How Michelle Phan built a $500 million beauty empire

When it comes to owning an online empire with tact and class, Michelle Phan is a name that comes to mind time and time again. Known for her beauty, fashion and wellness emporium, Phan is one of the most recognizable YouTube beauty gurus – but that just scratches the surface. Phan, an award-winning content creator, also co-founded the makeup subscription service, Ipsy in 2011, penned Make Up: Your Life Guide to Beauty, Style, and Success –Online and Off and just this year stepped into the world of webcomics, creating “Helios: Femina.”  

If that wasn’t enough to manage, in March 2015, Phan partnered with Endemol Beyond USA and created the ICON Network. ICON is a community of influential creators that collaborate with the digital production and distribution company, (Endemol Shine Beyond) to create content on everything from life advice to beauty to fitness. 

“Through my partnership with Endemol Beyond, ICON is the place where creators have a home to work with each other in a collaborative environment. It’s a place where they can be mentored and create something that is bigger than they could do on their own,” explains Phan.

The network first launched in the U.S. and the U.K and within one year has expanded to Germany, France and most recently Asia. The network has amassed over 400,000 YouTube subscribers, over 50,000 Facebook fans and over 9,000 Twitter followers. 

Beginnings

Phan’s interest in beauty started young, after spending a lot of time at the salon where her mother worked. After she was “finally allowed to wear eyeliner” she began experimenting, reading magazines – much like any teenager. She began noticing how makeup made her feel, particularly “the sense of confidence, beauty and empowerment” it gave her.

Soon she started posting vlogs on the Xanga platform, an early blogging platform. After noticing her growing network was gravitating mostly to her online beauty tutorials, she started to elevate her skills and posted more beauty guides, rapidly. Clearly, Phan has capitalized on this over the years, with Forbes estimating she took in approximately $3 million in 2015 (Phan has quoted the number is lower than reported). 

But, as the 29-year-old is quick to note, her rising stock took time to achieve and the beginning stages required a lot of patience. It still does today.

“The life I lived before YouTube was pretty much that of a struggling artist. I moved several times, my parents divorced, and later my mother and stepfather separated,” she says. “I became an art student and worked as a waitress to put myself through college. I have continually pushed myself to evolve and grow since then.” 

Starting as a YouTube creator is not as easy as one may think, and narrating a portal that is unique and unlike others takes the same dedication and insight one would see with conventional programming. If you’ve watched any of Phan’s videos, read her online content or simply followed her social media dialogue, you can note her professionalism, but also her ability to keep people entertained. 

“I wanted to create a story and almost bring a more theatrical element to my videos,” says Phan. “If you’re always putting out the same videos, people get bored and they move on. I think because I constantly evolve and grow with my audience, I’m able to stay relevant.”

Staying relevant is extremely important in the hyperactive world we live in where every moment followings can rise and fall just as fast. And learning what an audience wants isn’t an easy job. With social media and online forums there is a level of trust you have to have in yourself first to gain an audience that believes. 

“My first video was awkward. Editing myself was so embarrassing. But, I posted it to YouTube and didn’t look back. To my shock the next day it had over 10,000 views and surpassed 40,000 by the end of the week. It was incredible to read the comments and have people all over the world thanking me, asking me how to do a smoky eye, or an acne coverup. The comments kept pouring in and that’s how it all began,” she says.

Entrepreneur spirit

In 2015, Phan made both Inc.’s and Forbes 30 under 30 lists. Her burgeoning enterprise has spread across the globe, bringing together inspiring, creative and original content that speaks not just to the millennial generation, although that is the audience that is most tapped in. 

Five years ago Phan’s plan was to build a network and launch of makeup line–two feats that she has accomplished. In August 2013, she launched her own cosmetic line for L’Oreal called em by Michelle Phan. She also became Lancome’s first official video makeup artist. 

Her most prominent venture, the subscription beauty service, Ipsy, is said to be valued at $800 million and currently has over 1.5 million subscribers. The company’s mix between glam bags and trending briefs has hooked people, and it’s also opened doors for brand exposure. The “glam bags” (which run $10 a month) come packed with select products from eyeshadows to jewellery; any company would be silly not to realize the exposure this can do for their brand. Currently, “glam bags” are shipped within the U.S. and Canada.

Ipsy Open Studios is open to everyone who wants to create and all tools and resources are provided to help enhance creative and connective productivity.

Empowerment and authenticity 

Phan’s ability to connect with audiences on a very personal level remains one of her strongest assets, and this is something she doesn’t take lightly.

“The message behind all of my videos and my work is to empower young people. I want to inspire them to be brave and remind them that they have the freedom to dream,” she explains.

