Now that the Saharan dust has settled, we’re in for a heatwave here in England, at least for the next few months! A rare occurrence.
The other week, on the subject of heat, someone told me ‘the M&A market is so hot now’. If someone has to tell you something is hot, how hot is it?
We’re currently in a market where people are paying significant revenue multiples.
Typically, your portcos will be chasing these increased revenues aggressively; it’s considered sexier or perhaps more straightforward for firms to go after more revenue. With M&A, you can even buy yourself more revenue.
This might be OK for the growth investor, but surely, you can’t solve all your problems with revenue?
Rapid growth can often create structural technology challenges, compounded by M&A
These structural challenges can manifest themselves as bottlenecks in how applications function. Performance issues at scale. Slower or more complex product development cycles.
When you talk about revenue growth with your portco tech leaders. How do they react, what concerns do they have, what plans are they making?
Do they know the scaling limits of their systems today? Do they have well-defined non-functional requirements? Do they look at ways they can meet growth targets using technology?
Keep leading; it matters.
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