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Michelle Phan on Influence (and How to Use It)

Allure logo Allure 2/20/2021 Brennan Kilbane
© Screenshot via Youtube. Photoillustration by Clara Hendler.

When Michelle Phan parts her lips — Ferrari red and lacquered, or Krispy Kreme cream and glazed, or vigorous pink but embalmed in balm — it is extremely important to pay attention to what comes next. As a fledgling beauty vlogger in the early aughts, Phan predicted the economy of influence that now powers the billion-dollar beauty industry. As a successful beauty vlogger in the early '10s, Phan wondered if direct-to-consumer sampling could be lucrative; the subscription box she cofounded in 2011, Ipsy, now brings in a reported half billion dollars each year. She took a break from social media in 2016, years before it was fashionable to do so, due to, among other things, an almost pathological addiction to career success. And then she came back because her work wasn’t done.

It is difficult to describe exactly what Phan currently does for work without painting a picture too vague to be comprehensible. Her early instinct to combine personal storytelling with makeup instruction, broadcast first in pixelated corners of the blogosphere and later on YouTube, has been adopted so widely by creators and journalists and marketers alike that its tropes — Tag your friends for a giveaway! Don’t forget to like and subscribe! — border on cliché. Her own beauty brand, Em Cosmetics, appears almost as if it was delivered from a future where moisturizers are sold as sticks and blushes look like jewels. It's easiest to say that while Phan began her career as a vlogger-cum-influencer, there is no aspect of the contemporary beauty industry that she is not involved in. So: What does tomorrow look like? We need only ask Phan and listen. 

Allure: How would you describe what you do for work?

Michelle Phan: I just tell people I'm a creator. That's a word that I've said for the past 10 years, that always felt true to who I was. I don't even say entrepreneur or influencer — just a creator. And in a way, the online world is my gallery. And there are different mediums I can work with, whether it's video or even beauty products. If they want more information then I go through the whole show: “Well, back in the day, I started on YouTube…”

Allure: What would you say was your first platform?

Phan: Back in the early two-thousands, there were a bunch of sites that would host blogs — Blogger, Angelfire — and there was this one called Xanga that I felt really comfortable using. That was really where I started to learn how to create basic HTML. I was doing gifs. I was making gifs before they became a thing because I love visual movement.

I was on MySpace too, and I was going through my comments. People were fighting about my Top 8. Then somebody had posted a YouTube video link. This was maybe 2005, before Google had purchased YouTube, and [digital] video was really hard to stream, but I was shocked that you could press play and the video would just… play. It didn’t need to buffer, or anything. I was like, “What is this?” It was a new medium for me, and I was excited because I love video so much. I knew that with beauty, a video tells a better story than just pictures and words. I think when you see the makeup, the transformation, and you see it come to life, it feels more tangible. And you learn better.

I made my first video in 2007 and I posted it on my YouTube page, just for fun. And when I came back the next day I had like 20,000 or 30,000 views, which was a lot. I would say that was the most engaged content I ever had.

Allure: What kinds of skills did you have to develop for YouTube?

Phan: I watched a lot of commercials back in the day. I was trying to learn how you tell an engaging story in 15 to 30 seconds? Commercial producers probably spend millions of dollars storyboarding everything out. Every single second counts. I was also inspired by Bob Ross. I think he was so good at making something that people tend to think of as hard, like painting, he made it so easy. Anyone can paint. And there was something also very therapeutic and ASMR-y about his content. I know that art critics say, “Oh, he's not a great painter.” And even with me, I know a lot of makeup artists who'd say, “She's not really a makeup artist.” And it's true. I'm not a professional makeup artist. I’m just showing people how I do my makeup.

At that time Lancôme was filming tutorials for YouTube. They would spend thousands of dollars on the content and it would get just, like, 300 views, and they just didn't understand why people weren't watching. They searched "Lancome makeup tutorial" [on YouTube] and thought their [tutorial] would come up. And it was all my content, using Lancôme's stuff, with 800,000 views on one video! They were flabbergasted. So [the brand's then-head of PR Kerry Diamond] reached out to me — I couldn't even fathom working with a brand like Lancôme. I met with a team and signed a contract to do a monthly video for them. That was interesting.

When I made the announcement that I was working with Lancôme, I got so much hate because people said, one: I "sold out," and two: "Lancôme tests on animals" because the products are sold in China. [According to the brand: "We at Lancôme do not conduct animal testing on our products or ingredients, nor ask others to test on our behalf, except when required by law."] So I was a sellout who supported animal cruelty. You wouldn't say that to a celebrity who endorsed Lancôme, but people don’t see me as a celebrity. They see me as a best friend or someone they really trust. It's a completely different relationship. It sucked that I had so much hate, but I didn’t care. I just made really good content. And if the content is good and engaging, then I fulfilled my duties.

Allure: When did it feel like it was time to move on from that?

