How former Gilt Groupe CEO Susan Lyne took down Patty Hearst, took over Martha Stewart's empire while she was in prison, and now empowers women entrepreneurs
- Susan Lyne is the president of BBG Ventures, a fund for early-stage startups that have at least one female founder.
- Before BBG, she led Gilt Groupe, Martha Stewart Omnimedia, ABC Entertainment, and a movie magazine.
- She says to have a multifaceted career like hers, you can't be afraid to fail.
She dropped out of college and lived in a commune. She wrote for magazines and then founded one.
While leading ABC Entertainment, she green-lighted "Grey's Anatomy" and "Desperate Housewives." She later led Martha Stewart Living Omnimedia while Stewart was in prison.
During the recession she led Gilt Groupe to financial success.
Her name is Susan Lyne, and now she's helping more female founders through a fund called BBG, or Built by Girls.
"That's been a consistent theme through my professional life: How am I going to impact consumers?" Lyne told Business Insider's podcast, "Success! How I Did It." How am I going to make change in some way? It doesn't necessarily have to be political change, but how am I going to have impact?"
On this episode of "Success! How I Did It," Lyne spoke with Business Insider senior strategy reporter Richard Feloni about how she's made that impact, from green-lighting "Lost" and "The Bachelor" to changing how people shop to promoting female entrepreneurs.
Listen to the full episode:
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- Tibetan monk Matthieu Ricard
- Tennis superstar Venus Williams
- PayPal founder Max Levchin
- NBC News host Megyn Kelly
Following is a transcript of the podcast; it has been edited for clarity.
Richard Feloni: You grew up right outside Boston, the daughter of a lawyer turned entrepreneur, and you were the oldest of five kids. How did that affect where your life would take you?
Susan Lyne: Well, look, I think oldest children have a different mentality or know that there were different expectations of them, and I was not only the oldest child - I was the oldest grandchild of 18 grandchildren. I definitely grew up feeling like there were a lot of people who expected me to do something. But it was a very conservative family, very conservative neighborhood. We're talking mid- to late '60s when I was growing up there, and so if I had stayed in the Boston area, I think my life would have been radically different.
All my friends at the time, if they had careers, they often put them aside once they had children. I went to an all-girls school. Again, quite protected. But I was turned down by Harvard, so I was not able to stay in the Boston area, and I went out to UC Berkeley. It was a completely different world and also a completely different time. You know, 1968 was a time of massive change around the country, and for a protected Irish Catholic girl from a Republican family, it was eye-opening and really exciting.
Feloni: It sounds like you were rebelling against expectations set for you.
Lyne: I was actively rebelling against them for a period, but it was also that I just didn't want the life that I saw a lot of people back in my neighborhood leading.
Feloni: How do you mean?
Lyne: A suburban life was very comfortable, lots of great clubs around, lots of good schools for kids, but for somebody who grew up thinking, "I want to do something, I want to have an impact on the world," it was not necessarily the place you could do that.
Feloni: In this part of your life, didn't you spend time on a commune?
Lyne: Yes. Well, it wasn't a commune. We called it a collective, which really means that it wasn't out in the country.
Feloni: I'm sure your Republican family really enjoyed that, yeah?
Lyne: Yeah, loved that. Yes, they did. But, you know, honestly, my family was great about this, ultimately. I think that my mother particularly was horrified by my politics, by the people I was hanging out with, but over time they realized that that had opened up a world to me that was going to give me a different set of choices. In time, they got close to some of my crazy boyfriends, and they embraced my friends coming back to Chestnut Hill. It, I think, had an impact on the way they thought about the world. My mother still wished many, many times that I would rein in some of what I was doing, but, by the time I was in my 40s and I was working in the television industry, she was incredibly proud of what I was doing, and I think recognized that the path to get there was not ever going to be Chestnut Hill.
Feloni: When you were just starting out on that path, you were saying earlier that you were driven by this desire to change things. When you were in California, what was kind of forming this idea? What change did you want?
Lyne: Well, it started because I came of age at a time when the antiwar movement was very strong and when early feminism was a touch point for any young woman who was growing up in the Bay area, so those were things that made me think, made me read. I just knew that my generation was going to change the direction the country took. I was completely convinced that we would have a very different kind of society as a result of the protests that I was part of, and I think that's partially true. We obviously never really got to what many of my generation believed was possible, but the amount of change I've seen in my lifetime, both social change and political change, is staggering. I think my generation can take a little bit of credit for that by just opening up the conversation.
