Alert! Fire sale on the horizon

It’s more or less official now that the world economy is moving into a recession. And while this usually means that economic activity drops, it may also signal the start of an excellent season for striking excellent M&A deals.

It may be that your gain is somebody elses loss. But that shouldn’t stop you, if you are looking to Buy rather than Build yourself.

So why is this coming now? Well, Om Malik says it well in a post about personalized web page startup Pageflakes, which is apparently running into trouble itself:

Many 2005-2006 consumer web startups that have failed to grow real-big-real-fast will find life increasingly tough, with many facing the fate of Pageflakes. Stay tuned!

I agree completely. Gone are the days of insane valuations. It’s time to get real about what things are actually worth, and the opportunity for striking a good deal will be great in H2 of this year. So if you’ve got money stashed away to go spend on technology you can fit right into what you’re trying to do yourself, you may be heading towards excellent times.

But mind you: This is not the time to go out thinking that you can do what these failing startups are doing today but do it better. Because odds are you can’t. You should only be dealing in the market if you have a very specific need for a piece of technology and the startup in question could be that missing piece of the puzzle.