Interview Edition: Aleksander Tonnisson

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Estonian Investor Aleksander Tonnisson on startups he invested in, what impresses him and meaningful advice for businesses in their early stage.

Describe yourself in 50 words or less.

My name is Aleksander Tonnisson – I’m someone who get’s excited very easily. It doesn’t take a lot to impress me. I like to focus on the positive side of the things, even though I’m very self critical and often expect same standards from people around me. Even though Estonian by birth and nature, I consider myself outgoing.

What led you to investing in startups?

I’m a type of person who likes to be involved with many initiatives, but I quickly learned that doing many things in parallel is not only impossible, but will kill you while trying. Being an investor gives me a feeling of being part in lot of world changing ideas, being able to do what I do best at the same time.

What startups are you currently involved in?

I have invested into 20+ startups. All of them are building real tangible products, most of them are in the IoT space building hardware interconnected with software. I prefer to invest into and work with startups who have business models with recurring revenues. Hardware very often is just an enabler and the real value is in the software platform built on top.

Describe your typical day from waking up to going to bed.

I usually don’t use an alarm clock. If I have to get out of the bed at a certain time, I use the Sense (I was their early backer) to wake me up when I’m in the light sleep cycle. I start my day with doing simple stretching and yoga exercises in bed followed by a cold shower. I like to be in the office before 8AM, before anybody else – I enjoy the first hours of the day without any disruptions. My lunch is rather random and I sometimes forget to eat. I try to limit my working days to 11 or 12 hours to be able to spend some time with my kids before they go to sleep. Before going to bed I try to read something short and inspirational.

Tell us about your best investment so far and why it succeeded.

My best investment so far was into a startup building measurement equipment for checking quality of optical surfaces. We all know that startups should be 10X better than their closest competitor, but we very rarely actually see such products. These guys were 50+ times more accurate than other products on the market. I also felt that this is the team, where we could add the most value – they were exactly at the right phase for us. It’s a company developing core technology, so we could see more than 1 way to exit the company.

Tell us about an investment you made which turned out to be unsuccessful.

There are too many to elaborate on all of them. But there is a pattern. Investing through an accelerator model it’s important that the teams are in the right stage to get the value out of the program, otherwise your wasting yours as-well-as their time. There’s also a strong correlation between founders age and being able to think as an entrepreneur. The investments which have failed didn’t fill those criteria.

7 years from now: how did your contribution change the startup world?

Estonia is well known not only for great SaaS and FinTech companies, but also hardware. We have competitive infrastructure available so that founders wouldn’t have to go to China. We have lowered the rate of talented engineers leaving the country and also attracted outside talent to move in.

What trend would you bet your money on? And how will it influence everyday life?

It’s more than certain that everything that can be connected to the internet, will be connected. We already speak of internet of everything, not only things. There are estimates, that there’s going to be around 10 times more things talking over internet in next 5 years.

What does it take for a startup to impress you?

Full dedication on all levels. We get to see lot of wantrepreneurs, with no idea nor will power to make their plans come true. We’re not looking for unexperienced teams, but founders who can be self-critical and listen to advice given to them. Something that many startups fail to understand and impresses me if they do, is that startup in the end is business as usual – it’s about generating revenue, making more money than you spend and having sustainable business model.

What do you offer your partners when you’re not throwing money at them?

Network. People who you know and work with will break or make your startup. A good idea without having the right team and people around you is not worth much. We see ourselves as co-founders and are fully dedicated, once we made the decision to invest.

Describe what a business relationship with you looks like.

I invest my time and effort into equal relationships. I don’t like people taking advantage of other people and I get turned off by arrogant and self centered human beings. Obviously, I’ll try to avoid those pitfalls myself and try to be instead honest, fair and straightforward, be it with my wife, team, mentors or startups I have invested into.

What’s something you’ve always wanted to know?

I have always wondered what makes me special. And even though I don’t have an answer yet, I have learned that importance of the answer to that questions decreases over the time. I’m quite sure that once I know the answer I’ve forgotten the question itself.

What advice would you give first time entrepreneurs and young startups?

Start with product-market fit. Do not spend any time in product development before you’re sure that there is a fit between what your customers are willing to pay for and your idea. Pivot as soon as possible, if that’s what your research tells you to. Start building the business from day one, instead of spending year(s) in product development and only then thinking about sales and cash flow.




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