Feloni: When you were just starting out, you dropped out of school, correct?
Lyne: I did. Twice.
How Lyne broke into the magazine world, and broke a big story
Feloni: Then you ended up at Francis Ford Coppola's magazine, right? City?
Lyne: Right. Yeah.
Feloni: What drove you to that? Why did you get out of school, and what drove you to the magazine world?
Lyne: So, honestly, I think I was really impatient to be in the world and not to be a student anymore. While I was in school, I did freelance work for a couple of magazines. I liked what I saw. I liked the fact that people came together and batted around ideas, and then, as an editor, you would look for the perfect writer for it, somebody who could make it better than you imagined, then ultimately putting an issue together was about getting the right mix and the right tone. It was just everything about it was exciting to me.
So I talked my way into a job as the assistant to the editor-in-chief of City Magazine, which was a magazine Francis Coppola had actually acquired. He didn't launch it, although it was an unknown, tiny, little entity until he did buy it. He really believed that there was a way to create an alternative to New York Magazine out in San Francisco. It was understaffed and it was full of really interesting people, so, like most understaffed operations, you've got to do more than just your job.
Feloni: A highlight of your magazine career was when you had this story about the kidnapped heiress, Patty Hearst. This actually was brought up in her trial, correct? This piece?
Lyne: Right. Yeah.
Feloni: It contributed to her being put in jail, right?
Lyne: Yes, it did.
Feloni: Was that satisfying to be driven by like, "I want to enact change by whatever I'm doing?" Was this something that was like, "Oh, this is a success right now?"
Lyne: I didn't think about the prosecution of Patty Hearst as much as I did about the fact that there were a whole lot of people who were talking about the story. You know, when you are in the magazine business, yes, you want your magazine to be talked about. You want your publication to be driving the conversation, and for a couple of weeks we definitely were.
Feloni: Now, at what point did you found your own magazine, Premiere?
Lyne: That was 1986. In the interim I'd worked for a couple of magazines, but among them I had been the managing editor of the Village Voice, and I had met a man there named John Evans who started out as the classified-ad director, became the publisher. I reconnected with him in '85, and we started talking about how there should be a movie magazine for adults, that the world was changing, and, oddly enough, it was a technological development that enabled me to start the magazine.
That was the VCR, because, before VCRs, your only alternative, if you wanted to see a movie, was either to go out to a movie theater or to watch what was on one of three networks. It was a very limited assortment you could see. Once you had a VCR in your house, if you saw a movie you liked by Marty Scorsese, or Francis Coppola for that matter, you could go back and see every other movie they had done. It created both a much bigger, deeper audience for films, and a smarter audience for films, and a whole lot more interest in the movie industry. So that's the magazine we started, was really a look at the movie business as well as movie making, and at Hollywood as a small town.
Feloni: What was that experience like? Was it a learning experience that helped you later in your career?
Lyne: I didn't really think about it being a huge change until I got into it, and I realized that I was constantly looking around for somebody I could show what I was doing to, because I still wanted approval, I still wanted somebody to say, "Yes, this is good. Go." It took me really, I would say, the first year to get really comfortable with the idea that I was the final say. I've told a story about John Evans. In fact, I tried to make him that final say for a period of time. I sent him over stories and he would ignore them. I finally sent him my editor's letter, and he called me up and he said, "Susan, don't ever send me stuff. This is your magazine. I don't buy a dog and bark for it." It was his way of saying, "This is yours and you've got to own it." It was definitely tough love, but it was a useful thing for me to hear. It was a turning point for me.
Feloni: I would imagine that was useful, even well outside the magazine industry.
Lyne: Absolutely. Yeah, definitely.
How Lyne moved over to movies and TV
Feloni: After writing about movies, you ended up in the actual movie business, with Disney. How did that come about?
Lyne: I got to know a lot of people in the movie industry in the eight-plus years that I edited Premiere. Among the people who I got to know well was Joe Roth, who was running the Disney studios at the time. He had said a couple of times, "You should come work at Disney. You know a lot about movies, you could do many things here." After Premiere was sold for a second time, this time to Hachette, I decided, OK, time for me to go. I've done this, and onto my next career. The initial job, which was for the studio, turned out to be not right for me. I've never really gotten the movie industry, it just doesn't work for my temperament. I think the fact that you make something and the only time you have input from the people you're making it for is when you put it on a screen, I found very challenging.
Feloni: Were you worried that you would be losing this creative energy that had defined your career before that?
