Decoding Founder-Investor Expectations: Insights from Susan Lyne of BBG Ventures

“The best founders are people who have a combination of lived and learned experience.”

Susan Lyne

In this episode of the On Work and Revolution podcast, host Debbie Goodman is joined by Susan Lyne in the guest chair. Susan has led an illustrious career path, climbing the career ladder at Disney, rising to President of ABC Entertainment, and now co-founding and managing BBG Ventures, an early-stage fund focusing on backing female and diverse founders.

One of her ultimate drivers is the motivation to support underrepresented entrepreneurs in the tech and EdTech industry, specifically female founders. We tackle quite a few important topics, including the need for diverse representation in venture capital and, of course, what’s unfolding in the Workplace Revolution right now. 

Three key points emerge in this conversation:

  1. Innovation in Workplace Solutions: innovative solutions for frontline and solopreneur workforces, leveraging AI and technology to address market gaps.
     
  2. Susan shares key advice for founders looking to raise capital and secure investor funding: “The best way to really get someone’s ear who is investing is to find someone who can connect to you.” It’s been said many times, but the importance of networking is never too redundant to underscore. On that note, you can check out our recent episode with Networking Expert Helen Nicholson here
     
  3. Pitching and interviewing for founders—mistakes to avoid: Being an investor means figuring out what makes a great founder. In a time of increasing attentiveness to really great storytelling, how can you move past the razzle-dazzle of a fire impression or a pitch and get to the core of what makes a truly remarkable founder? 

Give this conversation a listen, and don’t hesitate to Contact Us if you have any questions, comments, or feedback. 

About our guest, Susan Lyne:

Susan Lyne is co-founder and Managing Partner of BBG Ventures, an early-stage fund backing female and diverse founders uniquely qualified to build scalable solutions for consumers, workers and employers. Since 2014, BBGV’s 3 funds have invested in more than 75 companies, including Zola, KiwiCo, Spring Health, Blueland, Canela Media, Real, Starface, Anthill, and Perygee. Before founding BBG Ventures, Susan held leadership positions at media, technology, and e-commerce companies of all sizes and stages, from startups to public companies. She spent almost a decade at Disney, rising to President of ABC Entertainment. She was CEO of Martha Stewart Living Omnimedia; CEO and then Chair of Gilt.com; and CEO of AOL’s Brand Group. Notable credits include Forbes inaugural 50 OVER 50 (2021), Advertising Age’s Publishing Executive of the Year, the Matrix Award from NYWIC, and Fast Company’s Most Influential Women in Tech.

Open for Full Episode Transcript

[00:00:00] Debbie Goodman: Welcome to On Work and Revolution, where we talk about what’s shaking up in the world of work and ed tech. I’m your host, Debbie Goodman. I’m CEO of Jack Hammer Global, a global group of executive search and leadership coaching companies. I’m also an advisor to venture backed ed tech founders. And for those of you in ed tech and workplace learning who are hiring, we have launched a fractional leaders offering. I’ll put the link in the show notes.

My main mission with all of my work is to help companies and leaders to create amazing workplaces where people and ideas flourish. So today I am really thrilled to have as my guest on the pod, Susan Lyne. So, Susan has had the most extraordinary career. She’s currently co-founder and managing partner of BBG Ventures, which is an early-stage fund backing female and diverse founders.

Since 2014, BBG Ventures has had three funds, which have invested in more than 75 companies, brands like KiwiCo, Zola, Spring Health, Real, which I think is now Xero, Anthill, Starface, many more. But Susan did not start out as a venture investor. No, no, no. She spent almost a decade at Disney, rising to president at ABC entertainment. She was CEO of Martha Stewart Living Omni Media CEO, and then chair of Gilt. com CEO of AOL’s Brand Group. She’s been included in Forbes inaugural 50 over 50, Advertising Ages publishing executive of the year, Fast Company’s most influential women in tech. There are a couple more accolades, but this is all just like very inspiring to me and just so impressive.

