Birchbox, headquartered in New York, has grown primarily through the traditional Ivey league formula: smart founders from a top school (Harvard), a good idea, and a bunch of venture capital. The company’s recent moves into traditional television advertising, and retail brick and mortar, provide positive optics the media loves to write about.
IPSY, on the other hand, has flown a little under the Birchbox radar; despite near tripling its subscriber count. And, they've done so on the back of founder Michelle Phan’s social influence. Phan parlayed an early passion for cosmetics into one of the biggest things on YouTube, and ultimately, into one of the most successful stories in the subscription space.
Subscribers to Ipsy, which the company calls “Ipsters”, are charged about $10 per month for glamour bags (not boxes) full of sample-sized beauty products. There are over 100,000 new subscribers joining Ipsy every month, alongside an estimated 2.5 million base.
While Phan never went to Harvard, she did learn something about the value of scarcity. Phan's YouTube videos have been viewed more than 1 Billion times collectively. She’s been on the Forbes 30 Under 30 list, and is often described as one of the most watched talents in the digital space. Her starpower on YouTube is unique, rare, and scarce. In other words, Michelle is what VC types might call, a unicorn.
How to clone a unicorn:
How do you clone a unicorn? In 2015, the company came up with a unique way to ‘scale’ Michelle.
Seeing the opportunity across the sum of the parts, Ipsy launched the Open Studios initiative: a community play to help budding content creators access resources they’d need to become the next Michelle Plan. Ipsy OS provides studio space with production, lighting, and editing technologies, mobile tools and apps, and experienced mentors to aspiring Ipsters seeking to channel their “inner Phan” - without any commitments, fees, or exclusivities. Creators retain 100% control of their channels, CMS, and revenue.
What’s in it for Ipsy?
By helping launch the next generation of beauty gurus, Phan’s profile becomes even more prominent. Moreover, as Ipsy latches on to the next generation of ‘Phans’, the company scales much faster, riding a rising tide of next-gen beauty influencers – oh, and Ipsy also benefits from ads that feature these up and coming celebrities and the tutorials they do; that include of course, products Ipsy sends out.
With plenty of ambitious Kardashian types itching for an opportunity, Ipsy Open Studios received more than 1,000 applications within hours of launch. While communicating an “everyone is welcome” narrative on the website when Ipsy announced the program, the company was “playing Harvard” .... anyone could apply, but admission comes to very few - the very rare.