Full text of Aleksander Tõnnisson’s talk: The dangers of foregoing emotional due diligence at TEDxRiga conference.
Aleksander Tõnnisson – Co-founder and CEO at Buildit Hardware Accelerator
How are you doing today?
Thank you. Isn’t this a great place to be? But for a moment, I would like you to leave this place.
Maybe for you it’s just a few hours, maybe for you a few days. And the people at the back, more relaxed ones, maybe it’s few weeks, because what I wanted to do is try to remember the last decision, which you wish you didn’t do.
Often we find ourselves saying in these situations later that I knew I had a bad feeling about it, but we still went ahead and did it.
Do you remember the feeling, the feeling you had just before you made a bad decision? Scratch your nose if you did. Some of you were picking nose.
But I really want you to hold on to this feeling because we’re going to need it later. See if we don’t trust our feelings, how can we really trust our decisions? Because of our feelings is our intuition. And just by listening to it, we make better decision. Doesn’t matter whether small or big.
So this is a dishwasher, in case you haven’t seen one. You know, it’s a really funny story. When I was living in America, people were asking me: do you have refrigerators in Estonia?
And I’m like: No. I think Latvia has few. But we just throw food out of the window to keep it cool.
This luckily, we do have dishwashers in Estonia. This one is not a random one. This is my dishwasher. It’s brand new. I spent hours and hours on YouTube looking for a perfect one. I made an Excel sheet comparing water consumption, electric consumption, noise level.
And I went to the stores to see what’s on the offer, and I bargained for the price before I bought it. So I made a lot of smaller and bigger decisions before buying it.
What you don’t see on this picture is my old dishwasher. I actually already had one. It looked exactly the same. It did exactly the same job.
So why did I buy a new one? Because my wife told me that our old one isn’t working. So we had this conversation one evening and she said, “Honey, have you noticed that our dishwasher isn’t working properly?” And I’m like, I’m not really sure. I’m not using it a lot.
So what happened was that I bought a new dishwasher because that seemed like an easy way out of that conversation.
So this is just a few weeks later. And I’m not an expert, but shouldn’t the dishes go inside the dishwasher?
While you’re laughing, my wife wasn’t laughing when I told her.
So anyway, what really happened was that my wife wasn’t saying that the dishwasher isn’t working. She was saying that I’m not working and she needs my help around the kitchen.
So all I had to do at that moment was to ask her how she feels. And she would have told me that actually she misses my help around the house.
So for me, this dishwasher was like an investment, but they made the bet on the wrong horse and they lost my money, which if I would have spent on flowers, I imagine would have given me a much bigger return on investment.
And if it’s really, really ironic, because if there’s one thing I do know a lot about is about investments.
So this is me. I’m not the guy with a funny face. This is some GDPR in action. And they gave this guy an American smile because he actually is an American guy. I spent most of my professional time looking for good investment opportunities. I’ve made 70 investments. I’ve invested in 18 countries. This is what I do.
What you see on the picture is somebody who is confident, I guess, something like today.
There’s a lot of things you probably didn’t notice about that picture. One is that I’m holding onto my arm. Maybe some of you noticed. The reason for that is that on that particular day, I was on stage like today, not in front of 600 people, but 100.
But I was extremely anxious, so I was feeling very, very high anxiety and not like a normal anxiety like I feel today but disabling anxiety. So holding onto my arm actually gave me a sense of security.
But you also don’t see in this picture is somebody whose self-image is dependent on other people’s opinion. I was actually so hungry for other people’s approval, but they spent all my time and then energy in the companies I invested.
And in reality, I really felt terrible doing it because there was no energy left for myself. But they completely disregarded that feeling because I was so detached from my own feelings.
And I lost again; this time myself.
I still remember the exact day, exact hour, people I had around me; food on the table, smells in the air when I had my first panic attack. Followed by another one in 30 minutes. And that was the only starting point.
That was a downward spiral of what you call a mental breakdown or burnout. It has a lot of names.
I was diagnosed with extremely high anxiety. I started having panic attacks daily. And they ended up in the hospital having severe chest pain.
See, I used to have very, very high expectations towards all the people I was working with, all the companies I’ve invested in, and even higher for myself. I was first one in office. I was the last one who left the office. I was working on weekends. I had every single minute of my day planned.
And all of the sudden, I was in a situation where I wasn’t able to even to do the simplest tasks. Answering e-mails seemed impossible. Sitting through a Skype call, impossible.
And I actually even developed the claustrophobia. So then whenever I was in a situation where I couldn’t just stand up, I leave, I was feeling very uneasy. And I was completely disregarding my feelings, because that was what I was told, that your investments: they should be calculated. They should be rational. They should be based on hard facts.
See, investments are a lot like buying a dishwasher. Only instead of spending hours on YouTube, we put companies through what we call a due diligence. So in our case, we ask companies 176 questions. Before we even go into contract negotiations, which takes another two weeks at least.
So you could say what we’re doing is that we strip the naked before our eyes and we look at the smallest details.
The funny thing about it is there’s not a single question about feelings. How did this startup people make me feel? Did I feel a good vibe in the air between the founders? Do I like them as a person?
And believe me, there’s a fair share of dishwashers I have invested in.
So I want you to imagine startup meeting and investor. Everything’s perfect. We have beautiful presentation. They know answer to every single question. They’re dressed up; they are on time. They’re motivated, smart.
But there’s this little annoying feeling that something’s wrong in the picture. But since you cannot put your finger on it, you disregard this little annoying feeling.
And this is exactly how we invested in a company, which after we invested, went ahead and did a preorder campaign, so basically selling an idea for something which customers will get in the future.