Lyne: Yeah, and speed, right? I mean, one of the great things about the magazine industry is that you're just constantly moving. You know this from Business Insider. You're onto the next thing immediately, you're getting feedback from the people you write for all the time, and that makes you better and it makes you understand what they want to read about or listen to or watch.
What I realized is that it was also true about the television business, and so within a couple of years I moved across the street to ABC, which was wholly owned by Disney. Initially, I ran movies and miniseries for them, which was a really fun job. At the time, all the networks were making 20-plus movies a year and a couple of miniseries and maybe a few limited series, and so you were making things all the time. I think, in part, because I didn't grow up in that business, I didn't have any assumptions about what worked and what didn't, and so we did some things that were definitely against the grain and they worked. Things like musicals with great casts, and they were event television.
Feloni: Your task at ABC was to bring hits to the network, right?
Lyne: Exactly.
Feloni: I mean, you had "Lost," you had -
Lyne: Well, that was my next job.
Feloni: That was your next job. OK, got it.
Lyne: In 2002, because I'd had some success in the long-form industry, they asked me to run prime time. It's one of the best jobs you could possibly have, I mean really exciting, because every year there's a pilot season and you're making a bunch of what could become new series with terrific producers, terrific directors, and a lot of great talent. I would say for the first two years that I was doing that job, I sort of went with the conventional wisdom, which at the time was that men wouldn't watch a show made for women, but women would watch a show made for men. So, you ended up with a lot of procedural shows that were closed-ended and everyone was chasing the next "CSI." In my third development season, we just went completely against the grain and said, "We're going to find the next girls' show."
Feloni: Is that when you had "Desperate Housewives" and then "Grey's Anatomy"?
Lyne: "Grey's Anatomy," "The Bachelor," and "Lost," which turned out to be a huge crowd-pleaser for both men and women, and actually, as it turned out, there were plenty of men who were watching "Desperate Housewives," too. But this idea of programming for women and making sure that they felt like these were their shows ended up being a smart move for us.
Feloni: So that's how you could tell there would be a hit, when you saw that "Let's go for this market and it will end up bringing everyone in"?
Lyne: Well, it's always a crap shoot when you make a pilot. One of the things I realized very quickly is that you could have a great script, and you could cast it wrong, and it would die, or you get the wrong director for it and just would never live up to what you expected. Alternatively, there were some things that were significantly better once they were on the screen. But in the case of "Desperate Housewives," it was a great script that was incredibly well cast and well directed, and worked on every level. So did "Grey's Anatomy," and that was really the first series that Shonda Rhimes did for ABC. She was remarkable back then, as she is even more remarkable now, but one of the things that she did that was very smart and unusual, she wrote the script with no descriptions of the people who were playing parts, so was not an African-American actor or an Asian actor. Then she brought in a very mixed group of actors to read for all the key parts. So, it became a very diverse show without anybody thinking about that before we picked it up.
Feloni: That was just one of several hits that came out under you when you were leading prime time. You were given that job to crank out hits, but you were fired just after two years.
Lyne: I was, yeah.
Feloni: What happened there?
Lyne: Well, two and a half years. But, yes.
Feloni: Two and a half. What happened?
Lyne: We were in fourth place when I took the job, and we were still in fourth place when I put the shows we were just talking about onto our schedule, but they hadn't launched. In fact, we hadn't even announced them. It was two weeks before the up-fronts that I lost my job. On one level, it's not something that was completely unexpected. When I took the job, a well-known producer said, "Nobody retires from these jobs. You will be fired at some point."
Feloni: Really?
Lyne: Yes. I just thought I would have a longer run.
Feloni: What made you take it even when you were basically being warned that you'd be fired eventually, even if it wasn't after a couple of years, just some point down the line you're going to be fired from this job?
Lyne: Because it's one of the great jobs. There are certain creative jobs where you know you are the person on the line, and there are few guarantees that you're going to be able to crank out hits every year. For the most part, it's a roller coaster. You look at Fox, you look at NBC, you look at ABC, and they've been up and down over the years and in every different position. So if you are somebody who is not afraid of risk and you love the creative process, it's great. Why would you not do it?
Feloni: I read in Fortune that after you had left ABC, that the showrunner of "Commander in Chief" actually based the character of the first female president after you. What was that like when you found that out?
Lyne: The producer of that show was interviewed for a column in The Times, and my husband came into our bedroom with The Times under his arm, chuckling. He was just very entertained. It was such a lovely gift to get when I was relatively low, that he had, as he said, based the character on me.
