Elf on the Shelf co-founders built a $1B+ holiday franchise from a family tradition — now launching a Netflix preschool show

Speaker 2: Welcome to the show. What's Thank you so much for joining us. How are you doing?

Speaker 5: Great. Hi.

Speaker 2: Thank you for joining. I'd love to get an introduction to kick this off from both of you and take us on a little bit of the journey of the company and the Sorry. Love Christmas around here. We have been counting down the days to Christmas trying to interview as many people. I'll take

Speaker 1: it down a notch

Speaker 2: But a little the economy, we have multiple levels of Christmas adornments on the Chiron. But I'll let you kick it off...

Speaker 1: A little more mild.

Speaker 2: Let's do a little bit of Christmas.

Speaker 1: Yeah. A little

Speaker 2: bit of Christmas.

Speaker 1: But... Working working on it. Working on it. It. That's better. That's better. We can... Thank you.

Speaker 6: Christa, we finally find people like fashioned out of our own heart. Yes. Like the love of Christmas is real here. We love it.

Speaker 1: Started our Christmas countdown at like a hundred and twenty days.

Speaker 2: A hundred and twenty days. We were deep in August. It might have been 95 degrees here in Hollywood, Los Angeles, but, we stuck it out. Now it's getting a little cool here.

Speaker 1: We heard those sleigh bells ringing.

Speaker 2: We heard the sleigh bells ringing. And we're in the... Yeah.

Speaker 6: We're only two months away. So it's gonna be here before...

Speaker 1: We're only hours away. Yeah. Over... Think over the last ten hours.

Speaker 2: Hours away. Anyway, I'm glad to have you on the show. But yes, let let let's go through the story. I would love to hear about your entrepreneurial journey, and then I'm sure we'll have questions about the business and and Christmas in general.

Speaker 5: Sheva, do you wanna run with that one?

Speaker 6: Sure. Happy to. So, you know, this this was not something we thought we were gonna start a business around, when my mom and I, sat down in 2004, to write a story based on our own family tradition, really based on our elf that used to come at Christmas time, and it would watch during the day and report to Santa at night. And the morning when we woke up, you know, we would race around the house trying to find the elf to see where, you know, it came back. And when I had my kids on my own, and it's roughly 2005, and I'm having tea with my mom, and I look up and I see our elf sitting on a shelf. Mhmm. And I'm like, mom, you know, we should we should write a story about our elf. I had no idea what I was saying, and I had no idea what that would mean for us, and certainly, no thought that we would be starting a business. But when we couldn't get anyone to publish our little story based on our own family tradition, you have a good idea and that's all it will ever be, or you're going to have to to step out in faith and do something with it. And, that's the path that we chose. And so now, we're we're twenty one years in, and we have a whole Santaverse and a whole world of storytelling Fantastic.

Speaker 2: All built

Speaker 6: on this opportunity to work for Santa Claus.

Speaker 2: And what is the shape of the of the business? Is it... How much is consumer products versus books versus other revenue streams? Like, take us through the the...

Speaker 1: Do you get any kickbacks from your service From the big the man? Big man up north?

Speaker 6: You'd be amazed how how stingy Santa Claus is.

Speaker 5: Oh, yeah. Seriously. I mean, just to jump in on that Yeah. Our business is really well rounded.

Speaker 2: Okay.

Speaker 5: We've got a very robust licensing and partnerships business, not just consumer products, but also on the partnerships side. Right? We've worked with several major clients over the years. Beaches has been a great official Caribbean destination for us over the past several years.

Speaker 1: Woah.

Speaker 5: We also have an inbound licensing program that we announced this year because the elf on the shelf is a fan of whatever your family happens to be a fan of. And so we decided we wanted to go talk to folks that had major fandoms. So this year, we've got Disney princesses. We have Mickey and Friends. We have Spider Man. We have Olaf

Speaker 2: Yeah.

Speaker 5: From Frozen, and we have Harry Potter. So when your kids wake up in the morning, they might have just experienced a moment where their elf flew into the costume that they love best, and we'll be greeting them in the morning with something very festive from our other, friends in the fandom world.

Speaker 2: That's magic. Can you, take us through, some of the various, turning points for the business? It feels to me like there was a big social media moment, a big viral moment where Elf on the Shelf became a much more prominent name globally. But is that just what I'm feeling... I also knew

Speaker 1: about Elf on the Shelf before I knew it was a business.

Speaker 2: That's true. Yes. Interesting. Which is good. Right? You knew it was lore before you knew it was a product, which I think is the best way to

Speaker 1: experience Yeah. Like tradition led rather than marketing.

Speaker 2: Exactly. Exactly. But yes, tell us about some of the inflection points, what it felt like on the inside of of the business.

Speaker 5: Well, we have... Go ahead, Christa. Well, I was just gonna say it's been quite the journey. There have been several major moments. First and foremost, to to your point, no one knew what the elf on the shelf was. Yeah. There was no place where someone could have understood this. And we started at very local Christmas markets. And when you go to a Christmas market, you can look around and you can see purses and be like, oh, mom would love that. That would be great. But in our case, we didn't have any way to explain what this was unless we talked to people one at a time. So early, we used some gorilla marketing tactics. Oh, look at that. I love clutches. They're cute. Yeah. Like, we gave away those very inexpensive blinking bracelets because it had parents stopping and listening to what we had to say. So it was a very small investment to get people to pay attention. And then as Chanda and I had grown up with this as children and we knew how magical it was and how much joy it created, we knew if parents would just try it, that the magic and the wonder of the season would really take over, and it would start driving that word-of-mouth interest. And that was the beginning. As we continued through the story, and you guys know as entrepreneurs, and I'm sure you can understand how these conversations went, the banks weren't so thrilled with the idea that elf dolls and books were gonna be a great idea to invest in. So we pulled our resources and we did it ourselves. And then as the business progressed and grew, we had a few pivotal moments, I would say. One was when Jennifer Garner was photographed carrying the elf on the shelf down the street

Speaker 1: Wow.

