Grammarly — An Unconventional Thought Leader in Start-up Opera

A revolutionary idea need not necessarily bloom into a beautiful flower in the first go. This was the story of co-founders Alex Shevchenko and Max Lytvyn when they started yet another company in 2008 after having not succeeded in creating a revolution with their first start-up. I strongly believe that Grammarly would not have existed had the founders not tasted failure with their first start-up “My Dropbox” and not stumbled upon learnings of how users approach writing in English, why users are sensitive to anti-plagiarism, how difficult it is to scale the user base, and how developing B2B client relationship with universities and educational institutions will be helpful to fund themselves without depending on VC investors and their tantrums.

The founders learned several valuable lessons from their failures, including the importance of catering to a large target market, integrating distribution and marketing with product development, having a sustainable business model, and evolving the business and technology for growth and survival in a competitive landscape. These learnings were critical for the growth of their product, Grammarly, which now boasts 20 million daily active users.

Realizing that addressing only the issue of plagiarism checks would limit their target audience to researchers, writers, and other serious educators, the founders went back to first principles: identifying the actual problem the user is trying to solve and addressing all pain points during the user journey. Soon, they discovered that users' desire to avoid plagiarism stems from their fundamental aspiration to write an original, engaging piece that showcases their mastery of the language and is accessible to their target audience. This led the founders to understand that every individual has a fundamental desire to write correctly and effectively for their readers, placing this need at the intersection of basic and esteem to self-actualization needs in Maslow's hierarchy. This was a eureka moment for them, as they realized that they could assist anyone who aspires to write in English to deliver a message that is audience-focused and contextualized per situation, providing both social and personal satisfaction for the writer and audience alike. Their target market was more than two billion English writers. This experience teaches us that we must understand the genesis of a problem in order to find the target market, rather than simply bucketing users based on their stated or visible problems.

During that time there were several competitors such as MS word spell check, Outlook spell check, and other standalone spell check apps/software. But Grammarly was very different from all of them as it holistically looked at the pain points of the user while he/she is writing rather than looking at spell check or grammar check as a problem to solve. The objective of Grammarly was to ensure that the writer not only writes well but also learns during the process, unlike all others. It was following the timeless quote — “Give man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” Grammarly is guiding and developing great independent writers.

Grammarly focused not only on spell checks but also provided spelling suggestions depending on the context. Its focus on explaining correct grammar usage, besides prompting changes and giving ratings for correctness, clarity, engagement, and delivery, helped writers make audience-centric pieces. Its NLP and machine learning team had made the perfect cocktail that helped suggest different changes to text depending on the user's audience, occasion, and context, such as email, storytelling, research paper, etc.

The founders also understood one critical piece of user behavior which the incumbents left unaddressed. They ensured high user acquisition and retention by making Grammarly an add-on to already widely-used writing platforms, rather than asking users to use Grammarly on their web-based platform. They created browser extensions for Chrome, Safari, and Mozilla, as well as Outlook and word plugins, and a Grammarly mobile keypad, in addition to its traditional web-based platform, to ensure that writers are assisted by Grammarly at every step of their writing in daily life. They made Grammarly a habit for their users. The founders were continuously focused on making access, utility, and efficiency key. With its strong machine learning team and sole focus on lowering latency while providing these facilities at the point of use for consumers, they became the favored choice for anyone who cared about writing understandable and audience-centric texts. Suddenly, Grammarly was for everyone, everywhere, and for every purpose.

As a way forward, to sustain this hyper-growth and endure this enviable success, I want to look at other successful platforms for learning to adopt into Grammarly. When I look at Amazon, which started by selling books online and now sells everything consumers want in the most convenient way possible, I think Grammarly has a great opportunity to do the same for every English writer in the world. Through machine learning, Grammarly can mimic the style of any famous writer, poet, or speechwriter to help the user adapt and suggest styles for their texts, and automatically generate poems, prose, or speeches depending on a few keywords and contexts provided by the user.

Grammarly could expand into many languages and can envelop many different contextual scenarios in its suggestions. Taking a leaf from Google’s autosuggestion, Grammarly could very conveniently integrate autosuggestion to make writing quick and efficient. Other low hanging fruits like integrating voice to text input from English and other popular languages might address a wide audience like storytellers, CEOs or handicaps. Taking a leaf from Google translate and other standalone apps, Grammarly could leverage its prowess of its strong NLP and machine learning team to solve the cross-language translation using Neural machine translation (NMT) to suggest translations in a correct grammatical and contextual sense, which is still a challenge today. With audio inputs and interactions on platforms like Alexa, Google Home and Siri, Grammarly could become the ubiquitous language assistant for all modes of inputs for different kinds of languages and devices. Some are low hanging fruits, and some are moon-shot ideas. But all these are meant to make the user experience a great one- the secret to Grammarly’s future sustainable success.

However, I would like to draw attention to one important opportunity on which Grammarly can focus to strengthen its roots even further among users. Grammarly's vision is to help the user write better while making him/her more knowledgeable and confident in the process. It is as much a writing assisting platform as it is a language teaching/training platform. Duolingo, a revolutionary app, has made waves by being one of the best platforms to learn a foreign language for a specific purpose or context, such as travel, weddings, or negotiations. I believe that with its 500 million user base addressing more than 23 languages, Duolingo might be able to create a similar platform to address everything that Grammarly is doing today. Duolingo also has a great NLP and machine learning team and a good understanding of language NLP, like Grammarly. Duolingo also has more appeal among non-native English speakers compared to Grammarly and may be a default choice among its huge consumer base if it launches a platform like this.

