How e.l.f. Beauty Maintains Startup Spirit While Dominating the Cosmetics Market
Hbr.org Daily•2 weeks ago•
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How e.l.f. Beauty Maintains Startup Spirit While Dominating the Cosmetics Market

Entrepreneurship
e.l.f.beauty
startupculture
employeeengagement
innovation
cosmetics
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Summary:

  • e.l.f. Beauty became the top-selling mass cosmetics brand in 2024, focusing on speed and ambition.

  • The company maintains a startup mentality to drive innovation and growth.

  • Founded by Alan and Joey Shamah, e.l.f. disrupted high cosmetics prices with $1 products.

  • Community engagement drives product development, exemplified by their rapid response to consumer feedback.

  • e.l.f. promotes a collaborative culture with annual stock grants for all employees.

In 2024, e.l.f. Beauty emerged as the top-selling mass cosmetics brand in the U.S., achieving a remarkable milestone. Rather than celebrating, the team immediately shifted focus to becoming the number one brand. This relentless ambition has been integral to e.l.f.'s culture since its inception two decades ago, driving the company to operate with a startup mentality even as it scaled.

Beginnings

The vision of Alan and Joey Shamah, the founders of e.l.f., was to disrupt the high price points in cosmetics by offering products at just $1 each. Their journey began when they realized the quality of their affordable products attracted significant attention, leading to a viral brand launch in 2004. Under the leadership of CEO Tarang Amin, e.l.f. has seen 22 consecutive quarters of growth, with net sales surpassing $1 billion in fiscal 2024.

The e.l.f. Ethos

e.l.f. operates on the principle of creating a beauty company that emphasizes positivity, inclusivity, and accessibility. The commitment to innovation has allowed them to offer high-quality alternatives to prestige products at a fraction of the price. For example, when a prestige brand sold a $54 primer, e.l.f. responded with a similar product at just $10.

Community Engagement

The brand thrives on feedback from its community, adapting quickly to consumer needs. For instance, an affordable alternative to a $40 lip oil was developed and launched just six months after its conception based on customer demand.

Team Culture

At e.l.f., every employee is treated as an owner, with annual stock grants starting at $15,000 for junior team members, promoting a unified, collaborative culture. This approach has resulted in 90% employee engagement, fostering a passionate, high-performance team.

The Future

As e.l.f. continues to expand globally, it remains committed to its core values, with the mantra: “Anything is e.l.f.ing possible.” The company measures success not just by financial growth but by employee engagement and satisfaction, ensuring that its unique culture is preserved as it scales.

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