Speaker 5: By the paparazzi. We still don't know how she got it. I don't know if Jennifer is listening. She should be. And if she is, we would like to know how she got it. And then the second was that the Today show had also run a piece on us just a couple weeks later. As the company has grown and sophisticated, I would say our animated special, an elf story, when it aired on CBS, and also having a balloon in the Macy's Thanksgiving Day Parade were very early big wins for us as we got started. What would you add to that, Chan?

Speaker 6: I would just say, you know, I'm I'm thrilled to hear him say, you know, he'd heard about off on the shelf before he knew it was a business. Our whole job is to create joyful family moments at Christmas time. And, you know, most people don't know that it's not a large company really behind a global brand. Yeah. It's a it's a family business owned by my sister and I, started by, you know, my mom, my sister, and myself, and you know, that's still what we're doing. Still creating joyful family moments through these stories and characters. And so to Christa's point, we do that through entertainment. We have our... A Netflix partnership. We're launching our own preschool show on Netflix this year, Scout Elf Squad. Nice. That launches November 4. You know, but again, it's still very scrappy. Right? We started on YouTube, saw a lot of demand for that, then then got our partners at Netflix to pick it up. So really been able to build a global franchise around what started as a consumer product, and it's a... It's an entertainment brand. It's a character brand. It's a lifestyle brand. And so it's just been really fun to to be behind, the magic of Christmas time, for families.

Speaker 1: What's it like running probably the most seasonal business on Earth? Like, I imagine you guys... Can you guys relax a little in q one or is it you're already got like you're like there's three hundred days till Christmas?

Speaker 2: And people don't realize how risky it is because you have to forecast how much you're gonna make and...

Speaker 1: No. And even these viral moments that you're talking about

Speaker 2: Five stakes...

Speaker 1: You can't you gotta build in... You you can't buy five years worth of inventory. Yep. Right? You gotta buy Yeah. You gotta...

Speaker 2: Yeah. Yeah. What... Yeah. What have you learned in the process? How do you manage the the the the emotional roller coaster of building a business throughout the holiday holiday season?

Speaker 5: Well, I'll tell you what I've learned, which is you can't back order Christmas. Yeah. And Christmas always comes.

Speaker 2: Yeah.

Speaker 5: Right? It doesn't matter what's going on in the world. Christmas is always gonna come. And it's our job to make sure that it brings joy. Yeah. You are completely right. It starts all over again on January 2, and it is all about planning and forecasting and production, not just here, but globally, which presents its own challenges. Yeah. But we've got the best team on the planet. I would put our team up against anyone anywhere. We were working for Santa. That's what we do. We're working for Santa.

Speaker 1: That's amazing.

Speaker 2: Oh, well, thank you so much for coming on the show.

Speaker 1: Yeah. How do you... How are you guys feeling about Christmas this year? How... Do you feel like the Christmas spirit building in a in a in a positive direction?

Speaker 6: We actually do. Yeah. Great. We're seeing... We are preorder campaigns sold out.

Speaker 2: That's good.

Speaker 6: We are really seeing people... People are excited about family traditions, spending What time we offer is simple, everyone can participate. Yeah. And so we... At least in our case, we're seeing people really excited about, you know, the return of the brand, and we're already seeing sellouts on several items including licensed items.

Speaker 2: That's amazing.

Speaker 6: Like our big four or five foot e. That's being sold at Lowe's. So What's the... Is that

Speaker 2: the biggest e. L. F. You've ever sold or is there a 20 foot No.

Speaker 6: SKU cover? Is a giant... Christa, how how big is the inflatable e. L. F? I think it's, like, two or three stories tall.

Speaker 5: Yeah. There's many,

Speaker 1: many stories tall.

Speaker 2: You can go on your house on top

Speaker 6: of your house. It's huge. It's literally huge.

Speaker 2: This is amazing. Okay. I love... I didn't realize there was that much diversity in the portfolio, but this is this is great

Speaker 6: to hear. There is.

Speaker 2: I like it.

Speaker 6: There's even little tiny mini elves.

Speaker 2: Okay. We

Speaker 6: we got it all.

Speaker 2: You got everything covered.

Speaker 1: Yeah. No. I'm I'm... I I think the world needs the world needs Christmas. You know, it's been a crazy year. It does. Yeah. It's time to focus on what really

Speaker 2: I know. I feel Is there a public offering in the in the works? I mean, Anthropic's going

Speaker 6: to God's ears. Yeah. Anthropic's going

Speaker 2: out 2,000,000,000,000. This feels like at least 1,000,000,000,000. Is somewhere in

Speaker 1: that Minimum. I do companies roughly

Speaker 2: on equal footing. Okay? Yeah. But thank you so much for coming.

Speaker 1: So great to meet

Speaker 2: you guys. It was amazing story and

Speaker 1: good luck the next...

Speaker 2: Good luck. We hope you blow out all of your sales forecast holiday season and beyond.

Speaker 1: Talk soon. We'll see you next year.

Speaker 2: Have a great rest of your day. Goodbye.

Speaker 1: Well, now that they're out, we can we can up the ante to the Okay. To to the next level.

Speaker 2: For the cohere folks? The Canadians that are coming on? Do we have cohere coming on? Okay. First, let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. And we are joined by the cofounder of Coher, Ivan Zhang. Or wait, do we have a cofounder? Yes.