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Influencers Transcript: Huda and Mona Kattan, November 7, 2019

ANDY SERWER: Social media can catapult a blogger to superstardom, but it takes way more than clever tweets. Sisters, Huda and Mona Kattan know this well. Huda is one of the most famous people in the world of beauty and fashion, appearing on "Time Magazine's" list of the most influential people on the internet. Her nearly 40 million Instagram followers, who go to Kattan for tips on the latest beauty trends and products, have helped her build a network of $610 million.

Mona Kattan, Huda's sibling and business partner used finance and PR savvy to turn hottest talent into a massive moneymaker. They already have a line of beauty products. Now they're set to launch Huda Beauty investments which will mentor and fund entrepreneurs in the space. Plus, Huda will continue to star in a reality show. For Facebook Watch. Huda and Mona are here to talk about how to build celebrity from the ground up and how to make money on it if you do.

I'm with Huda and Mona Kattan, who are the owners and founders of Huda Beauty. So great to see you guys. Thank you for coming on.

MONA KATTAN: Thank you for having us.

HUDA KATTAN: Good to be here.

MONA KATTAN: So honored. We love Yahoo Finance.

ANDY SERWER: Love that.

HUDA KATTAN: She's on every morning.

ANDY SERWER: Oh, really?

MONA KATTAN: I am, yes.

ANDY SERWER: That's fantastic. So let me ask you-- I mean, first of all, maybe one of the most famous thing about you guys is the number of Instagram followers. So Huda, I want to ask you about that. I mean, first of all, what is it like to have what, nearly 40 million Insta followers?

HUDA KATTAN: It's-- it's incredible. It's amazing, because you do have the ability to impact, and to influence, and get people to buy products. But it's also a lot of responsibility as well. So I think there is a little bit of pressure with that. But I do feel like I am supposed to be doing this. So I enjoy it.

ANDY SERWER: And so Mona, talk about your roles-- and you have another sister in the business as well? Three sisters, wow, does that work out? I mean--

HUDA KATTAN: Sometimes. We have our days.

MONA KATTAN: And you, know my role has continuously evolved in the company. And I think all of ours has. But from day one, it was Huda, our sister, Alya, and myself working with the business, Huda as the founder, and we helped co-found the business. But I think you know, any startup, it's like you just have to wear whatever hat is necessary. So it's really evolved over time.

Now, I think I'm just really honing in on one of our sub brands, which is called Kayali. It's our fragrance launch brand, which is really exciting. And Huda is helping me really become a founder of the brand, because before, I was just involved in really, the boring things like finance and legal.

ANDY SERWER: Oh that stuff. That's not boring to our audience.

MONA KATTAN: I do love it. I love it. You know, I studied-- we both studied finance. But I think I'm having more fun now just learning from Huda.

ANDY SERWER: And did you urge her to start her beauty blog 10 years ago almost-- 10 years ago in April, right?

MONA KATTAN: Yeah.

HUDA KATTAN: Yes, April 19.

MONA KATTAN: Yeah. I mean, I was actually in PR consulting at the time. So I had always been telling people, you need to start a blog to help build your profile. But Huda was actually like, sharing information all the time anyway. She actually had a blog, but not really. So just like, make it formal. Because she used to send emails send outs to all her close friends and tell them what products to buy just for fun. Like, for no reason at all.

HUDA KATTAN: People wanted the list.

MONA KATTAN: All my friends were like, put me on Huda's email list. So she was blogging without even knowing it, but she formally started it when she started makeup.

HUDA KATTAN: She forced me.

ANDY SERWER: It worked out.

HUDA KATTAN: It worked out. I'm so glad I listened to her. She doesn't listen to me.

ANDY SERWER: She doesn't.

MONA KATTAN: Let's not go there right now.

ANDY SERWER: That sounds like a pretty good partnership. It works out.

MONA KATTAN: I'm starting to, we're sisters.

