WEBVTT - Tarang Amin: “Embrace what you think is risky.” 0:00:01.760 --> 0:00:06.160 You're listening to Math and Magic, a production of iHeartRadio. 0:00:08.480 --> 0:00:12.200 I'm constantly making a six. You're constantly learning, learning on 0:00:12.320 --> 0:00:16.639 these small failures so it avoids the big, big. 0:00:16.400 --> 0:00:17.040 Big miss. 0:00:17.440 --> 0:00:20.400 And so for me, the way I approach risk is 0:00:21.280 --> 0:00:27.160 encourage an organization to embrace innovation, to embrace change, constantly 0:00:27.160 --> 0:00:31.000 try things, and actually make it okay to fail, Actually 0:00:31.000 --> 0:00:34.400 celebrate those failures, actually talk about those things of what 0:00:34.479 --> 0:00:37.040 we learned and what we're going to go do about it. 0:00:40.720 --> 0:00:43.720 Hi, I'm Bob Pittman. Welcome to Math and Magic. Stories 0:00:43.720 --> 0:00:46.920 from the Frontiers and Marketing. On this episode, we're going 0:00:46.960 --> 0:00:51.240 deep with someone who has the Midas touch. These transformed brands, 0:00:51.280 --> 0:00:54.880 one after the other and company after company, moving from 0:00:54.920 --> 0:00:58.959 marketer to CEO. He's created enormous shareholder returns and we're 0:00:58.960 --> 0:01:02.520 going to dig into the hows today with Terang Amin, 0:01:02.880 --> 0:01:06.560 Chairman of the board and CEO at ELF Beauty. Terang 0:01:06.640 --> 0:01:09.720 was born in Kenya moved to the US as a child. 0:01:09.760 --> 0:01:12.000 Growing up, he helped his dad run the family owned 0:01:12.000 --> 0:01:15.560 hotel in Alexandria, Virginia, and went on to Duke University 0:01:15.600 --> 0:01:18.920 for undergrad and his MBA. Like many great execs, His 0:01:19.040 --> 0:01:23.080 training ground was PNG, and he spent time running brands 0:01:23.080 --> 0:01:26.640 for Pong and others before rising to his first CEO 0:01:26.800 --> 0:01:30.839 job in twenty eleven. He's a purpose driven, passionate leader 0:01:31.040 --> 0:01:34.480 who has been driving performance for over thirty years. He's 0:01:34.520 --> 0:01:38.000 committed to diversity and also to disruption and credits Boat 0:01:38.200 --> 0:01:41.040 for his remarkable success and to put that in perspective, 0:01:41.280 --> 0:01:44.640 he has grown the Elf Beauty business five x since 0:01:44.720 --> 0:01:47.960 arriving as CEO. Terang, Welcome, Well, thank you for having me. 0:01:48.360 --> 0:01:51.480 I want to dig into your story and it's fascinating story, 0:01:51.680 --> 0:01:53.840 but first I want to do you in sixty seconds. 0:01:54.160 --> 0:01:59.720 You ready sounds great? Do you prefer cats or dogs? Dogs? Early? 0:01:59.760 --> 0:02:04.880 Ryme, nightdowl early riser? West coast or East coast, West coast, 0:02:05.160 --> 0:02:11.200 city or country city, beach or mountains, beach, coffee or tea, tea, 0:02:11.960 --> 0:02:17.400 books or movies, movies, cook or eat out, cook, call 0:02:17.520 --> 0:02:22.320 or text call. Work life balance or work life integration. 0:02:23.080 --> 0:02:26.519 Integration. Okay, it's about to get harder. All time favorite 0:02:26.600 --> 0:02:32.239 music artist, you two, favorite TV show Seinfeld, smartest person 0:02:32.280 --> 0:02:38.519 you know, Fred Cohen, childhood hero Mohamma Gandhi. Favorite sport 0:02:38.560 --> 0:02:44.680 to watch Basketball, Favorite movie shash Ank Redemption, most important 0:02:44.720 --> 0:02:48.520 piece of advice you ever got, lean in, favorite city, 0:02:49.480 --> 0:02:54.240 San Francisco, favorite place to visit Africa, and the final one, 0:02:54.760 --> 0:03:00.400 secret talent gardening. Okay, great, let's jump in now. Know 0:03:00.520 --> 0:03:02.840 this is going to be a surprise, But you're actually 0:03:03.120 --> 0:03:05.480 not the first guest who grew up in their family motel. 