So Thank you for being here Susan. Today we’re going to chat to Susan about her shift into the world of venture investing as well as BBG Ventures workforce and learning portfolio, which is of particular interest to me. Welcome Susan 

[00:02:04] Susan Lyne: Thank you so much for having me 

[00:02:07] Debbie Goodman: Okay. So I’m really curious. You had this incredible career spanning one big CEO role to the next. What motivated you to make the change into the investment world as a venture investor? 

[00:02:21] Susan Lyne: You know, I have to say that throughout my career, I never had a game plan. I never thought next I want to do X or I want to be the CEO of a public company or, or, or, or. But I’ve always been very conscious of how the world was changing and where that might take me next. And when I was at Gilt, I started meeting a lot of young women who were building companies. Gilt was a high growth e commerce company. It was changing the way people shopped. Because we were New York based at a moment when I think the New York tech world was sort of taking off, we became a magnet for a lot of these founders and almost to a person, they had the same story about raising capital. They would go into a room full of guys and I don’t have to tell you. Yeah. Venture capital is one of the most homogeneous ecosystems in the world. And so they would go in and they would talk about what they were building and they would get blank stares. So, the more I heard this, the more I thought, not only is this a problem, but there’s a huge opportunity here because you could invest in the best of these female founders who intuitively understood the end user of certainly many of these consumer products and services they were launching.

You would probably have a competitive advantage. So that’s what got me started. And I, I mulled it for a period of time. I found a great partner and in 2014, we launched what was really a proof of concept fund. It was a very small fund. It was a 10 million fund with a single LP. And that was Tim Armstrong at AOL, we did two 10 and then spun out to raise a real institutional fund.

That was in 2019. We’re now on fund four, our second institutional fund somewhat larger than our last one. And we’re investing actively at this point. 

[00:04:41] Debbie Goodman: Well, that is an amazing story. I just love the, you know, you started out by saying I didn’t really have a game plan. I’m in the world of executive search. I help people navigate careers and from one job to the next. And I do see that some people have the great fortune of, and I don’t necessarily know that it’s just fortune, I think it is anticipating where the world is moving. They have the trajectory that is not thought out strategically and planned specifically, but that they, gravitate towards a trajectory of being open to opportunity really.

And yes, you are so right about the size of the room in which women founders have found themselves for so long and unfortunately still. I mean, the data that we’re all seeing is that the size of the pool of funds that goes to women founders in particular, let’s not even talk about minorities, but it’s still tiny. But at least there are companies like yours that are specifically focused on this particular part of the market.

[00:05:52] Susan Lyne: And I will say too that the Ecosystem the venture capital ecosystem once it was very public, how homogeneous this small group was like many men out there, they got embarrassed by it. And I think there has been a real effort to change at least the idea of having a fund or a firm that is six men that is now really looked on as a problem as opposed to a good idea. 

[00:06:33] Debbie Goodman: Yeah. I’m in the habit of looking at the leadership table not just the cap table, the leadership table of firms. And there was a moment in time up until I’d say maybe the last two or three years where the only women that were part of the team makeup were operations, marketing, HR, office manager and it’s definitely changing incrementally. Not enough, but yeah, we just got to keep charging on, absolutely flying the flag. It will eventually change hopefully more in a more holistic way across the board. Okay. So I know a lot of people who think that it’s much easier to invest in others than it is to be a founder or operator themselves. What has been the most challenging part of your new job as, or your new role as an investor? Cause you’ve been an operator.

[00:07:26] Susan Lyne: Yeah. Yeah. You know, I think that there’s always the temptation to step in and be too much engaged. So I think you have to be very careful to advise as opposed to try to help operate And that’s definitely something of a challenge for someone who has been a lifelong operator. But I think it came at the right time in my life. And I, I actually get enormous satisfaction right now out of working with founders not trying to lead founders, but to literally help them maybe think a little bit differently about what they’re doing. 

[00:08:12] Debbie Goodman: Doesn’t it get tempting to, I mean, you’ve, you’ve made every mistake 10 times, you’ve seen how the game is going to play out.

You can see the end destination before it’s there. Doesn’t it get tempting to step in at times? 