ANDY SERWER: So a lot of people try to do what you do, want to do what you do. How come yours just clicked like this?

HUDA KATTAN: I think a lot of people from the outside looking in assume it's easy. They think that I'm just in this office, and I'm just creating content, and I'm making product, and I'm just having the time in my life. They don't realize how much goes into running a company. Whether that is managing cash flows, which I think is one of the biggest problems when people are starting businesses, especially you know being a young founder. I think that's one of the things that really stop you from moving forward.

And I think that a lot of times to, they don't have the vision. They're not like, long-- you know, they're very short sighted. I think they're not long term focused. And I think that was one of the things that we've always been, is very long term greedy, you know? So I don't want to be you thinking about the business in the next five to 10 years. It's like, OK, when we die, what's going to exist?

You know, I really look up to Estee Lauder as a company. I think they're amazing. I love what they've done. I think Estee Lauder herself was amazing. I'd love to be the next Estee Lauder, that's our goal.

ANDY SERWER: So this background in finance probably helped you guys a lot, right?

MONA KATTAN: Definitely. And I didn't want to study finance, neither one of us did. But our father was really into just securing our future. So I think that's why we both studied it. And I worked in banking for a little while. And I think that's why--

HUDA KATTAN: She loves finance. She's lying.

MONA KATTAN: I love finance. I'm not going to lie. I do. Like, I do. OK, I'm a nerd. Sorry.

ANDY SERWER: Well, so then you guys are-- you know, it's a beauty blog essentially super powered by finance brains.

HUDA KATTAN: I mean, thank you. But I think-- I think I'm more of a marketing person. Mona really is incredibly [INAUDIBLE]--

ANDY SERWER: But you guys are business people a little bit, too.

HUDA KATTAN: Do you know what's so funny is I never thought that we were. I never really thought I was a businesswoman. You know, when Mona told me to start the blog, and you know, she forced me to start Lashes as well, I was like, this isn't for me. And I would do interviews, and people were like, maybe you're going to be the next Bobby Brown. I was like, what? I was like, do you hear yourself? Do you hear how crazy that is?

But ultimately, I feel like you don't really know what you're capable of until you get pushed into a corner, and then you can blossom. Or ultimately, not. You can crack. So I think we were put in positions. We were fortunate enough to have each other and a really wonderful team around us to create you something that is incredible.

ANDY SERWER: And you mentioned your dad pushing you into finance. And your parents immigrated from Iraq to the United States, correct?

HUDA KATTAN: That's right. Yeah.

ANDY SERWER: Talk about growing up in America that way.

HUDA KATTAN: I mean, it was rough, to be honest. You know, we definitely-- you know, when we my dad immigrated into the States, he came in on a scholarship, but he had four children. You know, so we definitely I think, faced a lot of issues, you know? And there's obviously you know, the simple issues like you know, being on welfare. And I remember having a lot of memories of that, struggling with a lot of basic things.

Now it's like you know you look back, and you're like, it's really incredible that everybody does have an opportunity if they work hard enough, if they have the right perception. Because that was a big thing, too. Not thinking you're capable, not thinking that you are worthy of a certain life is like, the most fundamental thing that people need to change. And I felt like when we changed that, that's when, ultimately, our business changed. But it did take a long time to get there.

MONA KATTAN: Yeah, I have to agree. And I think that our parents have been so supportive, especially our father, who's been our rock. But for the longest time, he didn't believe we could achieve something out of business. He was like, I don't know what you guys are doing this, go find a job, go find a real job. Because you know, he came from a struggling family too, so he always believed in securing your future through education, which is why he has like, five degrees.

But for him, I think he didn't really believe in us til like, year four of the company. He was always like, what are you guys doing? I don't understand what you do all day, but I'm going to support.

HUDA KATTAN: I would tell him like, dad, we're going to make this pallet, and we're going to sell like-- we're going to sell like 3,000 pallets. And he was like, let's see. His answer to me was always like, in Arabic, is like, [ARABIC], which means like, let's see, let's see. Like, you think something's possible, but it's not.

