At Beautylish, Three Men and a Beauty Editor Build a Community Around Cosmetics

3/7/11Follow @xconomy

When Beautylish co-founders Vu Nguyen, Sameer Iyengar and Nils Johnson started raising money for their beauty-focused social network last July, they turned to angel investors who could give them more than just dollars (though they got about 1 million of them); they sought out founders of companies like YouTube and Yelp to get advice about building an authentic online community.

For CEO Nguyen, that’s what the start-up has been about from the beginning. After co-founding crunchyroll.com, an online Japanese anime and Asian entertainment video service and community, Nguyen knew that he wanted to build something similar around another topic. The inspiration for Beautylish, a site that combines make-up reviews, video tutorials and networking, came to Nguyen as was he was dating a woman who actively blogged and watched online videos about make-up. He realized that “there’s a lot of community in the beauty space online, but none of it is really consolidated,” Nguyen says.

Beautylish solves the problem by combining all of the places a person might look for make-up advice—magazine reviews or ads, tips from friends, videos on the Internet—into one site. Nguyen describes it as “a virtual make-up counter.”

He took the idea to his friend Iyengar, then a partner technology manager at Google, and Johnson, an angel investor and founder of a telecommunications company called Gorilla Mobile, and the three started the site together. A beta version launched October 2010, and the site already has a strong community of “beauties.”

It may seem odd—three men who don’t use make-up launching a cosmetics-based social network. But Nguyen believes the founders’ outsider status made it possible for them to rethink the way things work in the beauty world. “Sometimes an industry requires outsiders to come and disrupt it, because they are not as familiar with the industry and how it operates,” he says. Plus, with Ning Chao, former senior beauty editor at Marie Claire, as beauty director, the company has plenty of insider knowledge, and so far, seven of the company’s 11 employees are women.

To build Beautylish, the founders used Facebook Connect, an open platform that allows users to link their Facebook profiles to outside sites. That way, Nguyen says, Beautylish users who check out product reviews can see the profiles, pictures and names of the people who wrote them. That helps users track down advice from reviewers with the same skin type or tone, or sense of style. For the founders, the decision was about “creating content and community in a way that is authentic and genuine,” Nguyen says. And setting that kind of tone takes time. Rushing in content or trying to force a sense of community can really taint a new network. “With social media, if anything isn’t right, people hear about it quicker than the ever did before,” he says.

The reviewers aren’t paid; instead the site relies on “community-driven passion.” The site is also getting some contributors who are using Beautylish’s audience to help build their personal brands and get a foothold in the industry. “That’s a bit more challenging to do on YouTube,” which doesn’t market to a targeted audience, Nguyen says.

Though there are other make-up sites out there, few combine all of the elements that Beautylish brings together in one space, according to Nguyen. For that reason, it’s hard to name direct competitors, he says, but the closest would be the networking site Makeupalley.com, or the cosmetics retailer Sephora, which is beginning to ask customers for product reviews. But Nguyen doesn’t believe these sites have all of the necessary elements of social commerce. “We think we may be doing just the right blend,” he says.

The company is still pre-revenue, and it isn’t “fixated on” developing its business model yet, according to Nguyen. But the founders are thinking about how they can implement the “obvious advertising model,” and if there might be a way to bring in revenue by helping users find the products they want.

The list of angel investors who contributed to the $1 million the company raised back in July includes some pretty big Silicon Valley names, including “super angel” Ron Conway, PayPal co-founder Max Levchin, YouTube co-founder Steve Chen, and Yelp co-founder Jeremy Stoppelman. “When we were out fundraising, we basically looked for investors who had a domain expertise, who could provide a lot of value in areas critical and important areas,” Nguyen says.

Since starting the site, the three co-founders have also learned a lot about make-up. “After you read about it so much, you kind of just want to try it to see,” Nguyen says. “We haven’t perfected our technique yet, but I know Nils has tried out a number of products.” And so far he’s learned one thing that he actually uses every day. “You have to pat, not rub,” he says.

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