Grammarly’s Growth, Glory, and Generative AI!

The story from Bootstrapping to a $13 Billion Breakthrough!

Nov 29, 2023

"Don't use words too big for the subject. Don't say 'infinitely' when you mean 'very'; otherwise, you'll have no word left when you want to talk about something really infinite"— C.S. Lewis

(Image Courtesy: Kathy and Ross Petras| CNBC Make it)

Wondering why I am starting this blog with a picture of common grammar mistakes? I’ll come to that in just a bit 😊.

From the casual two-step of emails to the formal in-detail reports, the complexities of grammar can either elevate or weaken your every move. Agree?

“With increasing internet power to dominate mankind, digital contents have become quintessential parts of the online marketplace.”
“With the increasing power of the internet to dominate mankind, digital content has become a quintessential part of the online marketplace.”

Notice the difference between the two sentences?

This shift is more than a mere play with words; it's about precision in communication and that brings us to another exciting narrative—the next chapter in our growth story—Grammarly. Whether you're a student, a consultant, a marketer, a financial analyst, or a university professor, Grammarly stands as your ally in elevating the quality of your written communication.

Moreover, this isn't just a tool for professionals; even those outside the traditional workspace turn to it daily. Whether renting out a house, updating a resume, or crafting an interesting dating profile, Grammarly is a versatile companion. The numbers speak volumes – with over 30 million daily users, Grammarly has become an integral part of countless individuals' writing routines.

Being a writer myself, I am curious to explore the story of this ubiquitous tool and share it with all of you. So, here’s an attempt to do so.

From Plagiarism to Precision

Back in 2009, three folks from Ukraine—Max Lytvyn, Alex Shevchenko, and Dmytro Lider—came up with something awesome: Grammarly. It's like a super smart writing helper that not only spots your grammar goofs but also fixes spelling mistakes, sorts out punctuation blunders, and even plays detective as a plagiarism checker.

These three weren't newbies in the tech game. They previously made My Dropbox, an app to catch plagiarism in essays. Now, they wanted to tackle a new challenge: helping university students get better at English.

Their mission is very simple: To improve lives by improving communication.

Alex, one of the founders, got the idea for Grammarly back in his university days. People were snagging essays from the internet left and right, and that bugged him. Their earlier project, My Dropbox, got so big it got sold to a famous education company called Blackboard.

Here's the part where it gets interesting. Max, one of the brains behind Grammarly, had to work with Blackboard for two years because of the deal. During that time, Alex couldn't start a similar project. But the second that two-year gig was up, Max joined Alex in Toronto, and Grammarly was born. They initially aimed it at schools, but soon enough, everyone could get in on the Grammarly fun.

Fact check: The decision not to bring in big investors at first, but to use the cash from selling their first product, was a deliberate strategy employed by Max and Alex to kickstart the Grammarly journey.

When Grammarly was just starting out, they were all about bootstrapping, as Max tells it. It wasn't until 2017 that they got their first batch of external funding. Going for the bootstrapping route was like picking the slow and steady ride. Sure, it might not have been as speedy as collecting investments from backers, but the best part is that they got to call the shots. No distractions from trying to grab funds all the time.

Choosing to bootstrap meant they were all about survival at first. Every move they made, whether adding new features or spending money to make the product better or tell people about it, had to make financial sense. It was like making sure every penny they spent came back to them quickly.

Once Grammarly started raking in some cash, they got more flexible with their approach. With a bit of money saved up, they went from just thinking about making quick cash to planning for the future. They started investing in product development and marketing. This evolution showcased how bootstrapping shaped Grammarly’s growth, making sure they were sustainable and smart in their approach.

So, why is Grammarly so awesome? Because, it catches mistakes and spots badly formed sentences too. It lets you set your writing goals, points out issues, gives you suggestions as well as explanations.

(image courtesy: grammarly.com)

Grammarly also knew that systems aren't perfect, so instead of letting the computer decide what's right, the power was given to the users. A voting system was set up, so that users get to decide which suggestions are spot-on. Furthermore, using the power of machine learning and deep learning algorithms, Grammarly developed into this remarkably proficient writing assistant.

By 2012, Grammarly pulled in around $10 million in revenue. By 2017, they had a solid 6.9 million active users. The big moment came when they locked in a massive $110 million in their first big funding round that same year, attracting interest and investment from General Catalyst, IVP, and Spark Capital. This turned Grammarly into a global sensation.

