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The Founder's Notes

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The template only earns its keep if you actually put two cases next to each other.

This is the reason every teardown answers the same questions in the same order. Put a luxury house beside a console platform and the differences stop being vibes — one is refusing sales to protect a price, the other is selling below cost to collect a toll, and both are defending a moat.

Beauty · Private (Selena Gomez, majority owner)

Rare Beauty

A celebrity makeup brand that launched as a Sephora exclusive in a pandemic, wrote a mental-health budget into its sales line, and became one of the few founder brands to outlast its launch year.

Technology · NASDAQ: AMZN

Amazon

Runs a near-breakeven retail operation at enormous scale, and earns essentially all of its profit from renting out the two things that operation forced it to build — computing capacity and shelf placement.

The thesis in one line

Most celebrity brands sell the celebrity. Rare Beauty sold a liquid blush, and then a reason to keep buying it.
The store is not the business. The store is the customer acquisition cost for the businesses.

Verdict

Watch it
Own it

Moat

Narrow

Brand · Distribution

Wide

Scale economics · Network effects · Process power · Switching costs

Porter's five forces

Competitive rivalry
Threat of new entrants
Threat of substitutes
Buyer power
Supplier power
Competitive rivalry
Threat of new entrants
Threat of substitutes
Buyer power
Supplier power

Headline figures

Trailing net sales
> $400M
Share of sales to the Rare Impact Fund
1%
Years as a Sephora exclusive
5.5
Ulta stores at launch
1,500+
Net sales
$638B
AWS share of operating income
~58%
Retail operating margin
~5.4%
Third-party share of units
~60%

Unit economics

One $25 makeup item sold at Sephora (illustrative — Rare Beauty discloses nothing)

The cause costs a quarter or less per item, which is small next to the retailer's half. The point is not that the fund is cheap; it is that it is the only line on this table the customer can see, and a brand that would rather spend that quarter than another quarter on advertising has decided which one does more work.

One $50 third-party item sold through Amazon

Amazon captures roughly 38% of the sale price and carries none of the inventory risk. The seller took the risk, paid for the warehouse, and then paid again to be found in a search of Amazon's own catalogue.

What would change her mind

If credible reporting shows 2026 sales growing well above 20% with Sephora sales holding steady, Ulta found a new customer and the plateau was a distribution ceiling, not a demand one; I would move to own it. If instead Rare Beauty's Sephora business shrinks while Ulta grows, the brand bought a year of growth by trading away its exclusivity, and the $1.3 billion estimate is closer to the truth than the $2.7 billion one.
If AWS revenue growth falls below 15% for two consecutive quarters while segment operating margin also declines, the cloud business is being commoditised rather than merely contested, and the capex is being spent defending share rather than buying growth. That combination — decelerating growth and compressing margin at the same time — breaks the thesis outright. A single weak quarter on either measure alone does not.

No mechanisms in common

These two share no tagged mechanism, which usually means the comparison is about contrast rather than pattern — a useful thing to know before you start writing.