And it's so funny because you know he's around-- he's in his mid to late 70s now, and he really is changing now as a person. His perception now is changing. You know, he says to us all the time, you know, you've taught me a lot about leadership, you've taught me a lot about perception. And it's incredible because it's a beautiful thing when you see that happen.

MONA KATTAN: Absolutely. I think mindset is probably 90% of your success. You have to have the right mindset.

ANDY SERWER: But how did you sell those first 3,000 pallets--

HUDA KATTAN: We sold more.

ANDY SERWER: Those are little makeup pieces?

HUDA KATTAN: Yeah. They're about this big.

ANDY SERWER: Right. So how did that happen? I mean, you just put them up on the internet and people bought them?

HUDA KATTAN: We really were fortunate enough to be in the wave of social media. So we used-- we did use Facebook originally to push our blog. We didn't have a lot of money, so were using like, $10 ads on Facebook, which was amazing. That really helped us cultivate a following on the blog. And when Instagram came around, it was the perfect timing. So we were really pushing on Instagram, studying like crazy.

HUDA KATTAN: I think one thing we were very serious about making it and becoming successful on social media, so we were studying everything. You know, we know now data is so powerful, and you can learn so much about yourself and creating product with data. So we were really like studying what people were liking, what they weren't liking. Small little things about you know, would this photo get more likes. And so we were able literally to create product and packaging based on all those things.

ANDY SERWER: And so you guys were based in Dubai now. Why is that?

MONA KATTAN: Well, I've been in Dubai since 2002. Initially, my dad moved us out there just to try something new. He was like, I got this job opportunity to set up a program. And he just wanted us to go for a year. And honestly, it just sucked us in. There's like a thing in Dubai, where you go for a year and you stay for a lifetime. So we're like one of those people. I've been there for 17 years now.

And I think it's just a land of opportunity and entrepreneurship. The leaders there are very visionary. I mean, the ruler of Dubai, he's an entrepreneur himself. He believes in startups. He brings this culture out in Dubai of like, really encouraging businesses, even if it's-- even if you fail, you know? It's this land of no regrets, and just enthusiasm, I think.

ANDY SERWER: And are your products and sales mostly in the Middle East or the United States or both? Or how does it work globally.

HUDA KATTAN: So we're actually a very global business, which is amazing. Because a lot of beauty brands, they will really-- they'll really infiltrate the states, but going out of the states, they struggle. And we've been very fortunate to be able to launch against really big beauty brands without spending dollar on marketing and obliterate them, to say it nicely. So yeah-- but it's honestly just because of social and I do think it does go back to those like, small advertising dollars that we use in different places. I know it sounds a little weird, but we grew followings in those different locations.

So whether we were advertising in some places like didn't necessarily make sense, but I was like, I feel like in Nigeria they love makeup. I feel like, in New York, you know, that's where the all the press lives. And I feel like in LA, it's all Hollywood. So we chose like different countries. In India they love makeup. In Saudi, they have like-- you know, they love social media. So we picked out different countries. And so when we launched-- also, France, because we had a big Arab community. So when we launch in these places, people were like, scratching their heads. Even the retailers at the time were like, oh, you're not going to really succeed here. And then we did.

MONA KATTAN: And if I could just add to that, I think that one amazing thing about advertising on Facebook was that you're advertising to a community and you retain that community versus you know, other places where you geotarget the demographic. Like Google, for instance, you don't retain that community afterwards. So it's really interesting to see something like Facebook, where you build a community for life.

ANDY SERWER: You guys know your social.

MONA KATTAN: Oh yeah.

ANDY SERWER: Sounds like it. You've been doing it for 10 years now. But you were saying, Huda, that you actually like being a little bit out of the fray in Dubai, right?

