“I kind of view bitcoin as similar to YouTube, which was part of the decentralization of content,” said beauty mogul Michelle Phan. “[Bitcoin] is the decentralization of power.”
Phan, who turned online beauty tutorials into a $50 million business, learned about bitcoin while researching gold in 2011. When Phan started raking in money on YouTube, she wanted to diversify her holdings.
Phan was attracted to the “philosophy of bitcoin” and already had a knack for teaching online. Jack Dorsey is perhaps the only other bitcoin mogul with a comparably mainstream reputation. Likewise, Phan now has a hand in several complementary companies, including an investment in the music startup Thematic, which helps YouTubers use music without violating copyright infringement.
Since the beauty industry has yet to recover from the makeup crash of 2019, it’s increasingly common for women to shop online or run direct-to-consumer brands predominately sold through the social media strategies Phan pioneered. Fans can expect her to continue investing horizontally, in different components of the internet-native retail chain.
In some ways, the beauty industry is now comparable to the crypto industry. Digital marketing is dominated by social media influencers like Phan, who modeled how such influencers can make money without compromising on honest product reviews. Beauty product consumers create passionate, highly engaged online communities. (Debates about facial scrubs and lipstick on such forums can be as controversial as the most toxic Bitcoin Twitter debate.) In that world, Phan is seen as much more than a lipstick peddler. She broke the monopoly once held by fashion magazines to shape makeup trends.
Beauty influencer Roxette Arisa, who has nearly 1.2 million YouTube subscribers and marketed Em Cosmetics, described Phan as an “inspiration” who popularized themed tutorials, like “Sailor Moon” or “Bad Girl,” and beauty content aimed at more than triggering purchases. Phan has a holistic, health-oriented approach, distinguishing her makeup brand through educational content as well.
“We’ve seen a huge shift from traditional sources [like magazines] to digital media,” Arisa said. “She [Phan] was doing stuff no one was doing at the time. Her production value was so high and she was always coming up with different looks.”
While tech bros in Silicon Valley chase venture capital by promising to “disrupt” a sector, Phan actually did it, completely bootstrapped. She retained a loyal audience for more than a decade by inviting fans to view themselves as self-taught experts, too.
As such, Phan started using her social channels to promote bitcoin when the recession started in March. This is, in part, because her businesses and brand were finally mature enough to afford an unconventional risk. Most beauty influencers focus on makeup tutorials, not financial literacy. Plus, Phan said an economic crisis like this one is “when bitcoin really shines.”
“Now my viewers are hungry for more than makeup and skincare. They want to know how to protect their purchasing power,” Phan said. “I am investing a lot of my time and energy into helping promote mass adoption for bitcoin.”
For fans like crypto-savvy investor and skincare connoisseur Katherine Wu of Notation Capital, Phan has a trustworthy brand that Wu is excited to see expand to financial education.
“She very much shaped my relationship with makeup, skincare and, in some ways, charting an off-beat path,” Wu said. “Michelle has a very different reach and audience than people like Jack Dorsey and Andrew Yang.”
From Wu’s perspective, Phan isn’t just another famous bitcoiner. Phan makes the technology seem less intimidating. In fact, she makes it seem completely normal, in a good way.
ALSO FROM CONSENSUS MAGAZINE 2020:
The CoinDesk 50, by CoinDesk staff
Crypto in Corona: From Switzerland to Liberland, by Jeff Wilser
The Men Who Stare at Charts, by Ben Munster
The Changemaker: Glen Weyl Puts His Radical Ideas Into Action, by Jeff Wilser
The Man Who Saw a Currency Cold War, by Jeff Wilser
Generation Crypto, by Jess Klein
“Bitcoin has enabled a lot of people to pursue career paths in ways that were not possible before,” Wu said, adding many aspiring entrepreneurs are inspired to follow Phan’s self-sovereign approach. “So she could play a bigger role in bringing her core base into crypto.”
Phan is building a retail empire by incorporating bitcoin, a public good created by a group outside herself, into her broader business model. She said she’ll start with educational content, then potentially move on to working with e-commerce startups like Lolli and Fold, which helps users earn and spend bitcoin.
“Of course I want to accept bitcoin, but I feel like consumers aren’t ready yet to purchase things with their bitcoin,” Phan said.
Instead, she believes now is the time to focus on teaching people how and why to hold their own bitcoin. She’s already earned fans’ loyalty for years and can grow with them as the economy changes. Plus, as an employer with a dozen people on staff, Phan also needs to prioritize revenue and stability for her cosmetics brand during the COVID-19 crisis.
“It’s benefited us, being direct-to-consumer, because that’s what we’re used to. Anyone in retail right now is suffering,” Phan said, adding that bitcoiners’ self-sovereign ethos shaped her entrepreneurial approach. “The beauty of my brand is I own it, I own 100% of it.”
It was a hard road that led Phan to own a lucrative brand that she controlled enough to take a risk on promoting bitcoin.
She told Racked her father had a gambling problem and, as the daughter of Vietnamese refugees, her family “grew up poor.” Phan uploaded her first makeup tutorial to YouTube in 2007, when she was 19. She was thousands of dollars in debt, but started earning roughly 25 cents a week from her videos within the first year.
As her popularity grew, Lancôme hired her in 2010 as its official video makeup artist. In 2011, around the time she started tumbling down the bitcoin rabbit hole, Phan also co-founded the beauty subscription company IPSY, which raised over $100 million in venture capital. It is still considered one of the leading beauty startups in the market today.
When Phan launched her first product line with L’Oréal in 2013, it flopped because it was deemed too expensive. Phan was already juggling a successful company, IPSY, the paparazzi and her model boyfriend, Dominique Capraro, who speaks Italian and could grate cheese on his abs. Unlike the lam-bros chasing women and fame, Phan had it all before she took a risk by going public about bitcoin. She could have let the L’Oréal blunder fade into history and ditched startup life for the red carpet.
But Phan is a builder, not a celebrity. She bought back the cosmetics line in 2015, eventually relaunching Em Cosmetics as her own company, running it her way. By 2019, the brand was so popular some products sold out.
Phan played a pivotal role in decentralizing the beauty industry, once dominated by retail gatekeepers and fashion elites. Now a generation of women are making and selling products with direct-to-consumer or peer-to-peer distribution strategies. Next, the 32-year-old bitcoiner set her sights on changing how people talk about money.
“You’re buying digital real estate. … There could be future cryptocurrencies backed by bitcoin, but bitcoin is the reserve,” Phan said. “Bitcoin is the truest money that we should have had since the beginning of time.”