To give a precise count of their funding rounds - it is 3 with a total of 11 investors. They secured $90 million from investors in October 2019, hitting a $1 billion valuation. General Catalyst and some other investors were leading the charge.Their grand slam was a Series B round on Nov 18, 2021, where they got a substantial $200 million. This time they brought on new investors like Baillie Gifford and BlackRock.This shows how Grammarly is rewriting the rules of writing with style. As of 2021, Grammarly generated an annual revenue of $88.7 million and is valued at $13 billion during their last round of funding of $200M.

EAGERly moving forward

Every ship charts its course with a unique compass—its core values. These guiding principles are not just fancy words on a mission statement; they're the very lifelines that determine a company's trajectory. Imagine a ship without a compass—adrift, uncertain, and perilously close to turbulent waters. Just like a captain relies on the North Star to stay on course, companies rely on their set of values to navigate challenges, steer through storms, and reach their destination.

So, what’s Grammarly’s secret sauce? Well, it's all packed into their EAGER values—Ethical, Adaptable, Gritty, Empathetic, and Remarkable. principles are the backbone of everything they're about and they have adopted these values wholeheartedly to boost your writing confidence and keep you away from the copy-paste game.

Setting the tone to this section with some EAGER vibes, I want to now time-travel through the greatest moments in Grammarly's history - from inception to present.

2010: Grammarly debuted its editor, laying the foundation for its comprehensive writing assistance.

2013: Recognition soared as Grammarly earned a spot on the Inc 500 list, signifying its rapid ascent.

2016: The spotlight intensified as Grammarly gained mainstream acknowledgment for its grammar checker capabilities.

2018: A pivotal year as Grammarly seamlessly integrated with Google Docs, eliminating the need for document copying and pasting.

2021: Adapting to changing work dynamics, Grammarly embraced a work-from-home model for its employees, aligning with global shifts.

2022: Reflecting its commitment to values, Grammarly severed business relations with Russia and Belarus, also providing free access to its tool for Ukrainian media during challenging times.

2023: A milestone year as Grammarly launched GrammarlyGO, an AI-powered writing assistant built on GPT-3 language models. In October, the company welcomed Rahul Roy-Chowdhury as its new CEO, signaling a new chapter in its growth story.

As we reflect on the pivotal moments that shaped Grammarly's history, it’s time to meet the individuals who created history. So, moving on to the human side of this story, let’s learn about Max Lytvyn, Alex Shevchenko and Dmytro Lider.

(image courtesy: grammarly.com)

The human side that is beyond language

(From left to right: Max Lytvyn; Alex Shevchenko and Dmytro Lider)

Meet Max Lytvyn, the tech wizard with roots in Ukraine and a knack for all things computer since the early '90s. In his teenage years, Max built his computer out of spare radio parts and learnt machine coding too. Around 2001-2002, he shifted gears from coding to thinking about building companies, marking the beginning of his venture into the business side of tech.

Having called Canada home for most of his adult life, Max's journey into Grammarly was driven by a personal struggle. As a non-native English speaker, he faced the common hurdles of grammar and spelling errors. Growing up in a family deeply connected to engineering, with a computer programmer for a father, Max's early fascination with computers paved the way for his later foray into the tech industry.

In 2005, landed in California to join Intel as a software engineer. Little did he know that this stint at Intel would be the breeding ground for this incredibly cool writing tool. Currently Max rocks the title of head of revenue at Grammarly.

Drawing a Parallel

Similarly, Ramesh and Sri, the brains behind Highperformr.ai, started their business because they faced a common problem – getting their work out there for people to see. When they started Growthstore, they realized that dealing with distribution was tricky. So, they came up with a smart solution: Highperformr.ai, a tool that makes content generation simple to make you socially active extremely simple. It's their way of fixing a problem they knew all too well. Their story is all about using technology to solve everyday problems and make things better for everyone.

Beyond Grammarly, Max plays the role of an active investor and advisor, especially in startups focusing on artificial intelligence and machine learning. As of March 2023, Max Lytvyn is riding the billionaire wave with an estimated net worth of $2.2 billion.

Alex Shevchenko, the co-founder and product lead, brings a unique perspective to the tech industry. Graduating with a bachelor's degree in 2001 from the International University in Ukraine, Shevchenko entered the grammar and language space here.