How Lyne worked with Martha Stewart after her time in prison
Feloni: After ABC, you ended up at Martha Stewart's media company, to head that up. That was at a time when the CEO you were replacing had been fired, and then Stewart, she was headed to prison. What was it like going into this type of situation?
Lyne: Yes, as I've said, not afraid of risk. It was a really interesting moment. Again, I think that I'm definitely drawn to situations where a lot's at stake. I knew the brand really well. I had been a huge admirer of what Martha built on so many different levels because I think it was a very smart business model that she had. It was doing incredibly well until she was indicted and ultimately convicted. I was on the board at the time, and I saw a couple of things. One was that her customers did not leave. They, in fact, doubled down on her. We were seeing people who were taking two-year subscriptions instead of one-year subscriptions; they were buying more product at Kmart.
Feloni: So there was even more loyalty because of it?
Lyne: There was. I think they really felt like she got a raw deal, so they were quietly showing support for her. At the same time, advertisers fled. The magazine, which had been hugely profitable, was bleeding cash. The question was: Could we get it back? The one thing that I heard over and over again from advertisers when I went out to ask them about it was, "We want to come back, but we're not going to do it until this has passed," which meant that she had to go to prison. That was a tough decision because any normal person would say, "I'm going to appeal this."
People were very surprised by the conviction. Instead, she went off to Alderson, in West Virginia, and did her five months there, and then another five months under house arrest. Once she had agreed to go to prison, it seemed to me that we had a great chance of rebuilding the company. We had a lot of fun doing it, certainly for the first few years that I was in that role. She did an amazing job wooing advertisers back once she was under house arrest. She was hosting two, three dinners a week at her house in Bedford, for advertisers, groups of eight or 10 people. Nobody said no because they all wanted to come out and see her ankle bracelet and have a story about Martha just out of prison.
Feloni: Was she in good spirits during this time?
Lyne: She was in great spirits. You know, she was very impressive when she went off to Alderson. She kept her sense of humor.
Feloni: Did that help you?
Lyne: Yeah, definitely. After a certain point, I think she needed to be running her own show, she didn't need me anymore, but I stayed until the company was profitable again.
How grief changed how Lyne approached her career and life
Feloni: Around this time, your husband had died, and this was a dark period. I had seen you say that this was actually another turning point in your life.
Lyne: Yeah, huge.
Feloni: Could you explain a bit on that notion of what it taught you about what you wanted to get out of your career and what you wanted to do with your life?
Lyne: You know, I wouldn't wish this on anybody. My husband died of pancreatic cancer, which is a really brutal form of cancer, and it's very fast. But you get warning that you have a limited amount of time, and, because of that, and because my husband was extraordinary about the experience, all our children came back and moved back in essentially. They were either there every day or they literally moved back in. I know that all of my children really feel like nothing was left unsaid to their father, and that's a big gift, when you have the time to be able to really dig deep with someone you love, and not feel like, "if I'd only had that one conversation I wanted to have with him."
In many ways, I went through a lot of my adult life thinking about, "What's next? What's next? What's next?," and always having my eye on tomorrow as opposed to what's happening at this moment. That experience forces you to really focus on the moment. I've said my husband really taught me to be present during that period.
You know, it was the one demand he had. Don't be texting people or answering phone calls when we're sitting together. This is our time. It was really important to me, not just for that experience, but it's been really important ever since. If I'm with somebody and I'm talking to them, I am not thinking about anything else. It's something you have to practice, and he made me practice it.
Feloni: Has that changed the way that you've handled relationships, whether in your own life or in business?
Lyne: Yeah, absolutely. Yes. It doesn't mean that I'm not frantic about what's going to happen in the coming week, but if I'm in a meeting, I'm fully there, and if I'm with my kids, I am fully there.
Feloni: Has that made you a better leader as well?
Lyne: I think it has. I think it's made me a happier person too. I have no doubt that if I had just kept on operating the way that I had during large periods of my adult life, I would not be as happy and satisfied, and all those good things, as I am today.
How Lyne started to influence Silicon Valley with BBG Ventures
Feloni: Are you able to get some of that satisfaction from when you joined the startup world, which was more about creating things?
Lyne: Yeah, absolutely.
Feloni: Could you tell me what drew you into that? Did it start with Gilt Groupe?
Lyne: It did, yes. Gilt was started by two young women, and because they had started something that grew fast and was an exciting touch point for the city of New York, we had many, many young women who were interested in founding companies, or who had started companies, coming through the doors. Many of them found their way to my office. I advised a lot of them and I look at that moment as a real tipping point. Actually, Gilt was founded, or launched at least, at the very end of 2007. It was right after the iPhone launched and right before the App Store launched.
