Startups that don’t have revenues or a business model, like Seesmic or Twitter, are going to get squeezed big time in the next six months. Already we’ve seen how Seesmic responded to that coming squeeze yesterday. It got skinnier to make the squeeze easier to take. They will be joined over the next month by tons of other startups who will get skinny to prepare for 2009.
But what at the other end of the scale? What about small companies that have millions in revenues and are very successful? I’m hearing they are getting squeezed too. I can’t reveal the names yet, but I’ve been talking with companies who have millions in monthly revenues who can’t get credit or funding to expand and they are seeing customers disappearing from the marketplace at the same time, so they are getting squeezed. What do they do? They are turning away from capital markets and turning toward bigger companies who have the cash to buy them.
Expect to see a bunch of mergers and acquisitions over the next three months (you’ll see some in the next few weeks, again, I have several sources in big companies who’ve told me what they are seeing — there are bidding wars breaking out inside big companies to gobble up some of these smaller companies that will bring needed revenues to big companies’ bottom lines. Those revenues will be how the bigger companies pull their stocks out of the discount bins over the next few quarters).
CEOs: I’d love to hear about what kinds of pressures you’re under right now, even if you’re successful with millions in sales every month, and how you are responding to those pressures.