Even though [my YouTube channel] was still growing, I knew it wasn’t going to last forever. I had to plan for the future. I knew that eventually, I’d reach a ceiling.
Allure: It almost sounds like you invented beauty blogging and then went on to invent the beauty subscription box?
Phan: Well, Birchbox existed before Ipsy, but I didn’t even know about it. My idea for Ipsy was inspired by shopping in Asia. In 2008, I was in Thailand, and I saw people were interested in buying expensive skin-care samples. In the U.S., you can use half the bottle and take it back to the counter and say, “I didn’t like this,” but in Asia, it’s final sale. It was fascinating. And I thought, one day I’ll do a business where people could buy samples, maybe in a mystery box, or you pay a subscription and it’s a surprise. I didn’t know about Birchbox then, but sometimes you don’t have to be the first. You just have to be the first to do it right. Or there’s this French saying: “It’s better to be first to be second.” The first person does all the research and development, and then you learn from that and do it better.
So, no, I wasn’t the first subscription beauty box, but I was the first to take my influence and turn it into a sustainable business model. Because being an influencer is not sustainable at all. People care about what you say, what you create. But eventually, like I said, you reach a ceiling where you lose relevance, and if you want to gain relevance again, you have to reinvent yourself, and do it very well. Unfortunately reinventing yourself means you have to be louder or you have to be more shocking. You can see this with YouTube.
Allure: There are more beauty products in the world than ever before. Are we at critical mass?
Phan: I thought we reached critical mass two years ago. It’s just growing and growing. I wonder if it’s more cyclical. Maybe we will see a crash, but the pendulum will swing the other way. Maybe some brands will say, “You know what, we’re editing down our offerings from 500 SKUs to 100 SKUs.” I could see brands wanting to be more sustainable: “We want to be more intentional with our product offering and not just chasing these moving targets called trends.” So I could see that happening too because it makes sense financially for the business. I could see a pullback and then the cycle will begin again.