0:03:05.880 --> 0:03:09.440 Shaji Vishram, the founder of Happy Baby, the organic baby 0:03:09.440 --> 0:03:12.399 food company, grew up in the family motel and Alabama 0:03:12.520 --> 0:03:16.760 Rooms one twenty three, and like you, she said, it 0:03:16.800 --> 0:03:20.440 taught her so much about life and business. So I 0:03:20.480 --> 0:03:23.600 am fascinated by this story. So can you paint the 0:03:23.639 --> 0:03:28.160 picture of that experience for you? Growing up in a motel, 0:03:28.560 --> 0:03:31.600 working all the time with your family, That was. 0:03:31.639 --> 0:03:34.400 A pretty formative experience for me. So when I was fourteen, 0:03:34.440 --> 0:03:36.840 we sold our house, took every penny we had, and 0:03:36.880 --> 0:03:39.920 we bought our first hotel on Route one in Alexandria, Virginia. 0:03:40.360 --> 0:03:43.320 We moved right into the manager's apartment, and our business 0:03:43.320 --> 0:03:45.920 model as a family was we'd find these distressed properties, 0:03:46.000 --> 0:03:48.640 we'd fix them up. We're good operators, and we kept 0:03:48.640 --> 0:03:51.760 building from there. You did everything. If the maze didn't 0:03:51.760 --> 0:03:54.280 show up, you made the rooms you rented, the rooms 0:03:54.360 --> 0:03:57.120 you renovated. It was such an important experience for me. 0:03:57.240 --> 0:04:00.520 Probably the most important is how you treat people. Because 0:04:00.560 --> 0:04:03.000 there were small motels or more on the budget side, 0:04:03.240 --> 0:04:05.920 we didn't have like high wages or other things, so 0:04:05.960 --> 0:04:08.240 it really came down to how did you motivate people 0:04:08.320 --> 0:04:12.720 who were oftentimes hourly and how did you incent kind 0:04:12.720 --> 0:04:15.800 of our managers over time in terms of you know, 0:04:15.800 --> 0:04:18.560 we had a model that if they hit certain criteria, 0:04:18.880 --> 0:04:21.200 we'd help finance their own property. So it was a 0:04:21.200 --> 0:04:24.200 great leg up and a way for them to really 0:04:24.279 --> 0:04:27.560 change their families' lives as well. I had a pretty 0:04:27.560 --> 0:04:30.400 classical career after that and large consumer goods, but I 0:04:30.480 --> 0:04:34.120 tell people everything I know about cash flow, economic profit, 0:04:34.279 --> 0:04:37.599 how you treat people really came from building our motel 0:04:37.640 --> 0:04:39.840 business up with my dad, and I did that from 0:04:39.880 --> 0:04:43.119 fourteen to about my mid twenties. Many many years later, 0:04:43.480 --> 0:04:46.000 I still pull from those experiences. My gosh, we could 0:04:46.000 --> 0:04:48.120 probably go on the entire podcast for everything I learned 0:04:48.160 --> 0:04:48.839 to the motels. 0:04:49.279 --> 0:04:51.040 In the nineteen nineties, I was on the board of 0:04:51.080 --> 0:04:54.000 a company called HFS which had a number of brands 0:04:54.040 --> 0:04:57.960 for motels, and I was always struck with that over 0:04:58.080 --> 0:05:01.600 representation in the ownership families. Why is that? 0:05:02.200 --> 0:05:04.360 You know, as you mentioned in your opening, we were 0:05:04.360 --> 0:05:07.480 immigrants from East Africa, and there are a number of immigrants, 0:05:07.520 --> 0:05:09.920 particularly when Idiamine came to power in Uganda and kicked 0:05:09.920 --> 0:05:13.240 all the Indians out, Kenya, other countries that immigrated to 0:05:13.279 --> 0:05:17.160 the US, and a lot of times where they kind 0:05:17.160 --> 0:05:20.040 of left behind whatever their original profession was or their 0:05:20.120 --> 0:05:23.760 business people. The motels were actually a really good model 0:05:24.040 --> 0:05:28.360 because with a limited amount of capital you could get alone. 0:05:28.800 --> 0:05:31.960 You could then actually not only live there, but earn 0:05:32.000 --> 0:05:34.440 a living and be able to go from there. So 0:05:34.600 --> 0:05:38.320 we're in India. Our ethnicities Gadratis, and a lot of 0:05:38.320 --> 0:05:41.039 Gadratis got into the motel business. I think it's still 0:05:41.080 --> 0:05:43.920 a huge proportion of the motels in the US are 0:05:43.920 --> 0:05:48.000 owned by Gadratis. And like any immigrant family, immigrant community, 0:05:48.120 --> 0:05:51.440 when someone gets into it, others learn that there's something 0:05:51.680 --> 0:05:55.240 there and so I'm not unique in having that experience. 