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Forbes article: How 20-Year-Old Kylie Jenner Built A $900 Million Fortune In Less Than 3 Years

MJ DeMarco

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From LuckBox, one of my favorite mags about probability and luck as it relates to business/financial options ... two different opinions.

https://luckboxmagazine.com/issue/may-2019/

Viewpoint 1: Self-made? Uh, no.


Screenshot_2019-04-08 e01a0dbde0e1aacd7f17f0a020cd174ad93c8da1 3 pdf.png


Viewpoint #2: No one else in the family has monetized the fame (or privilege) to this degree.
Key point: Branding!Screenshot_2019-04-08 e01a0dbde0e1aacd7f17f0a020cd174ad93c8da1 3 pdf(1).png
 
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PizzaOnTheRoof

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I don’t see anyone cutting down Usain Bolt for having superior running genetics.

Is he “self made”?

Here’s the uncomfortable truth: Some people are born with advantages over you. Deal with it. Make the most of what you’ve got.
 

BigDaddyKane

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"Self Made" stories will forever hold more stock with me, because i can relate.
There's something magical about starting from nothing and making something.

I know people that would consider this romanticizing. But I know for me, I agree. There’s something behind an underdog that captures me. Someone who can make do with what little he starts with through creativity. There's a certain drive behind it that fuels the whole thing.

What you identify as "privilege" is in fact often an albatross around the neck of those who grow up in the shadow of their wealthy family. The lack of a struggle for resources often leads to the degradation of one's character, and this shows itself in the lack of work ethic, ambition, and persistence. Precisely the qualities one needs to succeed, even with a head start.

Wow, couldn't have said it any better. Im sure many here have seen examples of this in life. As a kid, I was always so fascinated when I would go over to a "wealthy" classmate or friends house. Turns out what I thought was wealthy was really just middle class ha. But that's exactly the point. Any hardship dealt on one end and privilege dealt on the other is filtered through perspective. She dealt with her cards intelligently.

You can try to duplicate anomalies in your own business but let's be honest. The marketing is done on social media because she has millions of engaged followers and gets who knows how many earned impressions with every post by tabloid websites. Followed up with more earned media by people posting about it everywhere. A few years ago a girl came over and brought her lip kit to show me like I gave a damn. Create a cult following is what we can pick up from her.

What we know as celebrity is created at some point in time. Someone down the lineage started the snowball effect that is celebrity, exposure, virality, whatever you want to call it. In that world, your daily human interactions are with other people with exposure. Sometimes, those interactions will be with a person who doesn't necessarily have "celebrity" themselves but has access to distribution. So it's a network of cross-promoting, sometimes intentionally, sometimes just due to the nature of her environment.

The question becomes, how will you USE the exposure you have built or been dealt? Is it something WORTH pursuing to grow? It's a tool and she leveraged it. You can do the same. This world is a social world and you can get yourself anywhere this way.
 

Sanj Modha

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There's no such thing as 'self-made'. We all know Ray J's penis built that empire...
 
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Xeon

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fc8634c57186046df5e2d2a8e8d2e961.png


19,900% increase in 4 years. Nuff said.
 

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19,900% increase in 4 years. Nuff said.

the power of strong celebrity status.
Can say the same about a prince being crowned king.

When Charles was 16 he was a prince with 100 loyal servants and a fiefdom his father gave him to gain some governing experience.
2 years later, Charles was crowned king and inherited 40 million loyal subjects of the land, and nearly 120 fiefdoms and 25 castles all around.
That a nearly 24,000% increase!

I ain't saying the prince was an a**hole, im sure he worked really hard to become groomed to be a king, but u can't deny he's been dealt a good fukin hand in life.
 
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MJ DeMarco

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19,900% increase in 4 years. Nuff said.

FN incredible. A staggering 19,900%!!!!

What mutual fund did she invest in to get those returns?
What stock did she buy?
What kind of 401(k) match did she have?

Oh wait, she killed it as an entrepreneur. Not giving her pennies to Wall Street as some highly regarded gurus would have you do.
 

