Deer Snorts, Bubbles and M&A

While peacefully enjoying a book the other night, I was jolted out of my seat by a bizarre sound in the woods. After peering into the darkness for a few minutes, I realized it was a deer snorting. I had no idea that deer made any sounds and this one is very strange (click to listen). Having my quietude disrupted by this ungulate made me think about how this current marketplace for all-things-technological is going gangbusters (aka a bubble). And how sometime in the future there will be an unexpected event to trigger the eventual “correction”.

Reading the popular press, one infers that the bubble is a: about to burst (Forbes) or b: is going on for another 2 or 3 years (Bloomberg). Either way it bodes well for you to take stock of your situation and realize that some slowing is in the offing. This is particularly true of companies that are either growing very fast or are considering selling their business.

• If you are growing rapidly, you are adding lots of resources, customers are paying good (high) prices, and partners are lining up to “help” you. Be sure you do not get over-extended in your zeal to reach double-digit growth per quarter. Having a good reliable plan and forecast can help ameliorate any overhang on your expenses and commitments.

• If, on the other hand, you are looking to sell your business in the near future, the near future is probably closer than you think. According to Dealogic, healthcare M&A for this year is at a record pace and is in the third year of significant growth. Since healthy windows for M&A usually last 3-5 years, you better start polishing up your business if you want to catch this wave. Eventually acquisitions become too expensive and the consolidators will become satiated.

So before you get shaken out of your comfort zone by some unruly beast, spend some time to look at your future plans. Run a few scenarios by your colleagues to be sure that you can take advantage of the current situation and still be in good shape after the marketplace cools a bit.