[00:08:29] Susan Lyne: I will say that I have learned that that’s a mistake because if you don’t let people make their own mistakes and figure things out ultimately themselves, first of all, they’re not going to be good leaders of the teams they’ve put together. They’re not going to have the confidence in their own decision making skills and ultimately you’re on some level, infantilizing them. The, the job of a good VC is to be able to identify where the world is going and where there’s opportunity. Identify people who are potentially great founders, and I’m talking particularly at early stage, which is when we invest and then to be a sounding board and a connector for those founders as they begin building and scaling these companies. But what you can’t do is to do their jobs for them. 

[00:09:29] Debbie Goodman: Yeah. Just to go back on that little, is that being an entrepreneur myself and being surrounded by the entrepreneur ecosystem is many of them think that they want advice, but they actually don’t want advice. They kind of want to, usually they’re pretty hardheaded and want to do things their own way. So it can be a bit of a double edged sword there. One of my favourite phrases on your website is a great founder is greater than everything else. And I wanted to know what is, I mean, isn’t that the key to being an investor is to figure out what is a great founder, particularly at the early stage? What does that mean to you?

[00:10:09] Susan Lyne: I think that you learn over time that some of your instincts were probably good and some of your instincts were probably off base. So I’ll start by saying what we’ve come to realize is that the best founders for us are people who have a combination of lived and learned experience. So because of the areas we invest in and because we do look for founders who are really trying to have some impact as well as great returns people who have experienced whatever the pain point is that they’re trying to fix have an advantage, right? But that has to be coupled with experience work experience, skills building experience making mistakes in companies, making mistakes in roles so that they’ve learned what to do and what not to do and hopefully have developed a competitive advantage in some area that can be many, many different arenas. It could be that they have a technology advantage. It could be that they have a distribution advantage, they could have an extraordinary network and therefore have great access to partners going forward. But something that that gives you a sense that their work experience, their past experience is also going to help them going forward. 

[00:11:45] Debbie Goodman: So when you say that sometimes your instincts led you astray, what would have been some of the more common sort of mistakes? Where would you have been taken in? 

[00:11:58] Susan Lyne: Oh, I think there are people who are gifted storytellers who can pitch a concept, pitch a company in such a way that it really captures your imagination. But if they don’t have those two things I was talking about, lived experience, learned experience they, they often stay up there in the, in the imagination, right? They have a fantastic idea, but they may not be able to do the kind of core things that you need as you’re building a company. You need be able to recruit a great team, right? You need to be able to convince that they should join you. They should leave whatever they’re doing and come on board. You need to be able to make decisions quickly and to acknowledge that something is a mistake and move on from it quickly. There are lots of skills that become very important as you’re building an early stage company that if you’re not actively looking for them and trying to draw them out when you are doing diligence on this company and getting to know this founder, you can miss them. 

[00:13:16] Debbie Goodman: Yeah. I mean, it’s, it’s very similar to what I encounter in my work.

I’m, you know, I interview leaders and executives all the time, and some of them are just so impressive in terms of their personal impact and the way they come across. And it’s not even just the gifted storytelling. It’s just, they make such an incredibly solid first impression. And what I, my trick around that is because I know I’ve also made mistakes in the past is I, I write down all the things that I really am so impressed by and I keep it in a little spot on my, I still do written notes bizarrely, but anyway, it works for me. And then I go, okay, we’re just going to park that first impression. And now we’re actually going to go through the substance and make sure that I cover all of the right questions, because I have also just been so, sort of impressed by, by some people who are magnificent when they show up. So, Yeah, very similar, very similar to that. And I think nowadays, you know, there’s a little more time for investors to actually do that due diligence really well. And sometimes it’s not even the first pitch meeting, but it’s the way that people conduct themselves after that. How do they handle delays? How do they handle the curve balls? How do they handle the requests for further information that are so telling about their, you know, their personality, actually. 

[00:14:35] Susan Lyne: Yeah, no question. I mean, there are still occasionally those rounds that, that get done exceedingly fast. We try and stay away from them, to be honest, for all the reasons we’ve been talking about. If you don’t have the time to really get to, I’d say you’re never going to actually get to know a founder very well during the course of diligence because it’s never very long period of time, but you need to be able to meet with them multiple times so that you can see whether you learn something new each time, or is there sort of a script they follow. 