G-Man

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Are we still debating this? How many rich kids and child stars are there that were in the lucky DNA club that ended up in rehab or otherwise impoverished? Also, thanks @MJ DeMarco Luckbox looks pretty cool. Got the free sub.
 

luniac

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itd be cool to see a case study of the 4 years of kylie jenner's business decisions and actions that led to such growth.
 
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rpeck90

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19,900% increase in 4 years. Nuff said.

Only if you take the $1bn valuation as legit.

This site says $300m more appropriate. I still believe her "business" isn't worth more than $50m.

You may say "who cares" -- well, considering Forbes valued it at an 8x multiple, you'll begin to see how important it is. Forbes vastly over-inflated the valuation to get a story. If she gave you the keys to "brand Kylie", how much would you be willing to part with? Is she worth ~1/3 that of Donald Trump?

Without factoring in cash she's already made duping millennial girls online, what does she actually do that's worth $1bn? Invented the lightbulb? Brought standardized oil products to the masses? Put a computer on every desk and in every home? Invented a drill-bit that gets through granite?

This is more apt for an entrepreneurship forum:
Kylie used $250,000 of her modeling earnings to manufacture the first 15,000 lip kits. She spent months teasing the kits on Instagram and announced the launch on social media the day before they went on sale. The lip kits sold out in less than a minute. Kylie Lip Kits relaunched as Kylie Cosmetics in February 2016 with 500,000 lip kits in six shades stocked. By the end of that year, Kylie's company was selling 50 or so products with revenue of $307 million.

This is what should be focused on, none of the horseshit about being a billionaire. Anyone can be a billionaire when you have $trillions of fiat sloshing around at near negative interest rates. The above gives a perspective on what she actually did to create the wealth.

The question of "self made" (which - again - shouldn't even matter) is that she had a massive boost due to her family's connections. I still don't understand how her, Kendall , Gigi + Bella Hadid got "modelling" contracts. They really aren't attractive at all (Kendall MAYBE)... but modelling contracts they have. And when you're that level of "popular", if it wasn't "lip kits", it would have been something else.

My question is still "how did she get 120m Instagram followers?". I really don't see why people follow her. She's stumpy, fake and doesn't have any "look" that's not available from other professional models. A model/actress I found the other day (who grew up near me) does it better than Kylie.

As @Vigilante said some posts back - it is more a commentary on slowlane America than it is a "self made" success story.

--

As an appendix, found this on Twitter...


Take from that what you will.

The big problem I finally figured out in my head is that in order to continue massive economic growth, the West has shifted from a production to consumption based economic model. This means that what used to be considered valuable (steel that was uniform and thus could be used to create sturdy buildings) has been replaced with vacuous non-entities all vying for market-share... "who sells wins".

The whole "Kylie" episode is the epitome of it all to me. She's done well, no doubt. But so have millions of other people who've marketed products they either created, or had the audience to sell to. It's a dire lesson in the way the world works -- you may have a cure for cancer, but if you're not able to get it marketed, is it really that valuable?

Whilst Kylie shows us one end of the spectrum, perhaps it's a lesson to everyone. Maybe a product alone isn't the ticket to riches that everyone thinks it is. Maybe it's a combination of marketing prowess and product?

Perhaps the "marketing" of a product is the 20% 10% which yields 80% 90% of the results. We've seen it with Apple and (some may argue) Microsoft. Google's product was superior, but what makes them so special? Amazon likewise. We're living in a time where attention has been commodified, and it seems that Kris Kardashian has mastered turning that commodity into currency. If anyone is worthy of the "billionaire" epithet, I'd postulate that it's her.
 

Xeon

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Very interesting insights again from you, especially on the production vs consumption part, and 10%-marketing-90%-results point.
I always remembered this line from a software sales book I read almost 2 decades ago : "Marketing Gods Make Software Kings".

I guess Kylie is a good example of the kind of philosophy you used to talk about : selling the intangible. It was never about the product, but getting a piece of the Kylie lifestyle when you buy her lip kits.

