Growth Strategy Review
Lumen · growth options for FY27, and the one to take
01 · Recommendation
The mid-market is open now. The rebuild can wait.
Lumen’s position is stronger than the last board review assumed. Retention is best-in-class, mid-market inbound has doubled in a year without a single pound of targeted spend, and the product already meets the segment’s requirements as shipped. What the numbers do not support is the enterprise push: cycles run twice as long up-market and close at roughly half the rate.
We assessed four strategic options against a common scorecard. One clears the bar decisively. The mid-market entry asks for £1.2m of FY27 budget, reuses the current platform as is, and models payback inside six quarters. The platform rebuild is a real need, but an FY28 one; funding it this year would starve the growth motion to fix a constraint Lumen has not yet hit.
02 · Options assessed
Four options, one clear winner
Each option was scored out of ten against five weighted criteria: value creation, time to impact, execution readiness, capital required, and risk. The map below plots value against readiness, and draws each option at the size of the capital it asks for; the shaded quadrant is where FY27 money should go.
Weights: value creation 30% · time to impact 25% · readiness 20% · capital 15% · risk 10%. Capital at ask: A £1.2m · B £3.1m · C £1.8m · D £0.9m. Option A recommended; B deferred to FY28; C and D not pursued.
03 · Key findings
Three findings that frame the decision
Enterprise cycles run twice as long, and close half as often
HeadwindMedian sales cycle is 96 days in the enterprise segment against 47 days in the mid-market, with win rates of 19% and 34% respectively. CAC payback stretches from 11 months to 29. The up-market motion consumes the sales team’s best capacity for the weakest unit economics in the book. SR-03 · 24 months of pipeline data
Pricing leaves margin unclaimed
OpportunityList price has not moved since January 2024. Discounting averages 18% and shows no correlation with deal size, and benchmark peers price 12–15% above Lumen for equivalent seats. A disciplined reprice with a discount floor is worth an estimated 4–6 points of gross margin without touching the product. SR-07 · peer set of 31 companies
Retention is best-in-class at 94%
StrengthGross revenue retention of 94% and net retention of 109% put Lumen in the top decile of its peer set. Churn is concentrated in the smallest tier, below £6k ACV, precisely the accounts the mid-market motion replaces. The retention engine is the strongest argument for buying more customers now. SR-11
04 · Decisions & next steps
What we are asking the board to decide
| Ref | Decision | Owner | Date |
|---|---|---|---|
| DR-01 | Approve the mid-market entry: £1.2m FY27 budget, two-pod sales motion | Board | 11 Sep 2026 |
| DR-02 | Stand up the mid-market pod; first hires in seat and territories assigned | CRO | 30 Oct 2026 |
| DR-03 | Reprice new business from 1 Jan 2027; hold a 12% discount floor | CFO | 30 Nov 2026 |
| DR-04 | Re-scope the rebuild as incremental service extraction; full review at FY28 planning | CTO | 15 Jan 2027 |
Two pods of three, hired from October against named mid-market territories.
First paid programme behind inbound that doubled without spend.
Deal-desk tooling and enablement to hold the 12% floor from January.
Incremental extraction only; the full rebuild question returns at FY28 planning.
This review is tabled at the 11 September board. The page updates in place ahead of the meeting, so this link is always the current version.