Rare and Intimate Live Fan Q&A | Youtube Makeup Star Michelle Phan

Yeah. Of course. You, since you're in front of me.

Just real quick. So how do you source your products? Are these companies that go to you to market their products by giving out samples? Or is it that you buy the product from them? Or is it hybrid?

It's a little bit of a hybrid. But more so, we have our sales team. They go out on foot in New York. And so I have an office in New York. They go out and they are constantly looking for the coolest new beauty brands that are underground. And this is also a philosophy that I really believe in. If you're gonna build a business, help the small mom-and-pop shops. Help them because these are the people that are providing more jobs than the big corporations. So we found a lot of really small, cool indie brands that probably would not have gotten any love from traditional outlets. And they always had something different. They always had like a different point of view in their beauty products than some of the other ones that you would see on store shelves and that most people knew about. So we would go to them, contact them, have a meeting with them, show them what we're able to provide, and that's how we were able to make that transaction. But we do have a dedicated sales team that are always on the hunt for the newest and coolest brands.

So is it all stuff that's not available in stores?

No, they're available in stores, but they're available on their stores. We are not a retail store. We're not interested in retail. We would rather push traffic to their site to drive more traffic so that they have a better conversion. Oh wow, so many. This is so hard. Okay, you, since I like your sweater. It's a nice color.

I'll start off by saying I wish I could use Ipsy, but it seems like it's for girls only.

We're thinking about making a mailbag.

Yeah, we're doing exactly that. I have like 5 Facebook friends right now where I see them share their No way! It's crazy to meet you. But anyway, my first question goes back to your YouTube days.

Yeah.

And how did that begin? Because I'm sure there was some— around growth at least, there was probably times where you were like, man, I don't have that many subscribers. So how did you actually get things going? And when did you realize, OK, this is serious?

Sure. Well, I didn't start seeing traction until I was able to quit my job. So right around the time when I started my YouTube channel— this was in 2007. I was 19 years old. It's crazy. Time really flies. So enjoy your youth, guys. Enjoy it. Hustle hard while you can, OK? 'Cause the older you get, you do lose a little bit of that momentum. But I was 19 years old. I was just hungry to create. I wanted another outlet to create. And art school wasn't giving me that outlet because it felt like there was a job. There were deadlines. And I wasn't really happy with the assignments. So I started shooting these videos. And I noticed that I was getting a lot of subscribers because my content was really strong. I had a lot of storytelling background because I went to school for this. And so I think that's why my content was so strong back then was because I was telling a story rather than just randomly filming a video. But I didn't see traction until I quit my job. And the reason why is because my content began to become more consistent. Instead of uploading once a month, I was able to upload 4 times a month or 3 to 4 times a month. But I couldn't just quit my job right off the bat because I needed to make a living. I had to put food on the table. So there's gonna be a moment in your life where you're gonna have to straddle between your passion project and your job. And I always tell people, just dip your toes in. Dip your toes into the water before you jump. You have to make sure it's the right temperature before you jump all the way in because it's all about timing and it's all about strategy. So when I was— Trying to become a full-time YouTuber, it was tough because Partners Program didn't exist back then. I wasn't making any money for 2 years on my YouTube channel. And so all my money went into creating these videos. But I knew that it was a good investment. I understood that idea. And I knew that every amount of money that I made on the side, I was really allocating it to my channel. And so sometimes when I'm at the grocery store, I would figure out, OK, should I buy this thing of ramen or should I buy this lipstick? And you have to make these sacrifices sometimes. And do it while you're young because you can make those sacrifices. When you're older and you have a family, it's tougher to make those choices. But while you're young, go for it. Be fearless. Take those risks. So the day I was able to quit my job was the day I broke even with my YouTube channel. So finally when I was accepted into Partners Program, I started making money. But at first, it wasn't a lot. It was like 10 cents a day, 25 cents a day. People think I was bawling out of control when I started, but I didn't. I mean, it's growing pains. But you know what? It's good because it shows— it's almost like a test from the universe. The universe is testing you. How hungry are you? How hungry are you to make 25 cents a day? This is money that people make overseas making our clothes. And so how hungry are you to make this amount of money and to work hard and to show your passion to me? And so, I accepted that challenge from the universe. I was like, you know what? I'm accepting this challenge. I am going to bust my—

You did.