HUDA KATTAN: I love it. Yeah. You know, I think a lot of people assume because all the influencer is-- majority of them, especially like, the bigger ones, are in LA. And you know, social is in LA The beauty brands are all moving to LA. I think everybody was under the assumption that we were going to move there. I mean, sometimes, you know, we definitely wondered if we should. But I love being away from everyone. There's no noise. You know, I'm in perfect focus. I can see everything really, really clearly.

ANDY SERWER: So how does the business work? Right, you're on social, you're selling makeup, you're doing promoted posts. How does it all come together?

HUDA KATTAN: We're not doing promoted posts too much right now. Our shop Instagram account does. But other than that, we don't really do too many promoted posts anywhere else. But you know, the business is interesting because I think in many ways, we are backwards. Most businesses from what I've understood from just you know interviewing people, they'll be like, OK, we want to make this much money, how do we do it? And then they'll kind of work backwards.

Where I'm like, I feel like I'm craving this product, and you know, it will kind of start from there. And sometimes, that product won't necessarily make that much money. But I'm like-- but I know it's going to create a movement. People will grab onto the trend. It's a very long term focus. And you know, luckily, I've been right enough times where we've took chances that the team trusts me now.

ANDY SERWER: And you source from all over the world and sell all over the world at this point, right?

MONA KATTAN: We do. Our manufacturers are all over the world. Primarily Europe, Italy. We look for the best. We do not negotiate on quality It's quality and customers first.

ANDY SERWER: And what does the future hold for you guys? I mean, you do-- you're doing Facebook Watch again. And you've got Huda Investments, right? How does that all work?

HUDA KATTAN: That's right.

ANDY SERWER: I've been reading up.

HUDA KATTAN: Oh my god. I am so impressed. I am so impressed. So we do have a company, a subsidiary-- well, actually, it's a sister company called Huda Beauty Investments. And we do have our own team there, our own CEO there, and we are doing investments in various projects. Some of them have been technology focused. Some of them have been you know, different types of marketplaces.

And then you know, we just recently of course, started our Huda Beauty Angels, which is there's stuff going on there. But we'll have to save that for another conversation.

ANDY SERWER: And finally, last question, do you have other investors and are you looking to maybe do an IPO at some point? What does the financial future, the business future hold?

MONA KATTAN: We have one investor, TSG Consumer Group, which they're just phenomenal partners. Honestly, they've been so strategic. And really, they're long term greedy as well. Like, they're not about one year or two years. So thinking about the vision with us and they've been great partners. But I don't think we're looking to raise any more capital anytime soon. And I think long term, we'll probably go the IPO route most likely.

ANDY SERWER: All right. That's exciting. Mona Kattan, Huda Kattan, thank you so much for coming on Yahoo Finance.

MONA KATTAN: Thank you so much. Thank you for having us

ANDY SERWER: Welcome back from our conversation with Huda and Mona Kattan. I'm joined now by Kennedy Johnson and Kerry Justich, both from Yahoo Lifestyle and Entertainment. Great to see you guys.

KENNEDY JOHNSON: Hi.

KERRY JUSTICH: Thank you.

ANDY SERWER: Now you both have covered Huda Kattan and know a lot about her, which is more than I can say. Now I've learned a lot about her, but you guys have known about her for quite some time. Kennedy, let me start with you and ask you what do you think her greatest impact is?

KENNEDY JOHNSON: On me personally?

ANDY SERWER: Yeah.

KENNEDY JOHNSON: I'd say the coin, the money. Just watching a woman make so much money in the industry of beauty really encourages me to keep myself in the business of YouTube, because sometimes, it can get a bit overwhelming. But she created a product. And with the product, it became really popular online, and that is a good thing for me. I want to do something in that industry as well, maybe not with beauty products, but just with creating something for my audience. That is great to watch from her. So that's awesome.

ANDY SERWER: And Kerry, when did you first learn about Huda Kattan.