0:05:55.320 --> 0:05:57.920 There are number of Ztratis in the US that also 0:05:58.360 --> 0:05:59.840 had their start in these motels. 0:06:00.200 --> 0:06:03.560 Did you ever think about staying in the business, You know, I. 0:06:03.520 --> 0:06:05.720 Didn't and my parents didn't want me to either. There 0:06:05.760 --> 0:06:08.799 was a real focus, particularly drive the community on education, 0:06:09.400 --> 0:06:12.080 and so my parents were very set and I was 0:06:12.200 --> 0:06:16.479 very set on going to university, going to grad school, 0:06:16.880 --> 0:06:19.720 figuring out what I really wanted to do. And so 0:06:20.080 --> 0:06:24.080 I would say it never was an aspiration as much 0:06:24.080 --> 0:06:26.960 as I learned from it, I was definitely interested in 0:06:27.120 --> 0:06:29.039 wanting to explore the world and do different things. 0:06:29.440 --> 0:06:31.479 You were obviously a good student. You went off to 0:06:31.560 --> 0:06:35.200 Duke for undergrad and grad school too, and you have 0:06:35.240 --> 0:06:38.000 an interesting story when you applied to the graduate School 0:06:38.000 --> 0:06:40.600 of Business when you were still an undergrad and they 0:06:40.680 --> 0:06:42.920 told you you had no business experience. 0:06:43.200 --> 0:06:45.440 How did you use that motel experience to become that 0:06:45.480 --> 0:06:49.120 objection the dean of admissions. Since I was an undergrad 0:06:49.240 --> 0:06:51.880 and done a lot of leadership things at Duke, you know, 0:06:51.920 --> 0:06:54.239 you told me like, no, we don't accept people straight 0:06:54.240 --> 0:06:56.760 out of undergrad. You need to go work. I basically, 0:06:56.960 --> 0:07:00.480 I think, in about twenty minutes, described what my work 0:07:00.520 --> 0:07:02.640 experience was in the motels, and it must have been 0:07:02.680 --> 0:07:06.280 persuasive enough for him to let me in a great story. 0:07:06.960 --> 0:07:12.080 A stunning number of marketing focused CEOs got their startup PNG. 0:07:12.600 --> 0:07:14.840 Actually surprising number of people that are on math and 0:07:14.880 --> 0:07:17.680 magic got their startup P ANDNG. Why is that such 0:07:17.720 --> 0:07:18.560 a fertile ground. 0:07:19.120 --> 0:07:21.440 I actually went to p ANDNG almost by accident. I 0:07:21.560 --> 0:07:25.040 did my undergraduate major in international policy. I thought I 0:07:25.080 --> 0:07:26.800 was going to go do my MBA, to go work 0:07:26.800 --> 0:07:29.360 at the World Bank, and then my name showed up 0:07:29.360 --> 0:07:31.240 on some close lists for Proker and Gamble. To be 0:07:31.280 --> 0:07:32.880 honest with you, I didn't even know what it was, 0:07:33.320 --> 0:07:36.400 but what intrigued me about it was this notion that 0:07:36.840 --> 0:07:40.120 in your mid twenties you could go run a brand, 0:07:40.320 --> 0:07:42.640 and that really appealed to me of the ability to 0:07:42.640 --> 0:07:46.680 be able to really get into every aspect of the business, 0:07:46.800 --> 0:07:50.960 the whole aspect of consumers and understanding them, being able 0:07:50.960 --> 0:07:54.000 to translate insights into action, and so I thought it 0:07:54.040 --> 0:07:58.280 was a really great experience for getting a great overview 0:07:58.320 --> 0:08:02.360 of almost every functional area moving a business forward, what 0:08:02.400 --> 0:08:05.240 the brand stood for, and so I really loved my 0:08:05.280 --> 0:08:08.160 time at PNG. It definitely was a great training ground, 0:08:08.200 --> 0:08:09.640 as many others have experienced. 0:08:10.200 --> 0:08:12.920 One of your first big successes, I guess was a 0:08:12.960 --> 0:08:15.000 p ANDNG when you were part of the team that 0:08:15.080 --> 0:08:18.360 relaunched Panteen, taking it from a I think the numbers 0:08:18.360 --> 0:08:20.920 are right. Of fifty million dollar haircare brand to a 0:08:21.280 --> 0:08:24.480 two billion dollar global market leader. How did that happen? 