You're asking about the < symbol in the diff output! That's another excellent question.
Just like > indicates a line from the second file, the < symbol tells you something about the first file being compared.
Specifically:
<indicates a line from thefirstfile.
So, for the output you saw:
< this is file1
This means that "this is file1" is the content of the corresponding line in the first file that was compared (file1 in this case).
In simple terms, diff is showing you what the line was in file1 before it would need to be changed to match file2.
Do these symbols make more sense now that you know which file they refer to?