Episode 12: Michelle Phan | A Second Act
Updated: May 9, 2019
I needed to end my online persona...we all have to grow up. We can't just live in this fantasy world forever. Even that little girl that was in class that was daydreaming in her head. She has to wake up to reality.
Below is an abridged audio transcript for our conversation with Michelle Phan, which kicks off Rock the Boat's Season 2.
Welcome to Season 2 of Rock the Boat! We are excited to bring stories about Asian Americans who are making waves in the media and entertainment industries for this special mini-series, just in time for Asian Pacific American Heritage Month.
Our first episode is a very special guest: Michelle Phan! Yes, THE Michelle Phan - former YouTube beauty blogger and co-founder of Ipsy, now CEO of Em Cosmetics. Michelle started blogging and sharing beauty tutorials in 2007. Today, she has a cult following of close to 9 million subscribers. In total, her videos have accumulated over a billion views.
Michelle is known for her makeup tutorials, but she often infuses her own creative takes on looks inspired from pop culture icons such as Lady Gaga, Sailor Moon, and Barbie (which to this day is her most viewed video with over 67 million views).
But something happened several years ago. Michelle stopped posting on her YouTube channel. It was an odd disappearing act and surprised a lot of her fans. The last video Michelle posted on her YouTube channel is an explanation, in her own words, of “Why She Left”.
Much of our conversation with Michelle is about getting past that first chapter of her life, starting over, and owning her second act. She also shares some lesser-known stories about:
Being ridiculed in her early days as a blogger,
The alter-ego she developed,
Some of the hard lessons she learned from her first foray into business with Lancome,
What it felt like to intentionally step out of the spotlight, and
Where she prioritizes her energy these days
I. Michelle's Origin Story
Lynne: We met Michelle at her Em Cosmetics office in Culver City, California. She strolled in with a noticeably relaxed, cool swagger.
Michelle: My name is Michelle. I always feel awkward introducing myself to people because I don't even know what the right label is. I can't really say I'm a YouTuber because I've taken hiatus for two years. I am an entrepreneur but don't do the day-to-day entrepreneur business. I hire GMs to run the day-to-day.
I'd say that I'm an investor but at heart, I'm a creator because I truly believe a good entrepreneur is a creator at heart. They're creating solutions, they're identifying problems in certain industries and they're bringing something of value. So at heart, yeah, I'm a creator. That's who I am.
Lynne: Michelle, like me, is a fellow Floridian. She grew up in Tampa. But she had moved from Oakland, California right before 2nd grade, and was used to having a lot more Asians around her.
Michelle: The first day of school when I was in Tampa, Florida was the first time I realized I was Asian. I guess because everyone just looked at me differently and I felt like a fish out of the fishbowl. I just felt so out of place. That was the first time people started to make fun of me. They would call me, you know, the typical Asian names like ching chong and all that. They would call me that and I just felt so ashamed of who I was so growing up.
I'm sure if someone were to find my old teachers in elementary school and middle school, they would say that Michelle never spoke in class. I actually remember this one time I was in fourth grade, my teacher brought me up in front of the classroom and he put his hand on my on my shoulders. He said,
"Everyone in class should be like Michelle, just quiet."
And so I guess in a way, a lot of the teachers liked me because I just never caused any problems.
I just became invisible. And I think in a way that's how I became so good at storytelling because I would just daydream in my head. I would go off into my imagination and occupy my thoughts there.
Lynne: While she was daydreaming, she was also putting pen to paper. Michelle loved to draw and classmates noticed. They would ask her to draw designs for various things like their school dance dresses. She became known as the school artist.
Michelle: I would just draw for people because I felt oh, this is something I can offer people I can and that's totally cool. Like I can be an artist for my class and that was something I just really loved: drawing and creating.
Lynne: Michelle's family didn't have a lot of money, so she was encouraged to pursue a lucrative career in medicine from a young age. She even went to a magnet high school focused on the health sciences.
Michelle: I didn't like it. I'm not gonna lie. It wasn't something that I enjoyed. I didn't enjoy going to school learning about things that didn't inspire me. I was filling out my college papers and I thought to myself, "Dang. My whole life is planned out. Like the moment I fill out these papers and I start going to college and I start pursuing this, the next ten years of my life is already planned out."
