A “wow!” feeling when you walk in the door.

In this conversation with Guy, Stephen talks about the hard lessons he learned in the comedy and music business, and the unexpected path he took to redefining dining.

What You'll Learn:

• The unglamorous economics of rock concerts and restaurants
• How rejection, romantic heartbreak, and failure can become powerful motivators
• Why he believes he's spent his career "throwing the party" without attending it
• How building the right team of designers can make a restaurant feel magical
• Why Stephen says today's entrepreneurs have a much harder path than his generation did
• The model Stephen says new restaurateurs should follow today

Timestamps:

• 00:06:03 — A lonely childhood: Making up skits in his room
• 00:09:49 — Losing his mother at age 19
• 00:11:17 — Starting a comedy club: Deli by day. Stand up at night
• 00:20:49 — Going broke and reneging on a bank loan
• 00:28:26 — Music promotion: Feeling like a fraud while promoting U2, Madonna
• 00:36:52 — A New York martini bar inspires Stephen to start his own
• 00:42:20 — The bold design behind a line-out-the-door restaurant
• 01:03:31 — Opening Buddakan in New York: “I can’t do anything better. This is Sgt. Pepper”
• 01:09:08 — Starting a restaurant today: “I would say don’t do it … but if you do, keep it smaller”

This episode was produced by Alex Cheng with music composed by Ramtin Arablouei. It was edited by Neva Grant with research by Sam Paulson. Our audio engineers were Patrick Murray and Robert Rodriguez.

Follow How I Built This:

Instagram → @howibuiltthis

X → @HowIBuiltThis

Facebook → How I Built This

Follow Guy Raz:

Instagram → @guy.raz

Youtube → guy_raz

X → @guyraz

Substack → guyraz.substack.com

Website → guyraz.com

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.