Is Glossier pulling a WeWork?

Glossier has been a trailblazer in the beauty market, and Emily Weiss considered one of the most successful entrepreneurs of these last years.

After creating Into the Gloss, an immensely successful beauty and fashion blog garnering more than 10 million views a month, in 2014, Weiss launched Glossier, a direct-to-market (DTM) e-commerce startup. Glossier rapidly raised a massive interest from investors wanting to shake up the dormant beauty segment and raised a total of $266.4M from 2014 to last year.

But recently, this promising digital-native company has been losing its glamour. After being hit by many claims of toxic work culture, lack of concern for women of color, and slipping from social media attention, Glossier just laid off a third of its corporate workforce at the beginning of the year.

What's going on? Probably quite a few things. Startups under such a market spotlight are never a simple thing to lead and scale.

But there was one thing that changed: the market started to reconsider the initial promise of Glossier. Is it that extraordinary to sell beauty products online in 2022?

You see, many regular Joe's companies are trying to wear a black turtleneck and snickers to pause as tech startups. The reason is that if you're a tech company such as a SaaS business or an online consumer platform with potentially explosive growth and recurring revenues, your valuation will be based on a multiple of your projected revenues. But if you're a regular company? Not so much. Your valuation is based on a multiple of your EBIDTA (which, yes, is way worse).

The mother of all scams in that regard was certainly WeWork. In hindsight (and once their financial figures were disclosed when filing for IPO), a shitty business pausing as a grandiose tech venture. But while they managed to maintain the illusion, their valuation was extraordinary as far as the real estate market goes:

And again, many things are probably happening to Glossier as we speak. But what is clear is that investors are starting to wake up from a collective consensual hallucination: there is nothing extraordinary going on at Glossier.

It's still arguably a fantastic beauty brand built in just a few years, which is, yes, making mistakes along the way. But it's not a tech venture. It's just... online.