In the first week of Colorado’s shelter-in-place order, I stood stunned listening to a dialogue unfold between an expert on a national news program and a woman who had just lost her job.
The woman was not sure how she was going to pay her bills that were due on April 1, let alone feed herself. “This too shall pass,” was the news contributor’s response to her suffering.
Where was her empathy? How can you rationally tell someone who is two weeks from having her economic security pulled out from under her that this too shall pass?
Problem: lack of empathy, lack of action
The news contributor made me angry, very angry. Crises such as these should catalyze action, not cliches. What if someone had told my father — who survived two POW camps, lost all but four of his teeth to malnutrition, and risked his life and the lives of his three daughters in pursuit of freedom — that this too shall pass? Would he have been brave enough to hope for a better future in the United States? Would he have been brave enough to pursue freedom?
If my father had accepted his and his family’s fate in wartime Hungary — that this too shall simply pass — I wouldn’t be where I am today.
As I listened to the woman describe her hardship, I could feel her pain viscerally. While I was not two weeks away from personal insolvency, I was grappling with where to find my start-up’s next round of funding. Nearly 20% of start-ups, including my own, had just had their term sheets canceled. My family and many others were relying on me to figure it out. How would I keep the lights of my start-up on? In times like these, platitudes are not enough. We must stand up and take action.
An updated definition of empathy
Empathy is a verb, not a noun. It is born in the greatest of tragedies — of people coming together, taking collective action together, and rising together. The act of empathy is two-fold: First, we must put ourselves in someone else’s circumstances to feel their pain; second, we must use the experience to fuel action.
After all, what is the utility of empathy if not to inspire positive change? It’s one thing to care about the issues theoretically. It’s another thing to influence the issues via real-life application.
If we want COVID-19 to lead us toward a better tomorrow, then we need to embrace empathy as a verb. We need to lean on empathy to inspire action.
Solution: Let your empathy mobilize action
One Friday in early March, in a somber conference call, my team asked me a question I had been wrestling with all week: “What should our response to the pandemic be?”
We needed to lean on empathy to mobilize action. How were we uniquely positioned to serve others? As the founder and CEO of a SaaS platform, I had been cautiously observing COVID-19 take hold across the U.S. And I had an idea. We launched two campaigns, one of which was a call-to-action to ensure the solvency of female-led start-ups. While I won’t get into the details of this campaign, you might be surprised to discover the economic rationale behind it.
Why female-led start-ups matter
The Darwinian theory of natural selection, when applied to start-ups, leaves out an essential factor: It assumes we all start at the same starting line. We don’t. In 2019, male-founded companies received 97.3% of all venture capital funding. In other words, less than 3% of funding (representing $3.54 billion) went to companies founded by women. Yet in the same year, WeWork took in $5 billion.
As $660 billion of fiscal stimulus allocations dry up, and as U.S. jobless claims rise to 30 million, 40% of rational, structurally sound start-ups are operating in the “red zone.” The red zone means they have three months or less of cash runway left.
This cash problem cannot be solved with another two-week sprint or beta-test on a product iteration. It’s acutely existential. Start-ups need capital to keep the lights on today. Female-founded start-ups especially need funding to keep their businesses running because, as mentioned above, they receive disproportionately less investment than male-founded start-ups.
Accepting a this too shall pass approach would be akin to suicide — and it would come with grave economic consequences for all.
Saving the start-ups — why it matters
Start-ups will help lead a strong economic recovery. They drive job growth, foster innovation, develop pools of skilled workers, and will lead us into the Fourth Industrial Revolution. In 2017, the U.S. saw the creation of 415,226 start-ups that lead to 1.7 million new jobs. Moreover, start-ups provide a major source of skilled workers, advanced technology, and digital infrastructure that established enterprises depend on for innovation.
The economic case for supporting start-ups goes even further when they are led by women.
In addition to providing the aforementioned benefits, female-led start-ups return a greater share of investment as compared to their male-led counterparts. Whereas male-founded start-ups generate 31 cents for every dollar invested in their companies, female-founded start-ups generate 78 cents for every dollar invested.
Saving female-led start-ups is in everyone’s best interest because they are an investment in our economic recovery. In fact, venture capitalists who commit to gender equity could expand projected returns to their LPs by $4.4 trillion.
This data, coupled with empathy, propelled me to launch the COVID-19 response campaign for female founders. In the midst of this crisis, how might you draw (or how are you drawing) on your empathy to facilitate action? Imagine the future world we could create if we used COVID-19 to accelerate positive change.