I'm a fire sign, an Aries, and I like spontaneity. I love to wake up the next day and not not know what my life is going to be like because tomorrow I could die. And I want to be able to live my life to the fullest. But when I realized everything was already planned out, that idea just depressed me.
I found college papers for this art school and filled those out instead. I went home and told my Mom, "I didn't fill out the other paperwork. I'm sorry. I want to go to art school."
And she was crying. It was so dramatic. I got on my knees and I told her, "Mom, I'll figure out a way to make money while still pursuing what I love." Meanwhile in my head, I had no idea how I was going to do it. But I was so confident when I told my Mom. She said "Okay, I believe you" because she knows my will. I have a very strong will. If there's something I want to do. I'll do it, even if it's an impossible task; I'll figure out some way to achieve it.
Lynne: Michelle did end up going to art school at the Ringling College of Art and Design in Sarasota, Florida but she took a year off first to build up her Xanga blog - remember that?! Before her YouTube channel, Michelle had a popular Xanga blog where she would post photos of her artwork, her life as a gamer, and beauty hacks. That was the first hint to what her audience wanted.
Michelle: I knew they loved these beauty hacks. I did this one beauty hack on using aspirin as a mask on your face if you have acne because aspirin has salicylic acid in it. You can dissolve it, add honey to the aspirin, and it dissolves. Then you can apply it on your face leave it for a few minutes, rinse it on your face and it feels really smooth. It feels tingly and smooth like baby butt skin. And that became super popular. I just read it somewhere online on a forum and I tried it out myself and it worked. I tried it on my brother who had acne and it worked on him, so I made it into a post.
II. The Beautiful Exchange
Lynne: Turns out all of this was early user research for what would later become her YouTube channel. Timing also helped because the year MIchelle started at Ringling was the first year the school gave free Macbook Pros to all incoming students. With that, she uploaded her first makeup tutorial in 2007 - and the rest is history.
Michelle: I filmed my first makeup tutorial because I got turned down at a Lancome beauty counter. I needed a job and they were hiring. I did the whole interview and passed the makeup test, but I wasn't hired because I didn't have enough sales experience.
Even though I was really sad that I didn't get the job that didn't deter me away from my love and passion for beauty. I knew I still wanted to do something in beauty. And so when when I was just messing around with my webcam, I thought, maybe I should film some makeup tutorials and post it on my on my blog because people were asking me how I do my everyday makeup look. So instead of doing a normal blog post where I took pictures, I decided to film a full video, edit it, and add music/subtitles and everything. So I did that, self-taught and everything.
I uploaded to YouTube and in the first week, I got 20 to 30,000 views. Within a few months it got up to 500,000 and then up to a million.
It felt like I struck gold. It really did. Wait, people actually care? Like they actually want to watch me apply makeup on my face and they want to see more?
I mean, this was back in 2007. So no one even knew how to do a smokey eye, like a smokey eye was considered advanced makeup. Today it's considered very basic. But people would ask me to teach them how to do a smokey eye and so that helped me curate the tutorials.
That was really the beginning of my journey as this online creator, this two-way relationship that I had with the viewers. They gave me purpose and I gave them knowledge. And it was this beautiful exchange.
Lynne: Even though she was living out this beautiful exchange online, her real life interactions weren't always so pretty.
Michelle: I had a really bad experience at this college party. I don't want to name any names, but I was invited by this pretty popular girl in college. At the time, no one knew about my YouTube Channel. I didn't tell anyone. It was kind of embarrassing...today, it's cool to be an influencer but back then people would see you as being conceited. so I didn't want people to see me that way. It was kind of like my online alter ego, my Batman. And I was Bruce Wayne during the day.
At the party, I remember there was music playing and all of a sudden I heard my makeup tutorial being played over the speaker. And then she played the tutorial. A few other people were laughing at me. They were condescendingly mimicking my voice and just making fun of me. I remember no one was there to stand up for me. I was so upset. So I left that party. I remember when I got home I was like, "F these people. I'm just going to play like World of Warcraft and I'm just gonna make YouTube videos."