Yeah. Yeah, I'm gonna bust my bags off and I'm gonna make this happen. I'm gonna do it. And full-time student, I was working. And then part-time job, I was doing it. And then any amount of time I had, instead of going out partying, I dedicated it to my channel. I started shooting all these videos. And then I started making a little bit of money, $5 a day. $10 a day. I told myself, if I can make $20 a day, that means I can quit my job as a waitress because I break even. 'Cause I was making roughly around $200 a weekend as a waitress, which is not bad. It's actually a lot of money for a college student. That's because I worked at a really risky— a really ritzy sushi restaurant. So there was a lot of nice tips. But I had to work hard for those tips. I was really busting my bags off and getting those tip money. But I understood and I knew that if I can just make $25 a day, that's around the same amount of money I would make if I were to work at the restaurant. And so I quit a day after our economy crashed in 2008, August. I quit. I went into work. And when everyone was holding onto their jobs for dear life, everyone was so scared. And I tell a lot of people, oftentimes when the economy is bad, that's when a lot of great ideas come. And that's when a lot of entrepreneurs will emerge because they'll lose their jobs and they have, you know, you're saved by zero. You have nothing left but to go up. And so I told myself, I don't want the safety net. I wanna remove the safety net. I wanna give this job to someone else who needs it more than me. And I want to, I want to really go after it because if I don't have that safety net, I, I, I have little room to fail. So I did that. I took that leap of faith. And I'm so glad I did that because here I am today telling you guys to do the same. Yes, you.

So you're very passionate about content creation.

Yes.

My question is, I guess it's two-layered. What do you think is the future of content? Do you think it's still gonna be on YouTube? Is YouTube gonna be the most popular place where everybody shares content? To follow the question is that, as all of us entrepreneurs here are trying to create platforms, if we're trying to make content platforms, what can we do to attract more really, really talented content creators?

Right. Well, I mean, you just answered your question right there, the second part of your question. Early adopters, really getting people to adopt to your platform, getting creators to adopt to your platform. This is what made YouTube so exceptional, was that they created a community of user-generated content. And they incentivized them with Partners Program, where they can make money. And there was a revenue split. Sorry. Everything good? Sounds good? I can repeat that if you need me to. You guys good? Good to roll? We're good? OK. I'm going. Because I want to say something. I'm going to forget it. So the first part of your question, it's true. Where is content gonna go? How is it gonna evolve? And where and what platform is it gonna be on? What platform will stay relevant? There's something that I know since I was 15 years old. I've been online since I was 13, but I didn't really upload content until I was 16. I had my own blog. So this was earlier, before my YouTube channel. There's one thing I know for sure is that platform, they come and go. Platforms will come and go, but content, content is king. You look at Disney, Disney movies and how they've transcended in film and then they became VHS and then DVDs and then Blu-ray and now they're in the cloud. And before DVDs, you had TV. And before TV, you had black and white TV. And before that, you had radio. So the device and the platform where content lives will evolve throughout time, which is great. will always remain the same. So the quality of storytelling is the most important. And this is something that I really believe is intuitive with each creator. Each creator will have their own way of storytelling. And if you create a platform where you incentivize these creators to just do what they do best, create, you will then have amazing adoptions from all creators. And that's when you can have a real genuine community that's authentic and that's loyal to your platform.

So you think the partnership program really incentivizes a lot?

Absolutely. This is something that Facebook hasn't really adopted yet. But if they do, if Facebook has a partners program, if they incentivize— if Facebook incentivizes content creators, you bet there's going to be a lot of user-generated content, quality user-generated content. So you've got to incentivize your creators because they can't make stuff for free. They need a little bit of money to make these things. Yeah.