0:08:25.200 --> 0:08:27.520 That was a really formative experience because I spent eight 0:08:27.600 --> 0:08:28.440 years on Canteen. 0:08:28.520 --> 0:08:29.320 It was my beauty. 0:08:29.320 --> 0:08:32.280 I did almost every possible role in that business. Panteen 0:08:32.360 --> 0:08:34.959 it existed for fifty years. It was almost on its 0:08:35.040 --> 0:08:37.520 last legs. P ANDNG had gotten it through the Richardson 0:08:37.559 --> 0:08:40.880 Vicks acquisition in the mid eighties, and by the time 0:08:40.920 --> 0:08:44.560 I got on in nineteen ninety one, it still only 0:08:44.559 --> 0:08:47.320 had fifty million dollars of sales, and there was one 0:08:47.640 --> 0:08:51.840 failed relaunch after another. But the core of the brand 0:08:52.280 --> 0:08:56.160 was this intersection between health and beauty, and I remember 0:08:56.559 --> 0:09:00.160 we had a line we came out of hair so 0:09:00.240 --> 0:09:03.200 healthy it shines, And like I think many great businesses, 0:09:03.480 --> 0:09:05.920 it was the timing of a lot of things coming 0:09:05.920 --> 0:09:10.239 together at the same time. These incredible flowing hair shots. 0:09:10.360 --> 0:09:13.920 We put our two and one technology, put a conditioner 0:09:13.960 --> 0:09:16.440 on it, did a lot of fundamentals, and it just 0:09:16.480 --> 0:09:18.120 took off in the early nineties. 0:09:18.760 --> 0:09:20.400 Long straight hair is in fashion. 0:09:20.559 --> 0:09:22.920 But the best part of the Canteen story I tell 0:09:22.960 --> 0:09:25.840 people all the time is we probably hit a wall 0:09:26.000 --> 0:09:28.320 at least four times on that business where you would 0:09:28.320 --> 0:09:30.160 grow really fast and the kind of plateau out and 0:09:30.160 --> 0:09:33.679 the growing fast and platau out is that ability of 0:09:34.360 --> 0:09:39.360 discovering what was aspirational yet achievable for consumers and how 0:09:39.400 --> 0:09:41.480 we continue to pivot that brand. But it was a 0:09:41.480 --> 0:09:43.720 great experience, including help in take it global. 0:09:43.920 --> 0:09:46.640 You know, it's an interesting point you mean about hitting 0:09:46.920 --> 0:09:49.320 sort of the plateau, and I think all of us 0:09:49.400 --> 0:09:52.360 have built products. You know, you go grow, grow, grow, 0:09:52.400 --> 0:09:55.680 and then it slows down. How did you hit those? 0:09:55.960 --> 0:09:58.640 It's interesting to me because very few people get over those. 0:09:58.720 --> 0:10:01.400 That sort of is now the new high. Can you 0:10:01.400 --> 0:10:02.920 give me an example of a couple and just tell 0:10:03.000 --> 0:10:03.880 us how you got over it? 0:10:04.320 --> 0:10:06.840 I mean, heck, I'll even give you an example. In 0:10:06.880 --> 0:10:09.880 my current role at elf Beauty, very fast growing brand 0:10:10.000 --> 0:10:13.600 in twenty eighteen, we hit a wall and we couldn't 0:10:13.600 --> 0:10:15.280 figure out it. First, We're like, well is that our 0:10:15.360 --> 0:10:18.000 value equation? It's something wrong with the product. And what 0:10:18.040 --> 0:10:21.079 we realized is a bunch of mega influencer brands came 0:10:21.120 --> 0:10:26.840 into our space, the Kylie Jenner's, the Fentees, the Buddha Beautyes, 0:10:27.080 --> 0:10:30.439 And at first I thought our value proposition would insulate us, 0:10:30.440 --> 0:10:32.679 but we found that no, they were taking all the 0:10:32.720 --> 0:10:35.319 attention for consumers, and we weren't spending enough on the brand. 0:10:35.800 --> 0:10:38.080 So I think the most important thing is to step 0:10:38.120 --> 0:10:42.040 back and really get into where did we go wrong? 