Phan: When I hit a million subscribers. This was after two years of really going hard at YouTube. I dropped out of college 'cause the economy crashed. I decided I was just gonna try to make money on YouTube and pay off my debts. I was living in Florida at the time and I felt like this big fish in a small pond. I wanted to go to the ocean. So I went to L.A. and met with some people. I wanted to do a subscription beauty business, but I started on YouTube. I didn't have hedge fund people or a VC. Nobody cared. It was just an idea in my head. Now I needed to build out the business model and find someone to help me run it. I met with my co-founders [Marcelo Camberos and Jennifer Jaconetti Goldfarb] and we developed Ipsy together.

Even though [my YouTube channel] was still growing, I knew it wasn’t going to last forever. I had to plan for the future. I knew that eventually, I’d reach a ceiling.

Allure: It almost sounds like you invented beauty blogging and then went on to invent the beauty subscription box?

Phan: Well, Birchbox existed before Ipsy, but I didn't even know about it. My idea for Ipsy was inspired by shopping in Asia. In 2008, I was in Thailand, and I saw people were interested in buying expensive skin-care samples. In the U.S., you can use half the bottle and take it back to the counter and say, "I didn’t like this," but in Asia, it's final sale. It was fascinating. And I thought, one day I'll do a business where people could buy samples, maybe in a mystery box, or you pay a subscription and it's a surprise. I didn't know about Birchbox then, but sometimes you don't have to be the first. You just have to be the first to do it right. Or there's this French saying: "It's better to be first to be second." The first person does all the research and development, and then you learn from that and do it better.

So, no, I wasn't the first subscription beauty box, but I was the first to take my influence and turn it into a sustainable business model. Because being an influencer is not sustainable at all. People care about what you say, what you create. But eventually, like I said, you reach a ceiling where you lose relevance, and if you want to gain relevance again, you have to reinvent yourself, and do it very well. Unfortunately reinventing yourself means you have to be louder or you have to be more shocking. You can see this with YouTube.

Allure: There are more beauty products in the world than ever before. Are we at critical mass?

Phan: I thought we reached critical mass two years ago. It's just growing and growing. I wonder if it's more cyclical. Maybe we will see a crash, but the pendulum will swing the other way. Maybe some brands will say, “You know what, we're editing down our offerings from 500 SKUs to 100 SKUs.” I could see brands wanting to be more sustainable: “We want to be more intentional with our product offering and not just chasing these moving targets called trends.” So I could see that happening too because it makes sense financially for the business. I could see a pullback and then the cycle will begin again.

Allure: How do you grow a beauty brand without launching a new product every quarter?

Phan: You have to think about replenishables. If you want to produce less, but you still want a healthy churn where people can come back and repurchase, maybe consider making a product where people can repurchase it rather than one product that people will continue to use. Eye shadow, palettes, blushes — it takes a long time to hit the pan. But mascara is super replenishable. Lashes are super replenishable. But I do agree, and I’ve seen other brands that have to launch a lot and have to have this exponential growth because they raised money, and their VCs want their money back. There's a lot of pressure for them to see the returns. I've been an advocate for trying your best to bootstrap your brand. Launch small. Launch two things. Egyptian Magic is great, and they have only one product. It is possible to have a sustainable business where it's hyper-replenishable and it's good.

Allure: I’d love to talk to you about blockchain and cryptocurrency, which you’re an advocate for, and how they dovetail with the future of the beauty industry.

Phan: I think the [connection I can make between my career] and Bitcoin is like, why was I interested in making vlogs? Why was I interested in making content on YouTube? Why was I interested in creating a business? It's because I've always wanted to find sovereignty. YouTube really decentralized media. Anyone can have a channel. Well, not everyone because we're seeing what's happening with the ban, which is really interesting. But beauty YouTubers and gurus and creators were decentralizing beauty. Beauty wasn't just one face anymore… YouTube, TikTok, Instagram. It's almost like a free market, and it changes the world.

Now, with Bitcoin, we have financial sovereignty. Creators can exchange with someone else on the other side of the planet and create our own business and service without having all of these middle people coming in, slowing everything down, and charging us fees. It goes back to trust. You don’t have to trust it anymore. You can verify it. We can't go to Fort Knox to see that the gold is still there, but we can do that with Bitcoin. Especially in light of last year with quantitative easing. They were printing more money for the stimulus checks, so eventually, we're going to see inflation and the dollar will depreciate. I mean, it's just math at that point. It's not a conspiracy or anything. But with Bitcoin,  there's a fixed number. There are only 21 million units. It's a very rare asset. And each year, it gets harder and harder to mine.

I've always been an advocate of inspiring people to build generational wealth, not just get rich. So you can give it to the next generation, your children, the grandkids. What I saw in Bitcoin was you can build actual, generational, digital wealth. It's not gold or the stock market where there's a lot of maintenance. This is something that you can just hold onto and you can just pass on and appreciate in value. Something could happen where, eventually, countries start backing up their currency with Bitcoin. I recommend reading the Bitcoin white papers or The Bitcoin Standard. Maybe, we’ll see. But I'm predicting it’ll happen.

This conversation has been edited and condensed for clarity.

A version of this story originally appeared in the March 2021 issue of Allure. Learn how to subscribe here.

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