Like many others, Alex faced personal challenges, including undiagnosed ADHD since he was knee-high to a grasshopper. While ADHD granted him what he refers to as "superpowers," it also triggered anxiety and depression. The outbreak of war in Ukraine, where Grammarly had over 400 employees, added immense stress, exacerbating his mental health struggles.

As part of Mental Health Awareness Month, Shevchenko shares his story to change the narrative around mental health and encourage others to speak up. His turning point came when he started working with a therapist. Shockingly and a bit weirdly, diving headfirst into work and embracing all the uncertainty that comes with startup life helped him kick anxiety in its butt. Who would've thought?

Last but not the least, we talk about the man behind the linguistic magic that makes Grammarly what it is - Dmytro Lider. Armed with a bachelor’s degree in computer science and a master’s in software engineering from the National Aviation University in Kyiv, Lider was already well-versed in the world of code.

When Max and Alex were assembling their squad, they spotted Dmytro's talent and brought him on board as a software engineer. Today, he holds the crucial position of Head of Language Technology at Grammarly.

In a recent interview, Dmytro spoke about the origins of Grammarly, attributing it to the essence of Ukrainian society. He says it is important to make the most of what we have got and function effectively.

In his own words, "Essentially, Grammarly is a product of Ukrainian society. We prefer to work with what we have, look for opportunities, and think about how to leverage them. We’re trying to do our work well."

This idea is not unique to Ukraine. We've seen a similar spirit in our previous blog about Atlassian, where Australian founders broke through in the tech world. Just like Grammarly, which started in Ukraine and became a global success, Atlassian's story highlighted how people outside the U.S. are making a big impact in the SaaS industry. It goes to show that success knows no borders.

Testing Waters and Acquiring Their First 100,000!

In the early days, when Grammarly was trying to get its first 100,000 customers, they tackled it in two ways. First, they went for B2B sales, showing their product at conferences and talking to potential buyers. This helped them learn about the problems users faced and how they could help.

At the same time, they wanted regular people to know about Grammarly, so they used social media and paid ads. Even though paid ads cost money, they liked them because they gave quick feedback. For example, they could see in a few hours if people clicked on an ad and if those clicks turned into users. This quick feedback let Grammarly test different ideas, messages, and even features. They could see what worked and what didn't, something not as easy with other methods like SEO. So, even though paid ads might seem costly, Max suggests not ruling them out, especially for learning and experimenting when you're just starting out.

Ramesh shares a parallel perspective with Max, believing in the effectiveness of paid ads. They believe that getting a lot of people interested in your product is imperative to the getting feedback. Ramesh, like Max, knows it's crucial to try different things and learn from the quick feedback that ads give, setting the stage for strategic and informed growth.

Grammarly’s business model - The Write Way!

Making money is essential for every successful business. Grammarly did something unique by focusing on earning money early on. Instead of just getting free users, they sold their platform to schools and universities. They targeted serious users like researchers, educators, and students, making sure they paid for the service.

While many startups were chasing high user numbers without a clear plan to make money, Grammarly took a different path. They knew that having a reliable income was crucial. They collected data from their users, especially from those who paid, to make their product and algorithms better.

By constantly improving their product and algorithms using data, Grammarly made sure it got better over time. This not only made users happy but also set up a strong foundation for long-term growth. This way of growth is often linked with strategies that focus on the product leading the way to attract and retain users.It's what we call product-led growth.

Grammarly used to make people pay for their services, and their main users were researchers, teachers, and students. But later, they introduced a freemium model. This means they let people use some features for free but also offered a paid version. This strategy has led to a valuation of over $1 billion and millions of users worldwide.

This smart approach allowed Grammarly to be independent and not rely too much on investors. Some startups get pressured by investors to increase their value quickly, even if it's not sustainable. Grammarly focused on building a product that users love, and that's what made them successful.

Revenue streams

Grammarly generates revenue through premium subscriptions for individual users, businesses, and educational institutions.

Premium Subscriptions for Individuals:

-Free users get basic features.

-Premium users enjoy advanced features like plagiarism detection, vocabulary enhancement, and genre-specific style checks.

-Subscription plans are available monthly, quarterly, or annually.

Grammarly Business for Businesses:

-Offers team management tools, priority support, and centralized billing.

