Michelle Phan: Beauty, Disruption, and Digital Empires

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August 12, 2016

Michelle-Phan

Michelle Phan is beauty’s digital darling.

Through YouTube and makeup ingenuity, she has given women across the globe the ability to transform themselves into anyone they want. Now her startup Ipsy is revolutionizing the way consumers discover beauty products. Through monthly “glam bags,” the service is providing millions of subscribers with hand-picked makeup samples tailored to their individual tastes.

In a world that bombards consumers with an infinity pool of beauty products, Ipsy plays the guiding hand. It recently raised a $100 million Series B, and now commands a towering $800 million valuation. Michelle’s other ventures are making big splashes in video, music, and cosmetics. We chronicle her adventures in disruption below.

Digital Beginnings

michelle phan youtube

Phan’s beginnings are the stuff of YouTube legend. In her freshmen year of college, Phan was already an accomplished makeup artist. She had been hooked on the art ever since her mother allowed her to try eyeliner at the age of 14. However, when she applied for a job at a Lancome counter, she was denied for a reason many undergraduates are all too familiar with: lack of experience. Instead of being pushed down by the rejection, she took to her camera and began experimenting with makeup tutorials on YouTube. As we all know today, the world was blown away.

Phan was insanely good – teaching viewers how to create astonishing semblances of anything from Snow White to Angelina Jolie. She was also media savvy. Her videos were linked with ongoing trends – from holidays to celebrities – and she responded directly to fan requests. As a result, she became the internet’s supreme authority on makeup and one of YouTube’s highest paid stars.

Venturing Beyond

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Michelle now has her sights on revolutionizing beauty. She founded Ipsy in 2012 after fans bombarded her with questions about what products to use. The company is a subscription-based service that charges members $10 a month for a “glam-bag” of samples handpicked from Michelle and other stylists. Unlike rivals, Ipsy does not use ads. Instead, it deploys a network of video influencers who demo the products through open studios. The network encompasses some of the largest digital personalities in beauty, and according to CEO Marcelo Camberos, has already drawn in over 1.5 million subscribers.

While over 700,000 beauty products are submitted to Ipsy every month, only stylists’ favorites are included. It also tailors each bag to user’s individual preferences. Shoppers no longer need to sift through hundreds of products to find their perfect fit.

Diva Momentum

ipsy founders

Ipsy had previously posted $150 million in annual revenues with just $3 million in funding. Having raised $100 million in Series B last September, its progress may soon skyrocket. President Jennifer Goldfarb plans to leverage its funders’ connections to rev up its network of 10,000 digital influencers. “Women are wanting less and less an authoritative perspective. They want something that’s personal, they want to follow someone’s advice who they really connect with,” Goldfarb says.

The Big Picture

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Phan is disrupting in more than one vertical. In video, she recently launched ICON, a global online network. In music, she is lending her social media genius to music artists through her new label Shift Music Group. Both ventures will leverage the power of social media, and distribute content through a plethora of platforms.

Phan appears ready to thrive regardless of changing environments. Even as the future of YouTube, the birthplace of her empire, appears tentative, she remains resolute. “Platforms will come and go, but content is king,” she says. “At the end of the day, I’m platform-agnostic — I go where my followers are.”

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