Feloni: And you maintain this optimism for growth and building things, even within the recession?
Lyne: Yeah, I did.
Feloni: How?
Lyne: Well, I was at Gilt and that's a start. Gilt was one of the few companies that actually probably benefited from that period because there was a ton of excess inventory, great excess inventory, that came our way.
Feloni: And Gilt was about providing deals on luxury items.
Lyne: Yes. Gilt was an e-commerce company that, every day at noon, launched new sales of great brands at highly discounted prices.
Feloni: And so that actually benefited from the recession.
Lyne: And it allowed people to shop who might have felt very guilty about it under other circumstances. That's not the main reason that I think Gilt worked, though. I think it wasn't just the discounts. I think there was really something quite unique about the whole experience that sort of combined entertainment and shopping. Nobody felt guilty about taking a five-minute break from their work and just going in and seeing what was on Gilt.
Feloni: So you use this experience with startups. You became a founding partner of BBG, and that was spun out of AOL, correct? In 2014?
Lyne: Our first fund was wholly backed by AOL, by Tim Armstrong. He is still, or the company, now Oath, and Verizon, are our two largest LPs. They've been incredibly supportive of this conceptually as well as physically. I think that we are not a strategic fund for them in the sense that a lot of corporate VCs are, but what we are doing is really getting an early look at how consumer behavior is changing, what consumers want, what's going to make them really happy, and that I think is incredibly valuable.
Feloni: It seems to be an opportunity to draw in a lot of the lessons from your career in terms of what works with consumers, specifically female consumers and female-led companies.
Lyne: Yeah, absolutely.
Feloni: It's kind of all coming together.
Lyne: It's true.
Feloni: I imagine that's very gratifying.
Lyne: It's great.
Feloni: At the start of our conversation, you were saying that your career has been led by where is there an opportunity to change things. What's really interesting is that, as you're leading BBG right now, there is so much happening across the country, but even with tech, in terms of Silicon Valley rethinking its dynamic between genders and really taking a deep, close look at gender discrimination in Silicon Valley, whether it's how companies are run or where venture-capital money is going in. What is your mission, and what do you see that you are in a position to help make a difference here?
Lyne: So I would say, at the nucleus of this, it's how do we get more venture capital to women. Last year, less than 3% of all venture capital went to female founders. That's shocking. Now, it's better at the seed stage, but as you get up into growth rounds, it's increasingly men who that money is going to.
Feloni: Why do you think so?
Lyne: I think there are many, many reasons. I think two of the biggest reasons are that computer science, as a major, has been dominated by men, and so the people coming out of CS programs have been male, and the venture-capital partnerships that have grown up since the '50s were almost exclusively male. That was partly because many of the people who formed some of the earliest tech companies then became venture capitalists, but it's also because people tend to hire people like themselves, or when they're starting a partnership, to bring in people who they know and like.
I think there was a kind of cluelessness about what the long-term impact of that was going to be. We launched BBG Ventures three years ago, on Labor Day, and it's only been in the past year that we've started seeing some of these partnerships open up and bring in a female partner. That, I think, is largely because they're starting to think, "OK, we're going to miss deal flow if we don't have somebody on our team who's got those networks." Nothing gets people's attention more than the fact that they could miss out on a big deal.
Feloni: And you're in a position to have an influence in tech through BBG.
Lyne: In my own little way.
Feloni: I'm sure that a lot of listeners will be admiring the way that you've been able to go through different industries and get so much out of all these different positions. What would your advice be to someone who wants a career like that, where they can be in charge and not feel pigeonholed?
Lyne: I would say, first of all, don't be afraid. I made multiple leaps where there were no guarantees that I was going to be successful. By the way, I was not always successful. But I think if you go into something new with an open mind, and you let people around you know what you don't know, for the most part they're going to link arms with you.
So you can't plan a career so closely that you never make a move unless you know that it's going to work. There's always going to be risk involved in change, right? But, you know, I see many, many young women now - and that's part of what excites me about the startup world - who have left great jobs and said, "I think I can build something." Eighty percent of them will probably fail at it, but they'll learn a ton, and they'll either be much better when they go back into a corporate job or they'll start a second company and they'll succeed. That's the way that we learn. We learn by making mistakes.
If you genuinely want to have a multifaceted career that takes you into multiple industries, then I think you have to be willing to fail.
Feloni: Thank you so much, Susan.
Lyne: Thank you.