-Pricing varies based on the number of users and subscription length.

Grammarly@edu for Educational Institutions:

-Provides premium features for students and faculty.

-Pricing depends on the number of users and subscription duration.

Other Revenue Streams:

Apart from subscriptions, Grammarly makes money through:

Licensing its software to universities.

Offering expert writing services, including proofreading and editing.

Value Propositions

Grammarly offers several value propositions:

-Real-time grammar and spell-checking.

-Plagiarism detection.

-Writing style suggestions.

-Integration with platforms like Microsoft Word and Google Docs.

-24/7 customer support.

Channels

Grammarly reaches customers through:

-Its website.

-Search engine optimization and content marketing.

-Social media platforms.

-Affiliate marketing.

Customer Relationships

Grammarly maintains customer relationships through:

-24/7 customer support.

-Regular tool updates.

-Engagement on social media and digital channels.

Cost Structure

The cost structure involves:

-Development and maintenance of the tool.

-Customer support expenses.

-Marketing costs.

With this business model, Grammarly has turned into the world's leading AI writing assistance company, helping over 30 million people and over 70,000 professional teams work faster and smarter every day.

Riding the AI wave. There needs to be a section about Grammarly’s AI prowess.

(image courtesy: businessmodelanalyst.com)

Choosing the Perfect Fit - The Write Choice!

As shown in the table, there are many tools to help with writing, each with its own strengths. Whether you want advanced grammar help, a guide for your writing style, or just simple editing, these options have something for everyone. While Grammarly has a lot to offer, these other tools also bring good things to help you write better. The best choice depends on what you need, so it's essential to check out each tool to find the one that fits your writing needs.

SWOT - Behind the Write Lens!

After competitor analysis comes SWOT analysis. With this we understand what makes Grammarly work and where it needs a bit of backup. So, peeling back the layers of this literary onion, we see what makes Grammarly tick.

Grammarly Strengths

Rock-solid Reputation: Grammarly is like the rockstar of grammar and writing tools, known and loved by many. It's got a huge fan base that swears by its ability to make writing better. The brand is so strong that it keeps growing, bringing in more users and cash.

Try Before You Buy: Grammarly’s cool freemium style lets you test the waters for free. You get a taste of what it offers without opening your wallet. It's like a free trial for the premium goodies, and lots of people have jumped on board because of it.

Grammarly Weaknesses

AI Hiccups: Grammarly's main hiccup is relying on AI and machine-learning to spot writing mistakes. These brainy algorithms are good, but they're not perfect. Sometimes they goof up, missing errors or giving weird suggestions. It can be a bit annoying, and users might think about trying out other tools.

English-Centric Vibes: Grammarly doesn't speak all the languages. It's mainly for English pros, leaving out some language lovers and those speaking English as a second language.

Grammarly Opportunities

Fresh Ideas for Users: With Grammarly ruling the grammar world, it can totally brainstorm and whip up new stuff for users. Keep them excited with fresh products and features.

Speak More Languages: Grammarly has a golden chance to be the language master for more than just English. Expanding to new languages? Totally doable.

Team Up with Pals: Imagine Grammarly teaming up with other cool companies! They could join forces and offer bundled services or even squeeze Grammarly into their products.

Hello New Users: Grammarly can make even more friends by reaching out to new markets. Students, professionals, and folks who speak English as a second language are all potential buddies.

New Ways to Share: Grammarly could also think about getting out there in more ways. Social media, mobile apps—there are so many places to hang out!

Grammarly Threats

Battle of the Tools: Grammarly isn’t the only player in the grammar game. There are other tools flexing their features and deals, making it a tough competition. Grammarly might have to share the spotlight and lose some users.

Security Woes: Here’s a scary one—data breaches and cyberattacks. Grammarly collects lots of info from users, and if it gets hacked, that's bad news. People might lose trust, and Grammarly’s reputation could take a hit.

(image courtesy: businessmodelanalyst.com)

Get Set, Go with GrammarlyGO!

“Generative AI represents an inflection point in innovation that Grammarly can incorporate to deliver even more value for our customers,” - Rahul Roy-Chowdhury, Grammarly’s CEO.

AI is everywhere, and Grammarly is part of the race. They've upgraded their tool by adding generative AI features. With this, their goal is to make the editing experience for users even better.