You can note this message in every one of her videos, even in her sendoff of “good luck,” which is an encouragement for people to try new things: a look, a new perspective on life, a new chapter. 

She also speaks about the importance of authenticity, especially if you’re trying to build your brand online. 

“For the longest time, people have been exposed to the superficial and facades,” she notes. “The Internet brings a refreshing, authentic point of view that people have been searching for.”

Even with its powerful platform, those wishing to pursue an online marketplace in some capacity need to keep their priorities in check.

“Don’t do it for the numbers and don’t do it for the fame because if you do, you will be disappointed. When you set that expectation to have ‘this’ many subscribers and you want to make ‘this’ amount of money, you burn out really fast.”

She advocates the three Cs: content, consistency and collaboration. 

“Videos need to be high-quality so people can watch, share and learn. And uploads need to be consistent so subscribers get something new each time they come back.”

Inspiration and advice

At the start of 2016, Phan uploaded a video of her quest to find out more about her heritage. Throughout the video she offers enlightening quotes, visuals and an overall hopeful sentiment to everyone watching. She also lets viewers get an inside look at her musings, food excursions and simple day-to-day happenings.

“I am inspired by everything around me: technology, books, different cultures, even food.”

Her tenacious and independent nature has kept her hungry and she even told her mom (whom she cites as her biggest inspiration) that she would retire her when she hit 25. “Whenever I give my word, I kill myself so I do it–that promise becomes my purpose, and my purpose and biggest achievement has been retiring my mom as fast I could.”

It’s been over eight years since Phan began her foray into makeup video tutorials and while the landscape has changed and new applications (Snapchat for example) have popularized, there are still simple principles that Phan employs. With more than 8.5 million YouTube subscribers, Phan is aware of what works and what doesn’t. She’s also aware of people’s misconceptions, perhaps ignorance to the craft. And, she’s aware of YouTube’s evolution.

“When YouTube was first gaining popularity a lot of creators were focused on producing a viral video that would be seen by millions. Now YouTube has become more of a business platform where content creators have their own individual channels and they can build a true following and a brand.”

It’s this acknowledgement that has the Boston-native mentoring newcomers to the scene, explaining that it’s important for creators to understand that growing a following takes time. 

“You need to build solid content on your channel so that people know it’s worthwhile to subscribe to you. Consumers are most likely to choose a brand that they have a connection with.”

Those wishing to take the plunge should do so in baby steps, says Phan, testing the waters before jumping both feet in. 

“Start small and see how far it can take you in your spare time. See if you can monetize it and once you make a small living then decide if its something you want to pursue full time.”

As mentioned, Phan really stresses building content that is authentic, and as we have all come to see, our minds are constantly fleeting so keeping a hold on an audience is vital to one’s success.

“People want to be part of a larger story. It’s not just about the profits, but also about your message. When you have a message people want to be part of the rest will come.”

Her most recent endeavour, the “Helios: Femina” webcomic is yet another example of Phan’s creative mystique – a digital comic book with new chapters coming out every Sunday, and yet another way for fans to follow along and connect. The series also focuses on the cornerstone notion of empowerment and has been years in the making. In fact, Phan came up with the concept at age 11.

“It was very important to me for the storyline to be centered on empowerment. By sharing one powerful story I believe you can ignite a movement and create a positive, supportive community.”

 Work/life balance

“Recently I’ve focused on working smarter instead of harder to create a better work/life balance. Staying present and consciously thinking positive thoughts, especially in moments when you are feeling down, is something I try to practice daily. Finding and nurturing your passion not only helps to develop self worth but can also build your drive and purpose.”

Since we know the love and appreciation Phan has for beauty products we couldn’t help but ask her what she’s into these days. 

Here’s what she’s all about as of late:

Makeup

- Colorpop eyeshadow creams

- IT cosmetics’ Universal brow pencil 

”I give it to all my friends regardless of their hair colour because the neutral taupe colour works with all hair and skin colours.”

Go-to product

- A good black eyeliner (such as her own em waterliner)

Tip(s): “You can use it as mascara by blasting it with a hair dryer until it melts, then use a spoolie brush to comb it through your lashes. You can also use a hair dryer to turn the pencil into a gel liner and an ombré gradient eye shadow–it thins out the texture of the eyeliner so it creates a gray colour, and then you can work your way up to the black shadow.”

Fragrance

- Essential oils such as lavender and rosequartz

“Essential oils are great for summer because they are not alcohol based like traditional fragrance formulas.”

Hair

“It’s not healthy to wash your hair everyday so I use a lot of dry shampoo. My favourite is Sexy Hair Dry Shampoo – it revives my hair in one easy step.”

For more on Michelle Phan head here