If you ask folks in the startup community to name the most important virtues an entrepreneur can possess, you'll hear a lot of votes for intelligence and persistence. Hopefully integrity will make an appearance as well. But few, if any, will name empathy. And that's a shame.
Empathy is the ability to understand and share the feelings of another (Google says so, so it must be true). This ability is hugely valuable to founders because they need to consider the feelings of so many different constituencies.
1. Your Team
Being able to empathize with your team members helps you build a company for whom people want to work. Understanding their feelings means you can know when you're pushing too hard, or when they need reassurance.
2. Your Customers/Users
The notion of the perfectly rational Homo Economicus has been thoroughly debunked; customers want to feel good about the goods and services they buy. Apple has built their entire business around this.
3. Your Investors
Like your team and your customers, your investors are a key constituency. But unlike your team and customers, your investors can fire you. Far too many entrepreneurs fail to read their investors true feelings, seeing what they want to see. If you empathize with your investors, you'll know what's worrying them and what you can do about it. And you definitely don't want them worried.
Empathy is mostly about making the effort, but if you want a more systematic way to improve your skills, I recommend taking a peer counseling training class.