Many people see the world of finance as dog-eat-dog, but recent data indicates that the best companies are often the most empathetic ones. A Global Empathy Index report showed that the top 10 businesses on the index outperformed the bottom 10 by 50 percent.
Related: How to Find Your Profitable Idea
This makes perfect sense. Founders often build businesses out of a personal need to address their frustrations with the status quo in their industries. Developing a company around a passion or personal problem motivates many entrepreneurs to design high-quality products, by prioritizing honesty and transparency — not just profits and viability.
Empathy isn’t just a feel-good corporate social responsibility concept; it’s also smart business. When you build products and services to meet your own needs, you already intimately understand the pain points, use cases and obstacles your audiences face.
The best ideas start with empathy
My personal vexation with the volatility, low returns and lack of investment options outside of the stock market inspired me to start my current company. I wanted to enable millions of Americans, myself included, to enhance their financial well-being by providing access to high-quality investment products that only the wealthiest investors had previously enjoyed.
Having been in my customers’ position before, I set out to build an easy-to-use, transparent investment platform where I could browse and understand offerings, invest with a few clicks and manage my portfolio in real time. To eliminate the complexity of investing without obscuring important educational information, we designed the system around needs and concerns: Why am I investing? What impact will my investments have on my financial wealth? How do I get paid back?
Solving a problem I myself had encountered as an investor enabled me to empathize with my audience and design solutions that spoke to their needs. Every feature of the platform addresses real-life issues; nothing is extraneous or superfluous. If you develop your business around filling a genuine need for yourself, you can connect more meaningfully with your potential customers.
Here’s how to take an empathetic approach to developing successful, customer-centric products:
1. Solve your own problems.
Seek out opportunities in industries where current offerings are inadequate or controlled by monopolistic companies that provide poor service. Dig around and find out whether your friends and family members share your complaints. Then, start building an alternative.
Joe Gebbia and Brian Chesky, for example, built a $30 billion company by solving their own pain point. After renting out their loft to cover rent, they realized they probably weren’t the only ones who wanted to make easy money off of their abode. They scaled their concept, and the resulting company, Airbnb, became one of Silicon Valley’s greatest success stories.
Uber, another Bay Area unicorn, got its start in a similar way. After Travis Kalanick and Garrett Camp couldn’t hail a cab one snowy evening in Paris, they came up with the idea for an app that would allow them to book a ride with the tap of a button. When Uber launched in San Francisco in 2009, it offered a much-needed alternative to the city’s fractured transportation system. The rest, as they say, is history.
2. Make sure you (and your teams) know why you do what you do.
Before diving into product development, ask yourself some questions: Why this product? Why this industry? If you’re driven purely by profit and feel no enthusiasm about what you’re creating, stop what you’re doing and find something that ignites your passion. You can’t get on your customers’ wavelength if you don’t care deeply about the problems that your product will help them solve.
Take Jan Koum, for example. He started WhatsApp as a way to post status updates from a phone, and he initially wanted users to pay for the app. But when he heard from a lonely exchange student who cried herself to sleep every night because she couldn’t afford to call her family back home, the true mission of his product came to him: Make it easy and cheap for people to communicate from anywhere in the world.
It was this shift in his “why” that led him to sell WhatsApp to Facebook for $19 billion in 2014 — so that his vision could be fully realized.
All employees should also share your “why” so they’re working not only for the paycheck, but also for a way to turn your vision into reality. The products, marketing and branding should always reflect your underlying mission. As Simon Sinek says, people don’t buy what you do; they buy why you do it.
3. Don’t just sell to people — educate them.
Every industry has certain areas that are difficult for the general consumer to comprehend. Think about which aspects of your field were most challenging for you to understand; then, use your insights to illuminate those areas for your clients. They’ll appreciate the forthrightness, and they’ll be more likely to buy from you because of the added value.
The biggest challenge my company faced was the perception that investing is confusing and inaccessible. According to research by Transamerica, 72 percent of millennials surveyed said they didn’t fully understand retirement investing. It’s our job, then, to educate them on strategies and options.
Our YieldStreet University now includes more than 100 pieces of content designed to make our product accessible and easy for everyone to understand. When upward of 40,000 readers return repeatedly to your educational materials, you know you’ve struck a chord.
Human beings are innovation engines. We constantly evolve to make our lives easier and better. Technology enables entrepreneurs to leapfrog past barriers and reach unprecedented numbers of consumers. But, remember: You can’t lose empathy with your customers as you use those emerging tools to conquer new markets.