KERRY JUSTICH: Probably the way that I would say most of her followers did. I was very much into YouTube growing up, and that's where I learned a lot about makeup, and the beauty business in general. And then Instagram, I think I started following new people on there. So that's probably where I found her in particular. I think when I was younger, a lot of the makeup videos that I watched on YouTube were a little less about the art of it. It was a little more innocent and playful.

And as you see with Huda, like Kennedy just said, it's a full blown business. I look at her as an insanely talented artist. So I think that's more of what I was looking for as I got older and continued to look for new people on the platforms.

ANDY SERWER: Is she really different from other makeup artists like that? Are there a lot of other ones like her?

KENNEDY JOHNSON: Absolutely. Yeah, absolutely, to be honest, yes. But I think the draw with Huda is she has products that do really, really well.

KERRY JUSTICH: Yeah.

KENNEDY JOHNSON: So she's created something that people actually want to buy and use. And they want to show people that they have it, it's a popular product. And it's something about putting a little palette up to your face with the eyes-- she has a palette with the eyes on it.

KERRY JUSTICH: Palette.

KENNEDY JOHNSON: Palette. And it's a really popular thing. And when you make a video like that, it could go viral itself. So you kind of like, associate yourself to the brands and the popularity when you use her stuff.

KERRY JUSTICH: I was going to say, I also think she's kind of a mix between aspirational and attainable, and that's just the way that she uses her platform. So obviously, she is coming out with these incredible products. She lives an incredible life that not all of us obviously live. But at the same time, she's connected with her audience to the point where you learn about her backstory, you learn about how she's gotten to where she is. And then she also takes the products that she's making and teaches you exactly how to use them. So in some way, you're like, OK, I can kind of do this, you know?

ANDY SERWER: Right. I mean, but it's not so easy just to put pictures up on Instagram. There's a lot more to it than that.

KENNEDY JOHNSON: Yeah, of course.

ANDY SERWER: So is she kind of like a Kardashian do you think? I mean, sometimes people say that she's like a Kardashian, that' she's like Kim, I think, right?

KENNEDY JOHNSON: Sure. In ways of like, being extremely popular. I mean, maybe even looks, too. I've seen her a couple times and have been like, Kim, is that you? It's not her, it's Huda. Yeah, I mean, when you're on Instagram, and you are popular, you can easily be a part of that Kardashian mix. Because at the end of the day, the Kardashians are extremely popular, and they use social media in the same way that I think Huda does, which is just a way for her audience to see her more. Doesn't she have a Facebook Live show or a Facebook Watch?

KERRY JUSTICH: Yeah, so I was going to say I think like, her Facebook Watch shows do that. They kind of are the Kardashians of the beauty business, just because it is a family business. And obviously, you had her and Mona on, so that just shows their dynamic. But people from the show know her dad, and her husband, and her daughter. And they're all on Instagram. And so it's kind of the same thing, where she, I would say, is the Kim. And then she starts-- the other people start gaining interest just from kind of being in her universe.

ANDY SERWER: I mean, is she like the next Estee Lauder, do you think?

KERRY JUSTICH: I thought it was really interesting that she said that. I never-- I mean, Estee Lauder, obviously, is such an iconic brand. And we haven't-- we haven't seen anything come up in our time that's similar to that. So that's why I just like would never pair the two. But I thought it was really interesting. And just her whole thing about talking about being long term greedy. I loved that, because I think for influencers nowadays, we think their platform is so fleeting.

Like, if you delete Instagram, what are these people going to do? But she really has built a brand and a reputation. And people outside of social media I think, will still know who she is. Like, I don't think 40 million followers just disappears like that. I think they would still buy her products. And it can go on for a long time.

ANDY SERWER: And then there's the flip side, which I want to drill down to a little bit more, which is building to that 40 million. I mean-- and I just want to try to figure that out. I mean, is this something, Kennedy, you think anybody can do? Or does it take luck, and talent, and skill? I mean, how did you get there? How do they get there, do you think?

