Michelle Phan (L) and Kelly Osbourne (R) on stage at Forbes' Under 30 Summit in Philadelphia (Photo... [+]
Michelle Phan may have got a humble start on YouTube, but she is well on her way to helming a billion-dollar unicorn: her subscription beauty sampling business, Ipsy, last month raised $100 million to value the company at over $500 million.
"I didn't have a roadmap, I just did it because it was meaningful to me and I wanted to disrupt the beauty industry," said Phan, 28, speaking to an auditorium full of 1,500-plus high-achieving millennials at Forbes’ second annual 30 Under 30 summit in Philadelphia.
Phan, who began posting YouTube makeup tutorials eight years ago, swiftly grew a following which now exceeds 8 million subscribers.
"I thought, if [YouTube] is going to be the global television of the future, I need to build my brand here," said Phan, who uploaded her first video, a natural makeup tutorial, from a humble grainy webcam in 2007. "Within the first week, 40,000 people watched it and hundreds of comments came in and that's when I realized I'd found my calling."
Phan gained notoriety with her instructional posts, including a Lady Gaga makeup tutorial. Soon enough, she was signed by
"Influence is the new power--if you have influence you can create a brand," said Phan.
In conversation with television host and fashion designer Kelly Osbourne, the duo expounded on how sharing can equal success. Both were catapulted into the spotlight and have gained notoriety from being in the public eye, Phan through YouTube and Osbourne for her family's reality TV show The Osbournes.
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For Phan, her most lucrative business to date has been founding Ipsy in 2012. Doubters were not convinced there was an appetite in a crowded subscription marketplace, considering established competition such as BirchBox and Dollar Shave Club, but today Ipsy ships out over 1.5 million of its monthly "glam bags" within Canada and the U.S.
"The beauty of the internet is there's a niche market for everything and if you can focus on it you can build a sustainable and viable business of it," explained Phan.
Phan's focus remains on creating content for hungry users through Ipsy open studios, which offers aspiring beauty vloggers free production resources in the hope of identifying potential stars. Like any savvy entrepreneur, she also has her eye on mobile: "In 2014, 50% of my Ipsy subscribers subscribed through Ipsy.com on desktop," said Phan. "This year over 70% subscribed through mobile."
For two women who have made a career out of their personal brands, both were candid about how being themselves in the public eye could often be challenging.
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"Most people in this room know that I get myself in trouble with my mouth a lot," joked Osbourne, 30, who pioneered reality TV The Osbournes show, for which they won a 2002 Emmy Award for Outstanding Reality Program. An outspoken co-host of E!’s hit show, Fashion Police for the last five years, Osbourne recently left the program after a reported disagreement over allegedly racist comments made by co-host Giuliana Rancic.
With her 8 million subscribers, Phan joked "every single one of them has seen me without my makeup on."
And though often negative chatter remains a challenge for both, Osbourne and Phan believe the internet is crucial to building their businesses.
"The internet is where you can find people who are authentic," said Phan, who has raised over $103 million to date for Ipsy. "Some 87% of women today trust in influencers in YouTube over celebrity ads and endorsements and it's only going to grow."
Phan has already monetized her fans; Osbourne is now hoping to translate her 4 million
Both women feel beauty can be a meaningful--and lucrative--endeavor.
"Ipsy was a platform that was built for this generation of people who want to express inner and outer beauty," explained Phan.
"Makeup is not a mask that covers up your beauty, it's a weapon that helps you express who you are from the inside."