[00:15:16] Debbie Goodman: Yeah. Okay. I want to switch tack a little now and talk more about BBG Ventures workplace and learning revolution portfolio. Cause you invest in multiple sectors, right? There’s financial inclusion and healthcare and climates and the overlooked consumers. So there’s a lot. But what led to your decision to invest in the sector?

[00:15:41] Susan Lyne: I will say that the areas we’re focused on now, and I’ll get into that around work really started percolating during COVID. So like many people I sat up in my apartment and I was safe. I could do my work via zoom and I looked down on the street and I would see all these health care workers walking up to Mount Sinai Hospital.

I would see delivery people. I would see the folks going into the grocery store across the street. It became very clear very quickly that we really had a two tiered workforce, right? It’s the frontline work force that had to keep the economy going during COVID while the rest of us were safely doing our work from an apartment, a house, wherever we could be six feet away from other human beings, right? Right, work from home. Yeah. And as I dug into it, I, I came to understand that a tiny portion of the software investment had actually gone to this frontline and deskless workforce that they were still operating in many, many, many 20 years ago, 30 years ago. I think that’s partly because people tend to build things for the folks they know and to fix problems based on their own experience. And, because very few founders were coming out of this desolate workforce there just wasn’t that kind of momentum. So, you know, this is 35 million people in this book back. More than that it’s about 35 percent of the workforce in the US so it’s giant. And that has led us to some very interesting investments in companies. A company called Anthill that built a platform that allows companies to communicate very easily with their deskless workforce. These are people who don’t have a company email address, they’re not at a computer in the course of the day. So reaching them is actually very difficult. 

[00:18:02] Debbie Goodman: Yeah.

[00:18:02] Susan Lyne: Platforms all based on SMS. That doesn’t demand that you download an app that translates messages into up to 75 languages that will deliver messages or learning programs, whatever it might be at the reading level that this person needs. So it’s all very personalized as well. It’s a great company and we’re lucky to be investors in it. We invested in a company called Ox that is doing what they call human centered automation, which is really giving warehouse workers and three PLS wearables with software that directs them to where to go next, some of their hands free, and they can actually get their work done much more quickly. So really in companies like that, the other area we got really interested in during COVID. It was what we call solopreneurs. So another thing you probably noticed during that period of time was that many people who were either laid off or were working from home decided to build something, right? Maybe I should be a solopreneur or I need to do work even though I’ve been laid off, so I will become a painter or I’ll be an Airbnb cleaner. And all of these new companies started up that had single operators who needed software that would allow them to essentially acquire customers, get trust, ultimately invoice people, get paid. And so we invested in a company called Topline Pro that is doing that for it’s lightweight technology that’s using generative AI to allow solopreneur who’s out in the field all day to communicate with customers. 

[00:20:03] Debbie Goodman: These are amazing. And once again, now I see the tie in where you say the lived and the learned experience. So, I can get why many of the many of the founders of these companies have identified the pain problem because they have lived them. And so it would be obvious to find a solution to that, which might not have been thought of by anybody else who’s not a, a warehouse worker or a frontline healthcare worker or et cetera so, this is all tying in just perfectly. What a great business model and investment thesis that is clearly in a very niche. You know, there’s lots of workplace and learning and lots of HR tech and lots, lots of you know, LMS systems, right? So that’s not it for you guys. That’s we’re talking about something entirely different, very niche and very needed. I mean, when you talk about the solopreneur workforce, I mean, I’m seeing that all over the ecosystem, which is why we launched this fractional leaders offering Because we’re starting to see that even in your knowledge worker tech companies founders who typically would have thought that the only way to have a leadership team is to have them all full time Working in the same place all together. I mean, that’s a very outdated idea already. Yeah, we’re all working hybrid and remote first of all and then secondly, you could actually have a great, highly skilled leadership team populated partly with full time and partly with fractional or part time people who are very senior and experienced. So, you know, we’re seeing, we’re seeing that all over the entire workforce world.

[00:21:42] Susan Lyne:  I’m seeing it much more frequently now too. So it’s, it’s clearly taking hold. 