I still don't understand how her, Kendall , Gigi + Bella Hadid got "modelling" contracts. They really aren't attractive at all (Kendall MAYBE).

Kendall is the least attractive of the sisters, IMHO.....

I really don't see why people follow her. She's stumpy, fake and doesn't have any "look" that's not available from other professional models. A model/actress I found the other day (who grew up near me) does it better than Kylie.

I *think* Kylie Jenner and/or Kim K is the one that pioneered and started the whole ultra-wide-hips + butt-implants + duck lips trend, and made it popular among millennial western women.
Since last year, I've been noticing even Polish/Ukranian/Russian women on IG with duck lips which they were not born with. There were some celebs like Angelina Jolie with duck lips but it never caught on until Kim K/Kylie got famous for that.

Some of the modern day Internet slang like "thiccc" are also often associated with them.

I don't remember seeing anyone with her kind of facial aesthetics until she came onto the scene.
It's what I always refer to as the "Kylie Jenner look" in my guy-talk convos lol
 
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ideasunlimited1

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Regardless of her numbers, Kylie entered the makeup industry and dominated largely because of the quality of her lip kits. At the time she started, the whole matte lip trend was unheard of. People don't think of that and assume she didn't do anything special aside from being born into fame, but that isn't technically true. She was pushing a new product..and many women I've talked to have said that her lip kits are the best there is: doesn't crack, smudge or look dusty after application. It was really hard to find a matte lipstick at the time that didn't crack. (I realize this sounds like mindless beauty talk, I'm just sharing the customer experience). The only company that came close to a profitable dupe is ColourPop, and that came around 6-7 months after her, and didn't really explode until a few years ago. She had a long time in the market to saturate that cash. Now, I can agree her selling out her kits can be attributed to her name, but there is more to brand loyalty than that: people love her look and product, so it certainly seems within the realm of possibility that she is a billionaire, the disagreement is whether any seed money should be a negative or positive.
 

rpeck90

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but getting a piece of the Kylie lifestyle

But that's my point... what is the Kylie lifestyle? Kim lifestyle I can understand. Kendall I can understand (professional model), but what's Kylie done that's so remarkable? Why are people following her on IG?

Kendall is the least attractive of the sisters, IMHO.....

I don't find Kendall attractive (my post above was within the context of being a professional model), but I can understand why she has several lucrative modelling contracts, including one with the much-coveted Victora's Secret. She has the figure for it. Kylie doesn't.

Having just looked over her IG again, maybe it's me. Maybe I just don't like her style and see through all the photoshopped bullshit. Maybe my years in marketing have desensitized me to the pull of "the perfect pout". Are giant lips-which-hardly-move because-they've-been-paralyzed-by-botox really that attractive?

Maybe I'm Piers Morgan in disguise:
'The thing about Kylie Jenner, she’s not even that good looking, is she? She’s not,’ he said. ‘I would have her number four on the list of Kardashians, and the two above her aren’t much better. ‘I’m not being rude, the only hot Kardashian is Kendall, none of them are that hot. If they weren’t Kardashians famous for the sex tape – that’s how they all became known – if they weren’t Kardashians, they would not get in to the average Croydon nightclub. The bar is set pretty low in Croydon, as we know.

‘I think Kendall is the only one who you could say is model quality. She could be a supermodel. Kylie is as dim as a rock of bricks. ‘What does this say about our society, that these talentless, vacuous twerps are billionaires? ‘The only good thing of this is Kim will be seething. She made the sex tape, she owned the sex tape, she had to perform… Poor Kim, she put the yards in for the tape. Ray J, why have his siblings not become billionaires? It’s so unfair.’

Not insinuating anything (just threw it in because Morgan mirrored my sentiments).

Everyone has their own opinion of attractive, and I would not want the thread to be derailed into a "who's hotter" contest. I was only highlighting that I didn't see how Kylie gained so much notoriety despite being - what could be argued - among the plainest of the sisters. Plus it provides a juxtaposition which is always important when looking at stuff like this. I'm intrigued as to how she amassed so many IG followers.

