“There are two kinds of people in this world,” said the young entrepreneur. “Sympathy people and empathy people.
“Sympathy people have a heart for the people in need and want to help but don’t know how. They don’t really understand the problem.
“Empathy people have a heart for the people because they are one of them. They have the heart and understand the problem needing to be solved.
“Sympathy people are important because they contribute resources to empathy people. That’s how the world works. That’s how big problems get solved.”
Knowing the Secret Sauce
When he told me this, it was like I was hit by lightning. He summed up one of my angel investor beliefs into a principle, a truth. Easy to explain and easy to get.
My most successful investments came from entrepreneurs who knew their market firsthand. Men and women who cut their teeth and developed their experience in the industry for which they created a new service or product.
These entrepreneurs knew their market cold. They were intimate with their market. Not only did they know the initial prospective customers, but they also had the network and reputation to hire the best people.
Most importantly, they knew the secret sauce of their market. This included how the people in the market think, talk and buy. This market secret sauce can take years to figure out. The entrepreneurs who have it are valuable, very valuable.
Two Truths on Empathetic Entrepreneuring
I was talking to an entrepreneur recently about this new found principle. I told him the story just as I am telling you.
He said, “What you are saying is true. But an entrepreneur can learn to be an empathetic person. He can learn the secret sauce. He can come to the market’s understanding of the problem he is solving. He doesn’t need to come from the market he is about to serve to be successful.”
I agreed, but later a couple of truths struck me.
Truth 1: It takes time to learn the secret sauce of a market. And we all know time is money. The entrepreneur may figure out this secret sauce eventually. I learned through observation, and with some bad investments it took three full years.
Three years of learning while running full tilt in the startup could cost millions. This is an expensive education. By the time you “get the degree,” it may be too late.
Truth Two: To be successful long-term, the entrepreneur must be committed to the market long-term. He must become one of them to serve them. He must love the people and the culture of the market to ultimately succeed. He has to fit the market. This is a significant investor risk.
It just makes sense to me to invest in empathetic people whether they are running for-profit or nonprofit organizations. Empathetic people have the best chance to succeed. That’s where I’ll put my money.
Also published on Medium.