[00:21:48] Debbie Goodman: Yeah. And then when you talk about the software, I was just marvelling yesterday. I needed to, I needed to do a very quick photo shoot for a digital billboard display that we doing next week and to find a photographer and somebody to do makeup is like hard. Okay. I know I live in LA. It should be easy. I managed to do this thing in 24 hours, but what was most impressive is I got the contract and the invoice and everything just got signed automatically. These solopreneur workers are digitized and automated. And the entire process of contracting professionally is done as if they were at the highest echelon of professionalism, which was just something that really struck me.

[00:22:34] Susan Lyne: Yeah. And actually, in many cases, using more sophisticated digital products than a lot of the larger companies are, still have enough head count to get someone to pick up the phone and call you and messenger something over. 

[00:22:53] Debbie Goodman: Yes. Amazing. Okay. We’re running out of time here, Susan. What are your expectations regarding the workforce of the future? Aside from this, this evolution revolution towards not full time employees, anything. 

[00:23:11] Susan Lyne: Oh yeah, look, I think that the exciting thing right now is that AI, and when I say AI, I mean GPT-4 and ChatGPT. So it’s partly generative AI, but it’s also just the, the access to enormous amounts of data that allow you to create a much more personalized experience and to scale a business, I think more quickly than you could before a year and a half ago or 15 months ago when ChatGPT came out. I do remember that moment when when iOS launched and suddenly everybody realized that mobile was going to have a transformative impact on everything that was built and everything that, that currently existed and served Americans. I mean, remember back to the time when Facebook was just a browser experience, and there was a moment where Mark Zuckerberg said, I am not going to have a single meeting if it is not about mobile. So, you know, you can try to schedule me on something, but if it’s to talk about the, browser, I’m going to cancel it before it happens. So everybody realized that this was a moment when the world was changing and that you had to get smart about it and it was incredibly exciting if you did embrace it. And I think we’re at this similar inflection point right now where there are so many founders we’re meeting at this moment who have realized that they could do something different now, no matter what they’re building. It could be legal tech. It could be small business tech. It could be consumer tech. But they are all seeing that they can build something unique and new because. Now they have access to AI.

[00:25:27] Debbie Goodman: Which is an amazing segue into my last question, particularly for founders who, it’s been a rough road the last while it’s tough out there. It’s hard to raise capital. It’s harder than hard to raise capital for some. What advice would you give to those who are looking to raise capital? They want to stand out from the crowd. What would you say to people who are just thinking that the world has left them behind? Or it’s like, well, somebody just give me a damn break.

[00:25:58] Susan Lyne: Yeah. You know, it’s a hard question because there were periods of time where we did office hours every week and we really tried to make ourselves accessible to as many, particularly women as possible. And at the end of the day, while we have actually invested in a few companies that came in through cold outreach, it’s rare. I still think the best way to really get someone’s ear who is Investing is find someone who can connect to you, someone who knows me, someone who knows another VC. There are, there are good ways to do it. You know, look at my LinkedIn page, look at your LinkedIn page, see who the people are who know either of us. And start looking for somebody who can actually make that warm introduction. And then I would say, secondly don’t try to mirror companies that have been successful in the past. Really think about what you can do what you believe you can bring to the party that is different, right? What are you seeing that isn’t happening, right? Who are the consumers who are not being served? And what could you do that would be in some way transformative and that that technology can really help scale. 

[00:27:38] Debbie Goodman: Yeah. Okay. Well, those are amazing words of wisdom to end on for the listeners. Go back and listen to our podcast with Helen Nicholson on networking, because that is absolutely the key to success these days is to continue to develop and work in network, and you can do it digitally on, you know, online through LinkedIn.

So that’s a very important piece. And then, yeah, you got to be uniquely you. You can’t copy the people that came before you because that time has gone already. That’s you know, the brands that we think just mushroomed out of nowhere. They were first of all, working on them for decades in some cases, but that moment has passed. And so we’re in a very new moment in time. So Susan, thank you so much for all of that. I hope it’s an exciting 2024. Thank you for all the amazing work that you do, and I hope to see you again soon. Thank you. 

[00:28:33] Susan Lyne: This was really enjoyable. Loved our conversation. 

[00:28:37] Debbie Goodman: Bye now. 

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