The history and evolution of Grammarly, one of the most successful products that did not attract investment. Starting in 2008, Grammarly has become one of the most successful products on the web that has not attracted investment.
Grammarly's free extension has been downloaded almost ten million times, and the company has attracted seven million DAUs (daily users). As a result, Grammarly's key metrics - the number of users and revenue - are doubling yearly. Only gambling clubs can overtake Grammarly in popularity. For example, more and more people decide to Join Bollywood, so the number of visitors to the site is multiplied by four every year.
In 2017, the company received its first investment of $110 million from a group of investors led by General Catalyst. Grammarly's creators achieved this success by focusing on one main benefit for users: helping people communicate more literately.
Grammarly is one of the most famous Ukrainian startups. The main office of the company is now located in Silicon Valley. Three Ukrainians founded the service - Alexey Shevchenko, Maxim Litvin, and Dmitry Lider.
Recently it became known that the total amount of investments in Grammarly is about 200 million dollars. This funding raised the company's total value to more than a billion dollars. So from now on, the Ukrainian startup can officially be called a "unicorn."
Now Grammarly services are used by millions of regular users around the world. However, it is only for English-speaking users, and the developers do not plan to expand the number of languages for testing yet.
Grammarly: History of creation
The startup was founded in Kyiv in 2009. At first, it was called MyDropbox. Its idea was to prevent plagiarism in academic papers. So after a while, the company Blackboard, which provides educational services, bought the startup.
Although the guys were no longer working on the project, some questions remained. For example, the developers wanted to understand why students were plagiarizing. The answer was seemingly obvious - people didn't want to put much effort into writing an exclusive. So the developers decided to help a little with writing papers, that is, to create a service that would correct errors in writing.
By the way, the new startup also did not immediately get the now-familiar name. At first, the service was called Sentenceworks and focused on the educational market. Then the name was changed to EssayRater. In this way, the developers wanted to attract a young audience, particularly students. So only in May 2010 they changed the name again to Grammarly.
Today, Grammarly uses sophisticated algorithms and machine learning to make billions of monthly recommendations to improve writing. But in 2008, when Grammarly started, the company was trying to develop a product that would work with limited resources.
In the early days, Grammarly founders Alexey Shevchenko and Maxim Litvin from Kyiv focused on two aspects of achieving this goal:
- Creating a product around an environment, they knew they could easily find paying customers;
- Using customer feedback and revenue to improve the product.
- You must find paying customers as soon as possible when you have no outside investment to control the average monthly cost.
A shift in marketing strategy
With the move into the consumer market, Grammarly had to focus much more on marketing and how new customers get to the top of the sales funnel. Early on, they were creating content for bookers and posting it on Facebook. But, as SMM manager Kimberly Jockey notes, "it was a small, specialized audience that was not enough." So the company revised its approach.
Instead of just posting material about common grammatical errors, the company switched to practical advice. For example, they explained how to write a resume, prepare for a job interview, or write a business letter. By 2013, Grammarly had more than a million followers on Facebook. By 2016, there were seven million.
Product development
This shift in marketing strategy went hand in hand with product development. For example, with Grammarly's web editor, users had to copy text from the word processor to the browser, which caused overlaps. So instead of attracting users to Grammarly, the company focused on enabling the service to save organizations' documents and automatically proofread them.
The first step toward that goal was to create a plug-in for Microsoft Word and Outlook. Then, suddenly, users could access Grammarly exactly where they started the texts.
By 2013, the company's revenue growth reached 2326% over 2009. They already had three million registered users.
How does Grammarly work?
It's a service for checking your written texts. In addition, it helps to correct grammatical and stylistic errors. A free version is available, as well as Premium, which expands access to additional features.
The paid version allows users to check text directly in Microsoft Word. In addition, they get access to 250+ text-checking rules and the ability to analyze 30 different writing styles (academic, technical, formal-business, conversational, etc.). A subscription for a month costs $ 30.
You can install plug-ins for Word and browser (Chrome, Safari, or Firefox). The second option is more convenient because the system will check the text in Word and messages in social networks, official letters, and the like.
Fighting the competition
Of course, the services are not unique in the market. In addition, in 2017, Microsoft updated the spelling functionality in Word, adding artificial intelligence-based responsiveness. And in early 2019, Google introduced its grammar checker for Google Docs.
But Grammarly does not stand still either. The service recently got an interesting new feature - detecting the letter's tone. The system can warn the author what impression their letter may make on the recipient. It looks promising and revolutionary.
"What we've accomplished today is just the beginning. We're only a hundredth of the way to the world's 2 billion English-speaking people. We still have a long way to go, " says Grammarly CEO Brad Hoover.
Grammarly's Perspectives
This year, for the first time, the company received $110 million in funding from General Catalyst to increase its staff and improve the machine learning algorithms in the product.
In an interview, General Catalyst managing director Hemant Taneja said: "The company is about to move into a new stage of development. They have steady audience growth and a steady business, but they will need to scale the team and find effective solutions to some problems to be more successful. They will probably also need to streamline business processes and diversify user types."
The company has room to grow. Here are a few key areas:
- Machine learning and AI;
- Using new communication channels;
- Going back to educational institutions.
While artificial intelligence and machine learning are ubiquitous among technology companies, Grammarly is moderating the use of these new technologies to solve real-world problems that millions of people face daily.
Over the past years, Grammarly has steadily built one of the most successful startups with the potential for limitless growth. Two billion people worldwide use English to communicate daily, and Grammarly has set out to get their attention to its product.