0:10:42.160 --> 0:10:45.360 And it starts first and foremost with myself. I remember 0:10:45.400 --> 0:10:47.319 get in front of our leadership team and saying, these 0:10:47.360 --> 0:10:48.960 are my beliefs, and let me tell you where we 0:10:49.000 --> 0:10:51.040 went wrong on each of these areas. We used to 0:10:51.080 --> 0:10:53.760 brag that our value was so great we didn't have 0:10:53.760 --> 0:10:56.760 to spend money on marketing, and I was dead wrong 0:10:56.920 --> 0:10:58.959 on that. We were getting lost in all the noise 0:10:59.200 --> 0:11:02.000 we'd gotten into retail stores. Yet many of those retail 0:11:02.000 --> 0:11:04.400 stores were in malls that would never see a better day. 0:11:04.840 --> 0:11:09.360 And then we basically got distracted. And so I think 0:11:09.400 --> 0:11:12.480 the first thing was really I always tell people we 0:11:12.480 --> 0:11:14.320 can face any reality, you just got to know what 0:11:14.360 --> 0:11:16.240 the reality is. So I think the first step is 0:11:16.240 --> 0:11:19.520 really getting a better understanding of what's what are the 0:11:19.600 --> 0:11:23.520 drivers or what's not working, and then making bold moves. 0:11:23.600 --> 0:11:26.240 I remember it was painful, but back in twenty nineteen, 0:11:26.400 --> 0:11:28.600 on the same day we shut down all of our 0:11:28.640 --> 0:11:31.680 retail stores we sent We had twenty six stores, spent 0:11:31.720 --> 0:11:35.079 twenty six leaders to every store to let people know 0:11:35.240 --> 0:11:37.520 what was going on and why we paid more than 0:11:38.040 --> 0:11:40.760 market for severance. But it was still painful letting two 0:11:40.800 --> 0:11:43.920 hundred associates go. But then we took the sixteen million 0:11:43.960 --> 0:11:46.160 dollars or spending those stores, and we doubled down on 0:11:46.200 --> 0:11:50.200 our digital business and we saw almost immediate results. 0:11:50.240 --> 0:11:52.560 So I would say two things. 0:11:52.600 --> 0:11:55.400 One, understand what the reality is, and then make sure 0:11:55.440 --> 0:11:59.120 you're taking decisive action and not just wishing that things 0:11:59.160 --> 0:11:59.760 will get better. 0:12:00.400 --> 0:12:03.400 You think it's hard, but I see this in business, 0:12:03.440 --> 0:12:06.000 and I'm seeing it watching others, certainly seeing it with myself. 0:12:06.720 --> 0:12:09.760 Hard for people to sort of own up to it's 0:12:09.800 --> 0:12:11.720 not working, we've got a problem. 0:12:11.800 --> 0:12:15.520 Yeah, I think there's a natural human tendency to wish 0:12:15.600 --> 0:12:18.400 for that it's going to get better. I feel like 0:12:18.480 --> 0:12:21.680 that's an important role for a leader because others see it. 0:12:21.800 --> 0:12:24.760 People in your organization will know when something's not working, 0:12:25.280 --> 0:12:27.480 and they want leaders who own up to it. That 0:12:27.559 --> 0:12:30.040 basically say hey guys, this isn't great. Let me tell 0:12:30.040 --> 0:12:32.280 you where I believe I went wrong, let me tell 0:12:32.320 --> 0:12:34.960 you what I'm doing about it, and it then role 0:12:35.000 --> 0:12:37.280 models others to be able to step up and say, Okay, 0:12:37.360 --> 0:12:40.880 there's nothing wrong with saying where have we failed and 0:12:41.000 --> 0:12:42.120 what do we have to do about it? 0:12:42.160 --> 0:12:44.360 And I think it brings the team together. I'm going 0:12:44.400 --> 0:12:45.760 to go back a little bit. You went on to 0:12:45.840 --> 0:12:48.560 some big successes at Clorox after P and G, and 0:12:48.600 --> 0:12:52.800 you got your first CEO shot. How did you make 0:12:52.840 --> 0:12:56.200 the jump to CEO? You were obviously doing great with 0:12:56.280 --> 0:12:59.240 the brands, great marketer, et cetera. But that's a big 0:12:59.320 --> 0:13:00.000 jump to CEO. 0:13:00.559 --> 0:13:02.080 I think one of the things that really helped me 0:13:02.120 --> 0:13:06.160 throughout my career is I started in marketing and then 0:13:06.200 --> 0:13:08.360 I went over to more of a general managed role 0:13:08.400 --> 0:13:10.959 than I went back deeper into marketing than before my 0:13:11.080 --> 0:13:13.400 