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How Susan Lyne found the next big thing

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NEW YORK, NY - OCTOBER 02: Pattie Sellers and Susan Lyne speak onstage at The Evolution of a Brand & Careers.Photo by Paul Zimmerman—Getty Images

The motto for Susan Lyne’s multi-dimensional career is a simple one: Go toward the heat.

Before becoming CEO of AOL’s brand group in early 2013, Lyne ran the Village Voice, created Premiere magazine, co-headed ABC Entertainment, headed Martha Stewart Living Omnimedia (MSO) and then built Gilt Groupe into a digital retail heavyweight. What led Lyne through all those high-powered jobs was a drive to be where the action was happening.

“I got into the magazine business because that was where the conversation was at the time back in 1975,” Lyne told Fortune senior editor at large Pattie Sellers on Thursday at Fortune’s Most Powerful Women event during Advertising Week in New York. “If you wanted to participate and shape the conversations that were going on, magazines were the place to do that… That has been a driver of every decision I have made. Where is the conversation moving? Where are consumers right now? What is getting them excited? I want to be a part of that.”

Now the heat, for Lyne, is at women-led companies. Lyne relinquished her role as AOL brand CEO last month to start a venture fund that will invest in digital startups headed by women. Seeded by $10 million from AOL (AOL) , the BBG Fund — which stands for Built By Girls — will make seed and Series A investments in the range of $100,000 to $200,000. Just 7% of venture capital funding goes to women-led companies, says Lyne, yet research shows that investors get, on average, a 34% higher ROI when they put their money behind women.

What triggered Lyne’s new calling? Five enterprising 17-year-old women. AOL invited the teenagers, all graduates of a program called Girls Who Code, into its offices to redesign Cambio, its millennial news site. The five young techies did an extraordinary job on Cambio, Lyne says, plus they built an online contributor platform for young girls to write their own stories.

Spending time with these ambitious teens made Lyne–who has grown daughters–rethink her own career. “A generation ago, most smart young women thought ‘I’ll go work for a major company and work my way up, or I’ll go to law school or I’ll become a professional some way,” she says “There is a whole new wave of young women coming through school right now who think, ‘I can do what I want to do. I can build what I want to build. I can create something.'”

Lyne is 64–but she’s thinking more like a 32-year-old than a retiree. Now doing due diligence on two startups that will be the BBG Fund’s first bets, she’s excited by the prospect of riding the next big thing, whatever that may turn out to be.

“Two things happened in the middle of this last decade that completely transformed everything,” she says. “In 2006, Facebook opened up to non-students…and the iPhone was released in June 2007 and the App Store in 2008. Mobile and social are the two biggest transforming event that have taken place in my lifetime.”

“Maybe those two forces are going to be the drivers for a decade, but we don’t know that,” she adds. Her advice: “Something can come onto the market that changes the marketplace for everybody—so keep your eyes open.”