KENNEDY JOHNSON: Yeah, I don't think anybody can do it, or we'd all have millions of followers.

ANDY SERWER: Right. So what does it take?

KENNEDY JOHNSON: I do think it's a mix of having a talent or having something that people are drawn to and that they want to subscribe to. She has, like I have mentioned multiple times, a product that people really like using. And it is a great-- she has great products. I use her concealer. You had a bag full of stuff from her.

KERRY JUSTICH: I have like, a full face of Huda right now.

ANDY SERWER: But couldn't you just get some makeup and do it yourself?

KENNEDY JOHNSON: What do you mean?

ANDY SERWER: I mean, she kind of got the makeup from someone, I guess, and mixed them up in pots. See, I'm not a makeup person, you can tell.

KERRY JUSTICH: She's mixing it up in pots!

ANDY SERWER: Someone [INAUDIBLE] for her, right?

KENNEDY JOHNSON: It's the whole package. Huda and her sister have created a whole system. It's product. It's being accessible online and people being able to get to know them in that way and with the show. And people really like, relating to them in their own way. And then also, them being women of color, and specifically, that she's Arab. I think that she has an audience that looks to her as an opportunity to like, be more free, I think, when you are living in a country where as a woman, you're typically silenced. Seeing a woman who is using her platform to express herself through beauty I think, is really attractive to a lot of people. So I think a lot of her followers are drawn to that because it's like, wow, I want that, too.

ANDY SERWER: Right. So she's a paradigm that way, right?

KERRY JUSTICH: Yeah. It also doesn't come without saying that her beauty account is a collection of-- we were talking about this before-- videos and posts from people other than herself as well. So it's kind of like the weird success that meme accounts have had. And for her, she's giving all these other artists a platform. Those people that she's posting don't have 40 million followers. But when I want to go and check that out, and I don't just see her face, I'm seeing faces from people all over the world, I think it's a really cool collection.

ANDY SERWER: All right. Now I've discovered Huda Kattan- you guys have known about her for a long time-- but who are the next Huda Kattans out there. What do you think, Kennedy?

KENNEDY JOHNSON: Oh wow. I mean, I don't know who the next Huda Kattan is. There are a lot of amazing beauty gurus out here who are doing their thing. Specifically Jackie Aina, who is fantastic. And she doesn't have her own product. She has product collaboration that she's done. But she's definitely in that lane of being one of the biggest beauty gurus of our time.

KERRY JUSTICH: I would say-- I would say I don't know if she'll achieve it, but Tati Westbrook, she's another very popular beauty influencer. And she just came out with her first product, and a new palette, and she talks about expanding. So I think her mindset is to get there. I don't know if she well.

And I think, really, in the beauty space, the only thing that's comparable, just the dynamic of social media and everything, too, is Kylie Cosmetics. Even though it's very different, and there was an advantage there just from her being a Jenner. But I think the two Kennedy compared.

KENNEDY JOHNSON: Absolutely.

ANDY SERWER: I mean, it's sort of a whole new category though, right? So it's a makeup, artist beautician, cosmetics person, and celebrity in the same package, right?

KENNEDY JOHNSON: Yeah, for sure.

KERRY JUSTICH: Huda is a celebrity.

ANDY SERWER: Right.

KENNEDY JOHNSON: Absolutely. And the thing is that Instagram can make you a celebrity, and that's absolutely what happened with her. She's got Instagram, she's got the blog, she's got YouTube-- does she have YouTube?

KERRY JUSTICH: Yeah.

KENNEDY JOHNSON: She has YouTube. She's touching all the major markets. And you have to if you really want to have a following of that size.

KERRY JUSTICH: Yeah, for sure.

KENNEDY JOHNSON: Yeah.

ANDY SERWER: All right, Kennedy and Kerry, thank you so much for your insight. That was great.

KENNEDY JOHNSON: Thank you.

ANDY SERWER: All right, you've been watching Influencers. I'm Andy Serwer. We'll see you next time.