(FORTUNE Magazine) – Estee Lauder, billionaire baroness of the beauty industry, drops names as though she were dropping olives into martinis. She has so perfected the skill that you barely notice when the conversation suddenly shifts from rags to royalty. ''I always carry a pair of gloves,'' she burbles. ''I was having lunch at Orsini's years ago with the Duchess of Windsor. After the meal, she took out a fresh pair of gloves.'' Not a beat missed. Consorting with duchesses crowned a life of charm, chutzpah, and clawing. Estee Lauder, 79, chairman of the perfume and cosmetics business she built, has arrived. Last time Princess Di was in the U.S., she named three people she would like at a White House dinner in her honor: Bruce Springsteen, Robert Redford, and Estee Lauder. The doyenne of lips and lids is the last in a line of beauty industry legends: Elizabeth Arden, Helena Rubinstein, and Charles Revson, founding father of Revlon, are all dead. Lauder's privately held, family-run company, Estee Lauder Inc., sold about $1.3 billion worth of fragrances and cosmetics worldwide last year, according to industry authority Allan Mottus. Lauder products are No. 1 in department stores, accounting for 37% of all cosmetics and fragrances sold. (Only department stores can display the Lauder logo. Drugstores, dearie, are declasse.) Estee Lauder is better than just about anyone else at using advertising to promote her high-quality, high-priced, high-margin products and at using the society pages to promote herself. To millions of beauty seekers, the name Estee Lauder conjures up the life of the confident, elegant woman pictured in her ads. ''You somehow know that her closets are impeccable, her children well behaved, her husband devoted, and her guests pampered,'' says June Leaman, Lauder's senior vice president of creative marketing. For years many people assumed that the woman in the ads was Estee Lauder, a misconception she did nothing to dispel. Newspapers in New York and Palm Beach painted her as a woman of Viennese background, with a privileged childhood cum chauffeurs and stables. But her beginnings were decidedly more humble. The matriarch of makeup was born Josephine Esther Mentzer, daughter of Jewish immigrants, over her father's hardware store in Queens, New York. During the Depression she started selling her uncle's skin cream concoctions in a Manhattan beauty salon. Estee recalls that she admired the owner's blouse, asking where she had bought it. An irrelevant question, snipped the woman, since a salesgirl could never afford such a blouse. The remark flamed the young woman's ambition. She says: ''I wouldn't have become Estee Lauder if it hadn't been for her.'' Estee worked her way out of beauty parlors and into department stores, manning counters with unforgettable flair. ''Never say, 'May I help you?' '' she explains. ''Say: 'Madam, won't you please let me show you how this finest of creams, made from only pure ingredients, can make your complexion glow with youth and radiance?' '' Then she would touch the woman's face, look into her eyes, and press a sample into her hand. Today the Lauder gimmick of giving a free gift to women who make a modest purchase is a marketing mainstay of the beauty business. To peddle her ''jars of hope,'' as Lauder calls them, ( she handpicked a small army of saleswomen -- now numbering 7,500 in the U.S. Called beauty advisers, they were definitely ''not T and T girls,'' she says, ''always on the telephone or the toilet,'' but women as willing as she to spritz and slather and sell, sell, sell. In building the business, Estee had help from her late husband, Joe Lauder, and their sons, Ronald and Leonard. Joe handled production. Ronald oversaw the company's expansion abroad until he quit working to join the Reagan Administration as deputy assistant secretary of defense. He is about to step down as ambassador to Austria and is rumored to have ambitions for elective office. Leonard, now president and chief executive, handles all day-to-day operations. Mrs. Lauder is a shrewd risk-taker who subordinated her life to the business. ''I was single-minded in the pursuit of my dream,'' she says. ''People were referring to Joe as Mr. Estee Lauder. He didn't like it at all.'' In 1939 the Lauders were divorced. They reconciled and remarried four years later after son Leonard contracted the mumps and the two kept vigil together. ''Here is a lesson I have learned,'' she says. ''Whether you are a businesswoman or a housewife, attention must be paid to your mate.'' Drive, daring, and dedication characterize American entrepreneurs like Lauder. Warren Buffett, 57, chairman of Berkshire Hathaway Corp., who lives the dream of having made a billion -- actually $2 billion -- in the stock market, sums up the obsessiveness needed to succeed so spectacularly. ''Our prototype for occupational fervor is the Catholic tailor who used his small savings to finance a pilgrimage to the Vatican,'' Buffett writes in a witty, straight-talking letter to shareholders, for which he is famous. ''When he returned, his parish held a special meeting to get his first-hand account of the Pope. 'Tell us, just what sort of fellow is he?' Our hero wasted no words: 'He's a 44 medium.' '' Buffett has no match in identifying undervalued businesses that eventually live up to their potential. Currently he is betting heavily on Capital Cities/ ABC Inc. and Geico Corp., the insurance company. Buffett also has some maverick ideas about how wealthy parents can help children live up to their potential. His advice: Don't leave it all to the kids (FORTUNE, September 29, 1986). Laurence Alan Tisch, 64, and Preston Robert Tisch, 61, known as Larry and Bob, are brother billionaires. When Larry graduated from college in 1946, his % parents gave him $125,000, which he invested in a run-down New Jersey resort. Two years later, his brother joined him in the business. Larry and Bob hit the big time when they restored Atlantic City's landmark Traymore Hotel; then they went on to wake up sleepy resorts in the Catskills and Florida. Next they moved into movie theaters and tobacco and insurance companies. Last year the brothers went their separate ways: Bob to sort out the mail mess as Postmaster General and Larry to run CBS. Ewing Marion Kauffman, 71, another entrepreneur par excellence, started selling calcium-rich ground oyster shells to doctors in 1950. Today he and his family own 23% of Marion Laboratories, a Kansas City pharmaceutical company with $600 million in revenues a year. Among the company's hottest products are Cardizem, a heart drug, and Os-Cal, an over-the-counter calcium supplement. ''Os'' stands for oysters, and it's the same stuff Kauffman started peddling more than 35 years ago. All FORTUNE's entrepreneurs are on the downhill side of middle age but insist on working. Estee Lauder, whom some employees irreverently call ''the old lady,'' still has the last word on new fragrances. ''I try them out on all my friends,'' she says. ''I never ask them if they like it. I just look to see if their eyes are brighter.'' Although a working-class Queens accent sometimes sneaks into Estee's conversation, she has shaken her roots. She says she adores caviar on Ritz crackers, ''ruby strawberries floating in champagne bubbles,'' and ''the feel of a liquid-silk ball gown.'' Ming vases and glittering crystal grace all her homes, which include a limestone mansion off Fifth Avenue in New York and a 27-room oceanfront Georgian home in Palm Beach. Lee Israel, author of an unauthorized biography called Estee Lauder: Beyond the Magic, reports: ''She is the Gracie Allen of the beauty field. She always says the most outrageous things.'' One of her routines: stopping women in elevators to tell them that their clothes or cosmetics make them look old. But despite a pushiness that borders on the outrageous, she rarely offends. Estee Lauder, that 5-foot 4 1/2-inch giant of the cosmetics industry, has a way with women. She has been winning them over by making them over for decades.