GrammarlyGO, built on GPT-3 like many AI writing tools, doesn't necessarily have a quality advantage but leverages Grammarly's existing strength as a robust editing tool.

Accessing GrammarlyGO is easy. If you use Grammarly on the internet, you can turn on GrammarlyGO by clicking the GrammarlyGO button on the right side. If you have the Chrome extension or desktop app, you can find GrammarlyGO by clicking the light bulb icon.

Even if you use the free version of Grammarly, you get 100 prompts per month, and this number starts fresh every month. If you need more prompts, you can choose to upgrade to Grammarly Premium.

This generative AI feature can do many things:

Personalization: You can make your writing style more formal, casual, or witty.

Composition: It can create text, but it works better for short content than long articles.

Rewriting: It can change the tone of the writing but might have trouble with big changes.

Ideation: This is a powerful feature that gives you ideas to improve your writing.

Reply: It works with other apps like Gmail and Google Docs to turn short notes into full messages.

Adding on, from its widespread usage to improved editing and handy integrations, GrammarlyGO brings unique aspects to the table:

Size:

GrammarlyGO is unique because it's used by a lot of people—30 million every day! This big number means many users are trying out generative AI for the first time through GrammarlyGO. They've made it easy by adding free AI features to a platform people already know, helping millions try AI with just a simple click.

Editing Skills and feedback sessions:

If you already use Grammarly for editing, you'll love GrammarlyGO even more. The Ideate feature is super helpful; it tells you what's missing in your writing.

The feedback prompt in Grammarly helps by giving you advice on your writing as you work. Grammarly might suggest things like "check how strong your main idea is" or "consider other viewpoints." The feedback doesn't just point out mistakes; it also explains why they are mistakes and helps you learn from them. So, with GrammarlyGO, it's easier to turn good writing into something even better.

Working with Other Apps, Especially Email:

GrammarlyGO's Reply feature is like a helpful tool in platforms like Gmail, Google Docs, and Microsoft Word. It can save you a lot of time, especially if you deal with customers or send a lot of internal emails. This makes writing faster and easier.

Considering the whole Generative AI thing, Jenny Maxwell, who heads Grammarly for Education, says that educators need to embrace new technologies like AI in smarter ways and use it responsibly. According to her, educators should use tech like AI to amplify learning, not add complexity. Adopting a responsible stance on AI in schools not only hones writing skills but also cultivates critical thinking in our tech-centric world.

Speaking of which, GrammarlyGO is a go-to many top-notch schools like Berkeley, Cornell University, Harvard Medical School, Howard University, Johns Hopkins University, and IIM Ahmedabad trust. It helps students write better, which is pretty handy, not just in school but in the real world too.

Finally, Grammarly is serious about keeping your stuff safe. No selling or renting your data. Plus, they're all about security, privacy, and making sure AI does not misbehave. So, with GrammarlyGO, they're sticking to their mission of making education smoother and smarter for everyone.

In a nutshell, from its humble beginnings in 2009, guided by the vision of Max Lytvyn, Alex Shevchenko, and Dmytro Lider, Grammarly has evolved into a global phenomenon with over 30 million daily users. Beyond its grammar-checking capabilities, Grammarly reflects a strategic journey, from bootstrapping for sustainable growth to embracing generative AI with GrammarlyGO. Its freemium model, commitment to user data-driven improvements, and many more revenue streams have aided it in exceeding the $1 billion mark.

Like how Grammarly is your key to enhancing communication, refining your ideas, and expressing yourself with precision; Highperformr empowers you to effortlessly curate tweets and create captivating content. With AI at its core, Highperformr Social CRM, starting with 𝕏, boosts your social presence, making growth a smoother ride for you.

Cheers to companies like Grammarly and Highperformr that leave an indelible mark on effective communication, influencing students, professionals, and beyond. Ciao folks!👋See you soon with my next story!

What’s new at Highperformr.ai?

Their 𝕏 Growth Funnel in Analytics

Exciting news from Highperformr! They've just introduced the "Growth Funnel" in Analytics, a special tool that helps you understand how your Twitter actions impact key metrics. It tracks new posts, replies, total impressions, engagement rate, and follower growth. Plus, Highperformr's AI Coach takes it a step further by providing personalized recommendations to optimize your Twitter strategy based on your tweet history.