Michelle Phan wanted to disrupt the beauty industry, but had no resources, no entrepreneurial experience, and no clear business model. What she did know, though, was that Youtube was the global television of the future, or at least the 2010s.
More than a decade later, Phan is a globally recognisable figure, the co-founder of Ipsy, a beauty business that was most recently valued at $800 million in 2016, and has a personal net worth estimated at over $50 million. Most importantly, she’s built a personal brand that has empowered her to pursue her own interests with a freedom that many other entrepreneurs don’t enjoy.
Building a brand
Rather than launching a business right away, Phan began as a vlogger, creating makeup tutorials on Youtube starting in 2007. She was immediately successful, garnering 40,000 views in her first week. Over the next few years, her content went viral several times, bringing her to over 1 million subscribers by 2010. While she stopped actively posting on Youtube in 2017, she built a subscriber base of 8.9 million people before that point.
Rather than tying her identity to a company and a product, Phan quite literally built her own brand. This direct contact to the public, and her market, essentially gave her the personal influence to make any business she chose to launch or support in the future succeed. In 2011, she realised this potential by co-founding MyGlam, a beauty sampling business that would become Ipsy in 2012.
Following Phan’s own example, Ipsy is designed to operate on this influencer principle. Rather than spending heavily on advertising, Ipsy relied on the influence of Phan, a few other major influencers, and a vast number of beauty vloggers to bring in new subscriptions to the business’ product.
These associated vloggers were largely unpaid, being compensated through products, mentoring, and access to the Ipsy coworking space. Their association with the company, and with Phan, helped them to boost their own viewership, and associated incomes. Essentially, Ipsy not only relied on the influence of a large number of vloggers to sell products, but also compensated those vloggers through its own influence, which translated to actual income only when leveraged appropriately.
Leaving for Em Cosmetics
Like many entrepreneurs, Phan found herself at the top of a business that she helped found, but that wasn’t really her own. Her co-founders and investors have their own visions for the future, and success in this kind of enterprise typically means compromise, rather than self-actualisation. Many entrepreneurs are uncomfortable seeing their businesses become something other than what they identify with, but many have little choice but to remain if they want to pursue success. Phan’s most important business asset, however, is her personal influence and individuality.
In 2017, Phan announced her departure from Ipsy, citing the desire to pursue her own interests, and a need to escape from the restrictive red tape of the company. Also in 2017, Phan acquired Em Cosmetics from L’Oreal, with whom she co-founded the brand in 2013. Now 31 years old, and still fairly early in her career, she is poised to pursue success on her own terms, at the head of her own business.
What we can learn
Most entrepreneurs pursue business success by developing a range of business skills, from building investor relationships, to administering businesses, to developing novel products. Michelle Phan has proven herself capable in all of these, but her true focus throughout her career has been on building her personal brand, and pursuing her personal definition of success.
A 21st Century form of entrepreneurship
At Em Cosmetics, Phan is developing new and innovative beauty products with the aim of disrupting the industry. Unlike more traditional entrepreneurs, though, Phan’s success is based in her direct relationship to her market. What her business specifically does within the beauty industry, and the products she sells, come second.
This personality-driven mode of doing business is by no means new. The legitimacy with which Phan does so, however, is definitely new. Unlike a traditional celebrity brand, Phan’s success as a celebrity and as an entrepreneur is built from the ground up, within her appropriate market. As a beauty celebrity who entered the beauty business, she actually is an expert in her field. It provides us with a clear view of exactly what kind of power influencers have within their industries, and how that influence can be leveraged to support entrepreneurial ambitions. Both for influencers seeking to become entrepreneurs, and for businesses seeking to leverage influencers, Michelle Phan’s career provides invaluable insight.