first CEO role. I was a general manager over three 0:13:13.400 --> 0:13:16.120 of the divisions at Clorox, So I had a good 0:13:16.160 --> 0:13:19.559 combination of going deep in a particular area and then 0:13:19.600 --> 0:13:23.160 going broad and learning the other functional areas. And so 0:13:23.240 --> 0:13:26.000 I felt by the time I was GM of Clorox 0:13:26.080 --> 0:13:30.959 businesses Kingsford Charcoal, Hitting Valley Ranch dressings, a fresh step 0:13:31.000 --> 0:13:34.000 in litter. They were pretty autonomous. They had their own 0:13:34.040 --> 0:13:37.119 supply chain, they had their own way of kind of distribution, 0:13:37.800 --> 0:13:39.960 and so I felt like it was a good training 0:13:39.960 --> 0:13:43.959 ground for me to really make sure I was adept 0:13:44.000 --> 0:13:47.320 at the different functional areas, but more importantly, continue to 0:13:47.320 --> 0:13:50.320 hone my leadership skills. And so when my first CEO 0:13:50.400 --> 0:13:54.360 opportunity came up, it was a small company called Shift Nutrition, 0:13:54.400 --> 0:13:57.560 it was a publicly traded company, private equity backed, I 0:13:57.640 --> 0:14:00.439 felt well prepared. I knew the areas that I could go, 0:14:00.559 --> 0:14:04.280 and particularly in terms of like how we build the team. 0:14:04.480 --> 0:14:08.240 My professional background is I'm absolutely passionate about building brands. 0:14:08.720 --> 0:14:10.360 The best way in how you build brands is you 0:14:10.440 --> 0:14:12.199 lead the innovation in the category. But what I love 0:14:12.280 --> 0:14:15.800 doing the most is assembling these high performance teams. I 0:14:15.880 --> 0:14:18.600 always bragged that in thirty four years of being in 0:14:18.600 --> 0:14:20.880 the consumer space, I've never had a business we haven't 0:14:20.880 --> 0:14:23.880 grown multiples of the category. And I always attributed that 0:14:23.960 --> 0:14:26.160 back to the team and the culture that we create, 0:14:26.680 --> 0:14:29.160 and so that gave me a lot of confidence to 0:14:29.280 --> 0:14:31.320 jump in and take my first ro. 0:14:32.080 --> 0:14:34.280 I'll brag on you for a second here. You grew 0:14:34.360 --> 0:14:37.560 that enterprise value from one hundred and ninety million to 0:14:37.640 --> 0:14:40.120 one point five billion in just a couple of years. 0:14:40.120 --> 0:14:42.920 So obviously got a big success there, but you moved into, 0:14:43.040 --> 0:14:45.680 as you said, a public company. You know, part of 0:14:45.720 --> 0:14:48.720 the CEO job is running the business. The other parts 0:14:48.840 --> 0:14:51.680 dealing with shareholders A doubt in your background, you've had 0:14:51.680 --> 0:14:54.160 a lot of training on dealing with the investors. How 0:14:54.160 --> 0:14:55.680 did you learn that side of the business. 0:14:56.120 --> 0:14:59.080 Well, it definitely was a pretty steep learning curve. I 0:14:59.120 --> 0:15:03.360 remember my first earnings call it shift nutrition. I said something. 0:15:03.560 --> 0:15:05.560 I had gotten a stat from one of our team 0:15:05.600 --> 0:15:07.760 members and it was wrong, and I had to issue 0:15:08.360 --> 0:15:11.800 I think, an okay on what I said wrong. But 0:15:11.920 --> 0:15:14.920 there's no hesitancy in terms of being transparent of like, 0:15:14.960 --> 0:15:16.840 you know that was the wrong numbers. I just told 0:15:16.880 --> 0:15:19.840 you here's what it is. So I would say, you know, 0:15:19.880 --> 0:15:22.640 from that rough start, the thing that's helped me the 0:15:22.680 --> 0:15:26.560 most is I love being a CEO of a public company. 0:15:26.640 --> 0:15:28.720 A lot of people don't, but I love it because 0:15:29.160 --> 0:15:32.640 there's one hundred percent transparency. The internal story and the 0:15:32.680 --> 0:15:35.400 external story have to be the same one, and I 0:15:35.400 --> 0:15:39.840 think that interaction with investors and others makes you sharper 0:15:39.960 --> 0:15:42.240 in terms of what are people getting, what are people 0:15:42.280 --> 0:15:45.320 not getting? What is that narrative? I'd say The second 0:15:45.360 --> 0:15:48.160 thing that's been most important is some people spend too 0:15:48.240 --> 0:15:53.359 much time on the public company thing and managing investor relations. 