Lucia: I really admire her resolve. Instead of being deterred by the bullies and naysayers, she's going to carry through her mission whether people like it or not. I also loved how she likened her online persona to Batman, a superhero.
Lynne: Yeah and through sheer willpower, she'll make something work.
I'll walk through fire to do something. I'll literally sacrifice everything. I'm not scared. I'm not scared to fail. If you want to achieve something big, you have to risk everything.
Michelle: For me, I just knew that if I wanted to achieve something, truly, I'd have to be ready to fall flat on my face and get right back up and just do it again and again until I achieved it.
III. Michelle Phan: The Brand
Lynne: In the early days of YouTube, there was no opportunity to make money. And even when AdSense rolled out, the margins were... pennies at best.
Michelle: There's this misconception that a lot of YouTubers make a lot of money, but they don't. Not in the beginning. In the beginning, I was making 25 - 50 cents a day. It was really nothing. It wasn't until I started to post more videos consistently and also interacting, commenting, replying and having this dialogue with my followers that more viewers started coming in. My CPM got higher and that was when I was starting to make a few dollars a day, like $5 - $10 a day. Eventually I told myself that if I can make $20 a day, I can comfortably quit my part-time job as a waitress because I'm breaking even at this point. So I can free up my weekends to film and edit more videos.
After finally breaking into the $20 a day mark, I came in to work and gave them my two-week notice. I said, "Thank you for everything. I'm going to pursue this YouTube thing". No one really took me seriously. They just thought really, that's how you're going to make money?
I just knew it. But back then no one knew that this was possible. People didn't make money off the Internet. It was this new Wild Wild West that people didn't really comprehend but I just knew it was the future. I knew early on that YouTube would essentially become the TV for the youth and everyone would watch YouTube in the future.
Lynne: Michelle's prediction turned out to be true. The word influencer may not have been coined yet, but it was around this time that the rise of the influencer began to unfold. Essentially anyone with a camera could build their own following and meaningful brand. Michelle was leading the pack.
As her channel began to take off and she gained trust from millions of fans, big brands like Lancome reached out. They smelled opportunity.
Michelle: This was my entry way into the business world because I had no idea about what business was. I wanted to be an artist. I didn't want to become a businesswoman. So I was kind of thrust into this world. I told myself I should take this opportunity to learn as much as I can. This is like grad school and I'm getting paid for it. So that's what I told myself, just learn how this industry work. And so that's what I did.
I learned about how they spent an ungodly amount of money on their YouTube channel and their videos and how they were getting just a few thousand views.
Meanwhile my video that I was filming on my webcam, like really shitty quality, was getting 800,000 views and they just couldn't understand why.
Even I was thinking, huh. I wonder why. Because you would think higher quality content and amazing editing and the best directors would get better views! But why is it that I also as a viewer would rather click on a video that looks normal?
I think it's because this is a new type of media (user-generated content) and the idea that you want to watch something that's real. At that time, videos like that didn't exist because we were the programmed generation. We were used to seeing overly programmed content.
I realized this could actually be an interesting business for me to branch off into, where I'm creating really great user-generated content that already has a built-in audience that is highly engaged. People follow me because they see me as a real person rather than a model, rather than an actress, rather than a brand. I'm a real person. If I had to get a mascara recommendation, who would I believe? A spokesperson model or my best friend? I would believe my best friend.
So it just made sense in my head. I knew this could be a new type of business where I'm creating these videos for these brands.
Once I reached a million subscribers, I felt comfortable to have some sort of business outside of YouTube. I was making money off of my videos, but it was based on my human bandwidth. I had to be in the videos. If I wasn't in the videos, I was going to get the same amount of views and I only have a short amount of time because I'm human and I can't do this forever. So I told myself that I need to figure out another revenue stream outside of my bandwidth and that was when I met my ex-business partner of Ipsy.