Here's the video of what was quoted if interested.

--

Polish/Ukranian/Russian women on IG

One of the few women I genuinely see as naturally attractive (and I don't have much exp with EE) is @vosidova. Don't know who she is or whatever, but she's the type of woman I see as having a natural "look" which I feel most duck-lips are trying to replicate. Angelina Jolie had it too, as you've said.

--

Regardless of her numbers, Kylie entered the makeup industry and dominated largely because of the quality of her lip kits. At the time she started, the whole matte lip trend was unheard of. People don't think of that and assume she didn't do anything special aside from being born into fame, but that isn't technically true. She was pushing a new product..and many women I've talked to have said that her lip kits are the best there is: doesn't crack, smudge or look dusty after application. It was really hard to find a matte lipstick at the time that didn't crack. (I realize this sounds like mindless beauty talk, I'm just sharing the customer experience). The only company that came close to a profitable dupe is ColourPop, and that came around 6-7 months after her, and didn't really explode until a few years ago. She had a long time in the market to saturate that cash. Now, I can agree her selling out her kits can be attributed to her name, but there is more to brand loyalty than that: people love her look and product, so it certainly seems within the realm of possibility that she is a billionaire, the disagreement is whether any seed money should be a negative or positive.

All of the videos I sat through affirmed this, though it must be stated that she basically palmed off the manufacturing of the product to a company called Spatz Laboratories. Spatz apparently used to work with high-brow companies like L'Oreal before they dropped it to work on Kylie's stuff. I'm not really partial to that, so I'll have to research further. As far as I can tell, they seem to have dipped into L'Oreal's intellectual property in order to create some of ColourPop's products, and got hit with a patent infringement lawsuit from L'Oreal as a result. If you're interested, I can research more into what went on.

In terms of ColourPop, they appear to be manufactured in the same place (seriously), and (crucially) was started by the same duo who helped found Kylie's brand -- "Seed Beauty". It also seems their father owns Spatz...
Sibling co-founders Laura and John Nelson started a parent company called Seed Beauty as an offshoot of their father's makeup company Spatz Laboratories, which produced makeup products for other brands. ColourPop Cosmetics is a brand owned by parent company Seed Beauty, which also owns (<- REALLY?) Kylie Cosmetics and KKW Beauty. The company started as an e-commerce business, then expanded to selling wholesale to retail stores as well. The brand's first retail partnership was with Sephora in 2017. In 2018, ColourPop also partnered with Ulta Beauty.

Seed Beauty, a two-year old company launched by Laura and her brother John, was built on the back of a 60-year-old family business. In 1989, the Nelson family purchased the established Spatz Laboratories from its founder. Laura and John forged out on their own, however, studying and working respectively in retail and product development, and finance and manufacturing, before coming full circle into the family business, she tells me...

THAT is fastlane.

You have a single company who basically bakes up these niche cosmetics brands off the back of rampant social media followings and give all the orders to their dad in his factory (who takes 50% for COGS). Genius...

--

Thanks for the rep! @Xeon
 

luniac

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well this thread got really entertaining! nice write up @rpeck90
 
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PizzaOnTheRoof

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From the article:
Data from ecommerce firm Rakuten, which tracks a select number of receipts, suggests there was a 62% decline in Kylie’s online sales between 2016 and 2018.

More likely: The business was never that big to begin with, and the Jenners have lied about it every year since 2016—including having their accountant draft tax returns with false numbers—to help juice Forbes’ estimates of Kylie’s earnings and net worth. While we can’t prove that those documents were fake (though it’s likely), it’s clear that Kylie’s camp has been lying.

So either the business collapsed in sales or they just committed fraud with fake tax returns...
 

Xeon

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Taking all this new information into account and factoring in the pandemic, Forbes has recalculated Kylie’s net worth and concluded that she is not a billionaire. A more realistic accounting of her personal fortune puts it at just under $900 million

Assuming her wealth is currently just under $900m, it won't be that long for her to reach $1 billion either way......
 

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