0:15:53.880 --> 0:15:57.000 I have always had the discipline of I will never 0:15:57.080 --> 0:15:59.480 let a quarter get in the way of our long 0:15:59.560 --> 0:16:05.080 term focus and strategy, and then also constrain the time 0:16:05.560 --> 0:16:07.600 where you know you can take a life of its own. 0:16:07.960 --> 0:16:12.240 I give investor relations two days a quarter, one day 0:16:12.280 --> 0:16:15.720 in prepping for what the earnings release and the narrative 0:16:15.840 --> 0:16:19.320 and talking with investors, and then maybe a second day 0:16:19.360 --> 0:16:22.320 to do a conference or some investor relations. 0:16:22.400 --> 0:16:23.080 I feel some. 0:16:23.040 --> 0:16:27.080 Of my peers as CEO spend in an order amount 0:16:27.120 --> 0:16:28.920 of time on that part of the business, and I 0:16:28.960 --> 0:16:31.400 think if you're spending too much time on that part, 0:16:31.720 --> 0:16:33.240 it's getting in the way of where you really need 0:16:33.280 --> 0:16:35.560 to focus on, which is the team and your strategy. 0:16:37.400 --> 0:16:40.080 More of Math and Magic right after this quick break, 0:16:47.840 --> 0:16:50.000 welcome back to Math and Magic. Let's hear more from 0:16:50.000 --> 0:16:55.000 my conversations with terrag Amm. We had a real success 0:16:55.080 --> 0:16:58.200 and then you made them move to ELF. Why did 0:16:58.200 --> 0:16:58.840 you make the move? 0:16:59.640 --> 0:17:02.120 We had a great run at Shift. We ended up 0:17:02.160 --> 0:17:05.280 selling the company to Recabin Kyser. I then took a 0:17:05.280 --> 0:17:07.960 few months off and I looked at a lot of 0:17:07.960 --> 0:17:11.200 different businesses, and I'll tell you my path to ELF 0:17:11.359 --> 0:17:15.199 was a series of fortunate accidents. I was asked to 0:17:15.240 --> 0:17:18.000 take a meeting to see this private company that was 0:17:18.040 --> 0:17:20.640 going to be for sale, and at first I said, no, 0:17:20.840 --> 0:17:24.399 I'm not interested in color cosmetics. There are too many brands, 0:17:24.760 --> 0:17:27.800 too low barriers of entry. It really wasn't interested in 0:17:27.840 --> 0:17:30.920 the category. But I also have an adage that says 0:17:31.040 --> 0:17:34.080 never hurts to have a conversation, So under that rule, 0:17:34.160 --> 0:17:37.280 I said all right, I'll take the meeting and instantly 0:17:37.320 --> 0:17:39.800 fell in love with the business. Actually, today's my eleventh 0:17:40.119 --> 0:17:41.960 anniversary of bing Ceol. 0:17:42.440 --> 0:17:44.360 Congratulations, thank you, so. 0:17:44.440 --> 0:17:46.320 A little bit over eleven years ago I took that 0:17:46.359 --> 0:17:49.680 first meeting and at that time the company was already 0:17:50.400 --> 0:17:53.960 ten years old. And what I loved about the story 0:17:54.160 --> 0:17:57.320 was the company was founded by a father and son entrepreneurs. 0:17:57.320 --> 0:18:01.879 So I tend to be attractive to other entrepreneurs and founders, 0:18:01.920 --> 0:18:04.560 and I loved their story. Alan Shama, the father, wanted 0:18:04.560 --> 0:18:06.919 to go into business with his son Joey. They started 0:18:06.960 --> 0:18:10.399 studying what categories could they disrupt, and they couldn't figure 0:18:10.440 --> 0:18:13.360 out why did people charge so much? Money in cosmetics. 