Lynne: Ipsy, for those of you who aren't familiar, is a personalized beauty subscription business that provides subscribers with a monthly bag of cosmetics samples for $10/month. Michelle was co-founder and the face of the brand, but the idea really hinged on there being a whole hive of beauty bloggers. These influencers would create content to promote Ipsy and its curated products, generating millions of impressions. The strategy paid off. Today, Ipsy is valued at over $800 million and its influencer network spans over 10,000 strong.
Michelle: I was really lucky with Ipsy because we raised $2.7 million at the beginning. We technically didn't need to raise after that because we were we were profiting from day one. We had a really great business model, even though the margins weren't that great, the volume was high and millions of people were paying $10 a month. We were able to scale and we were cash flow positive from day one. So we were lucky, like literally lightning in a bottle. But a lot of other businesses don't have that capacity. They don't have that luck.
Lynne: At the same time, Michelle was also developing the Em Cosmetics Brand with Loreal. But she says she felt more like a celebrity endorser than a true collaborator.
Michelle: When we launched the brand, a lot of my viewers said they just felt like there was a huge disconnect. The price point, the design, just everything because my videos are known for being very aesthetic. That's what I was known for and people just didn't see that. It didn't resonate in the brand and I knew that. I wasn't really happy with design.
But what can you do? I'm not the one who's putting money into the brand so I can't be mad at this opportunity. It is what it is and thankfully because it failed, I was able to acquire it through Ipsy. And then two years ago, I left Ipsy and I acquired Em through Ipsy and now I fully own the brand myself
Lynne: Yep you heard right. Michelle bought back her brand, Em Cosmetics.
Lucia: She's such a boss. I can see why not having any control over something that's so personal would be a problem for anyone with a vision.
Michelle: I had to go through this entire journey to understand that because I also thought having a brand with a big corporation would be amazing. But it's only amazing if you don't want to be hands-on. If you are the type of person with a very strong vision that you want to stick with, it's a lot of battles you have to fight and it's exhausting. Now that I own the brand a hundred percent, I don't have any other investors.
It's been such a blessing because if there's something I want to do, I say , "Hey guys, I want to do this. Like that's it." I don't have to follow through with anyone else.
This whole journey has taught me that if you truly have a strong vision and you have a product that you want to produce fully you have to do it yourself, bootstrap it yourself as best as you can.
The moment you start raising money and bringing in outside money, you get all these other people who want things from you. They want to profit as much as they can, so they can make their investment back. And then it becomes about the money. What ends up happening is that everyone is trying to get that unicorn evaluation. Everyone's trying to race to get acquired. And they lose sight of what it is that they're building because they need to get acquired because they raise so much money and they want to make all the investors happy.
Lynne: Ultimately Michelle's business advice boils down to one single world: ownership.
Michelle: When it comes to creating something small, if you want a cult following you have to have as much ownership. If you don't have ownership, there's too many cooks in the kitchen, too much red tape. You can't grow authentically and you lose sight of the original intent.
IV. Taking a Break
Lucia: So it was around this time that Michelle took a break. What kind of caused that?
Lynne: Well I think, just as you can lose sight of the original intent of a business, you can also lose sight of yourself. It was around the time that both of Michelle's companies Ipsy and Em Cosmetics were taking off in 2015 that Michelle encountered an impasse in her own personal life.
Michelle: Right after my Forbes cover, my Nylon cover, I was all over TV. Everyone was talking about beauty YouTuber building a billion dollar unicorn company. It was just becoming too much for me. I was getting too much attention and I didn't want it. I'm that shy girl in class that never spoke.
So I felt very uncomfortable with all the people who were reaching out to me. It was just getting harder to like go out in public. It felt like I was under this magnifying glass.
Everyone was just observing me and it scared me. It scared me because for the first time I wasn't sure if I was going to have a normal life after this. Is this what I really want for my life? And that was when I decided that this is a good time to leave.
I want people to remember me at my peak. This is when I should just disappear. So that's what I did. I disappeared and during this time all my companies were doing really well, so they didn't really need me for their day to day. Everything was operating.
I knew my YouTube channel would be okay. I had been doing it for 10 years straight. I said, I'm sure my viewers will understand if I take this little break. Meanwhile, I didn't realize it would be like a two-year hiatus because the moment I took my break, I started to live for the first time.