0:18:13.840 --> 0:18:15.600 They had a lot of friends that were doing business 0:18:15.600 --> 0:18:19.760 with the Dollar Channel, Dollar General Family Dollar, and so 0:18:19.800 --> 0:18:21.960 they said, what could we do that we could sell 0:18:22.040 --> 0:18:24.880 for a dollar? And Alan will tell me many times trying, 0:18:24.960 --> 0:18:26.960 I don't know as many things as you do, but 0:18:27.040 --> 0:18:28.760 I know how to buy a shirt for two dollars 0:18:28.840 --> 0:18:33.040 and sell it for four. And that novice approach. They 0:18:33.520 --> 0:18:36.760 completely turned cosmetics upside down because their original business model 0:18:36.880 --> 0:18:40.119 was if the Dollar Channel was the retailer for a dollar, 0:18:40.600 --> 0:18:43.159 they're going to buy it for me each piece for 0:18:43.240 --> 0:18:45.479 fifty cents. I'm going to have to figure out how 0:18:45.480 --> 0:18:47.600 to make it for thirty five cents. And they figured 0:18:47.640 --> 0:18:50.359 it out. Everyone thought they were crazy at the time, 0:18:50.400 --> 0:18:53.240 like you couldn't sell cosmetics for a dollar. And of course, 0:18:53.320 --> 0:18:56.240 what I love about many entrepreneurs stories is you always 0:18:56.280 --> 0:18:58.439 have to pivot. They then went to the Dollar Channel. 0:18:58.440 --> 0:19:00.879 A Dollar Channel said no, we're not in interested, and 0:19:00.920 --> 0:19:02.800 they're like, what wait, we put all this effort in, 0:19:03.080 --> 0:19:06.200 what do you mean you're not interested? And Joey meanwhile 0:19:06.200 --> 0:19:08.640 had gotten one of their eyeliner pencils to an editor 0:19:08.680 --> 0:19:11.080 at Glamour and he said, oh my gosh, I can't 0:19:11.080 --> 0:19:13.200 believe this is a dollar. I would love to write 0:19:13.200 --> 0:19:15.480 about it, but you have to be in distribution. She's like, 0:19:15.520 --> 0:19:17.639 you know, even if you had a website. And so 0:19:17.800 --> 0:19:22.240 in two thousand and four, predating the iPhone, they started 0:19:22.560 --> 0:19:27.080 a website called islipspace dot com selling cosmetics over the 0:19:27.119 --> 0:19:29.240 internet for one dollar. Like I said, everyone thought they 0:19:29.280 --> 0:19:31.239 were crazy. You couldn't sell cosmetics for a dollar. You 0:19:31.280 --> 0:19:33.720 certainly could make money over the internet at a buck each, 0:19:34.240 --> 0:19:37.399 but they figured it out. So that initial story of 0:19:37.520 --> 0:19:42.480 how disruptive they were really appealed to me. I love 0:19:42.560 --> 0:19:46.199 the digitally native roots, I love the value orientation. But 0:19:46.240 --> 0:19:48.720 then what I saw was real potential in terms of 0:19:48.720 --> 0:19:51.120 what we could do. They had just gotten into target. 0:19:51.640 --> 0:19:53.960 They were highly productive in target, but they weren't in 0:19:54.000 --> 0:19:57.320 distribution anywhere else. And so I love the story so 0:19:57.440 --> 0:20:00.119 much I decided to jump in and co invest with 0:20:00.160 --> 0:20:02.640 the private equity company and we bought the company back 0:20:02.640 --> 0:20:03.480 in twenty fourteen. 0:20:03.720 --> 0:20:06.600 Wow. Well, just I'm just going to put some context 0:20:06.680 --> 0:20:10.080 for everyone listening today is you have taken ELF from 0:20:10.280 --> 0:20:13.120 two hundred million in revenue over a billion, and your 0:20:13.160 --> 0:20:15.919 stock has gone from seventeen dollars to two hundred dollars, 0:20:16.200 --> 0:20:19.879 five x revenue growth, ten x stock growth. Pretty remarkable 0:20:19.920 --> 0:20:22.240 performance coming out of that, and I want to dig 0:20:22.280 --> 0:20:23.800 a little more into it, and I'll come to it, 0:20:23.840 --> 0:20:26.239 but I want to sort of ask you a little bit, 0:20:26.280 --> 0:20:28.959 because it keeps coming up here is your career is 0:20:29.040 --> 0:20:32.760 filled with risky decisions. How do you think about risk? 0:20:33.720 --> 0:20:36.680 It was funny my first CEO role the pe firm 0:20:36.720 --> 0:20:39.679 that hired me. I remember it was the last dinner 0:20:39.840 --> 0:20:41.600 where whether I was going to get the job or not. 0:20:42.160 --> 0:20:45.359 They basically were like, oh, we looked at your background 0:20:45.400 --> 0:20:47.600 and we don't like that you haven't had any big 0:20:47.640 --> 0:20:48.560 public failures. 0:20:48.880 --> 0:20:50.200