Lynne: Michelle ended up traveling the world for almost a year. During that time, she never posted anything, which is a far cry from the usual social media rat race she was accustomed to. No longer distracted by the digital hum of comments from her community, she could bring her attention to the hum of her own thoughts.
Michelle: There were times when I thought to myself, I should work. I should film videos. I should think about making content. But then I don't need to because I'm not inspired and also I'm only making content just to make content. At this point I'm no longer sharing a message. It's just to fill in this gap. And so it was really hard for me to make this disconnect because I didn't want to disappoint anyone. I was also in a really bad mental headspace.
I finally had time to reflect for the first time in my life because before I didn't have any free time. I was always either editing, planning something new like a video, or watching online content to get inspired. I never had a moment to just pause and ask myself, "How am I feeling today?" And you know, just process my day. I didn't in like 10 years. It's almost all a blur. I don't even have a lot of memories of great things I did. It was just work.
However, in the past few years that I've taken this hiatus, I've had so much time to grow. I even had time to address a lot of my unhealed traumas. I had a lot of childhood traumas like Daddy issues because my father wasn't even there for my Mom when my brother and I were born. That just sets the tone of the type of relationship I had with my father. And then my stepfather was even worse. I just had a lot of issues with fatherly figures in my life.
So there's a lot that I had to face. I had to face myself again, and thankfully, I had really good friends, family, people who loved me to support me because it was like a breakdown. I didn't have a mental breakdown publicly, thankfully it was private. But there were a lot of tears and a lot of processing and crying and just processing everything.
Lucia: It felt like a lot that she had to personally process. Letting go of her online persona must have been really hard. It was a character she built. Earlier she mentioned it was like being Batman, except it felt like a corrupted, commercialized version of Batman.
Lynne: Much to the dismay of her fans, Michelle knew she needed to grow beyond her YouTube persona.
Michelle: I can't live in my bubble anymore. I need to be an adult. I have to grow up. Oftentimes I see within the YouTube space, a lot of colleagues stay within their character.
So they have to kind of act that out, being a kid, being a teenager - even though they're as old as me. It's just not healthy in the long run, being this character to appease your viewers. You have to learn how to separate that character from yourself. Oftentimes, they don't know how to separate it because they have to film every other day. It's mentally exhausting and draining and that's why you see a lot of burnout on YouTube because it becomes part of you.
I think my hiatus was really important for me to develop as a person because I always tell people if you want to take a step forward, sometimes you have to take two steps back to kind of see where you're going.
V. Michelle's Words of Advice
Lucia: So does this mean we won't see YouTube videos from Michelle again?
Lynne: Michelle says she'll return when she's inspired to share new ideas. Until then she's back at the helm of Em Cosmetics and laser focused on fulfilling her creative vision with modern makeup essentials.
Here's what Michelle's learned from her first act:
Michelle: Life is not a competition. It's not a race. Some people will make it out to be like that. But that's because they're trying to compete with themselves and with everyone else. You don't have to accept that as your reality.
I've learned just to enjoy life because that's really what matters the most the moment before you die.
I've learned to not be so reactive. I think a lot of the mistakes I've made in my career was because I made a reactive decision. But you also don't want to be too logical because you have to take into account human emotion.
Finally, take the time before you make a decision. You don't have to say yes to everything, take a beat.
Christopher Walken once said,
"If only you knew how easy people get over a death, you'll stop living your life trying to impress people."
And it is so true. Like even with Karl Lagerfeld, for a few days the whole world mourned and then everyone got over it. They moved on and that's how it is with every single person who has died. Everyone has moved on and I realized wow, that's so true. Why do I care so much about impressing people when one day when I die, no one's gonna give a shit about me? I should just enjoy this moment now, enjoy the present, and enjoy the memories that I'm going to be making with people.
Lynne: Whatever it is, we know Michelle’s second act will be right back at the core of who she ultimately is: a creator.
Listen to Michelle's full episode on Anchor, iTunes, Spotify, or wherever you listen to podcasts!