So, as a defensive strategy and to ensure growth, Grammarly could focus on creating a similar direct learning-by-doing platform like Duolingo for English learners and become their preferred choice before Duolingo moves fast and obliterates Grammarly. It is the enveloping strategy that Grammarly should follow, keeping the English language in focus at first – Grammarly’s strength. I am not suggesting all languages now because it takes a lot of money and effort to create a fundamentally savvy product like Grammarly in one language, and hence Duolingo may not want to compete on all fronts except English, which is the most preferred written language. So, Grammarly should strengthen its fort in English by creating a learning and teaching platform for English-interested users through not only assisting them in writing but also training them to speak and write depending on different social contexts and purposes like Duolingo. I am not suggesting copying Duolingo’s solution but to address the pain point Duolingo is addressing for its English learning audience – a user overlap and an opportunity for Grammarly.

Monetization is key to every sustainable business. Grammarly was one of the very few startups that focused on monetizing first to remain sustainable by selling their platform to educational institutions and universities and gaining a trusted audience. Rather than focusing on gathering just free users, they focused on paying users. Today's times are a testament to many startups that have failed to justify their pre-IPO valuations and VC expectations, based solely on user numbers. The frenzy seems to have cooled off now to some extent. However, Grammarly focused on revenue sustainability from day one. Though their serious users are researchers, educators, and students, they also collected relevant user data, which helped them enhance their product and algorithm's learning speed. Recently, they went into a freemium model, which helped them increase their user base drastically while remaining profitable. This helped them become independent of VCs and other investors who, in many cases, pressure entrepreneurs to increase valuations through synthetic methods rather than focusing on creating a user-centric product.

Grammarly's unique marketing strategies, which involved explaining product features through Facebook posts and search terms, set it apart from other startups. The ads helped users see how to use the features to improve their writing and facilitated adoption. With an easy onboarding process, Grammarly ensured quick user engagement with just a few clicks.

Today's conventional product manager's obsession with growth hacks—to imagine creating 10x growth with 1x investment—was not what the Grammarly team believed in. Today, it seems like everyone wants to win a million-dollar lottery, and every product manager is high on opium. It’s evident when these are the kind of questions we hear regularly in hiring interviews and VC pitches too. It’s a shame and the plight of today's short-sighted, greedy, and ignorant business techie innovators. The Grammarly team, with its experienced founders and clear vision, knew how to sustainably build a product along with advertising to get feedback and create a product for their users. The focus was on getting meaningful consumers and developing a better product, and not putting growth on steroids. They only recently took funding from General Catalyst while being profitable—a testimony that they are looking for patient capital and great mentors rather than just money.

I believe that going forward, Grammarly should focus on monetizing from corporations, universities, and individual users, not only in developed countries but also in emerging and developing countries. The focus should be on creating affordable base fees for casual users. Monthly user fees of $29.99 for an emerging economy user are completely misplaced. Emerging economies, with a population of 6 billion people aspiring to speak and write English, represent the future market that Grammarly should focus on. The fast-growing businesses and professionals in developing economies who strive to present themselves well to their global counterparts are more likely to pay for language services, but affordability and accessibility are crucial. Grammarly should learn from McDonald's and Amazon, which customize their products and prices for different geographical locations. Grammarly should focus on capturing these markets with differentiated strategies. An active sales force is important in emerging and developing economies since the way business deals are done here is different from the west. Personal interactions matter in business dealings in developing economies, and an active sales team would be key to gaining those B2B relationships.

Taking a leaf from the pricing books of Amazon AWS, Grammarly should also consider feature-based pricing (a la carte). Amazon AWS offers different pricing for various feature bundles and provides pay-as-you-use pricing models. This has led to early and wide adoption of AWS services across SMEs and big firms alike. With its plethora of existing features and expected feature developments, Grammarly should look at these methods to cater to new growth users in emerging economies and free users in other developed countries.

From the marketing front, both traditional TV medium along with avenues such as Netflix and Amazon Prime should be explored. Besides the digital medium such as Facebook, Google, and YouTube ads, which have been very helpful, Grammarly needs to focus on building a reliable brand and raising awareness among audiences of all age groups and varied international geographies. Therefore, these avenues are important for reach. Through direct engagement in BTL activities like Microsoft CEO is doing these days, Grammarly needs to make firms, organizations, and its business leaders feel like partners to ensure engagement and active adoption of Grammarly across businesses and institutions. Like Microsoft Office, they should try to become the default plugin for writing in all offices and homes.

Grammarly is not only a tech innovator but also a business model innovator. To continue growing at the exorbitant pace, it must capture the low hanging opportunities in sustainable ways and attempt some moon shots in emerging economies. Through product envelopment and user-centricity, Grammarly can become the next Google or Amazon of language communication.

References:

"Grammarly's Alex Shevchenko and Max Lytvyn on the lessons learned from failure," TechCrunch, 18 February 2021. Available: https://techcrunch.com/2021/02/18/grammarlys-alex-shevchenko-and-max-lytvyn-on-the-lessons-learned-from-failure/

"How Grammarly Quietly Grew Its Way To 6.9 Million Daily Users In 9 Years," Forbes, 7 February 2018. Available: https://www.forbes.com/sites/ryanrobinson/2018/02/07/how-grammarly-grew-to-6-9-million-daily-users-in-9-years/?sh=6a0d6f035b9a

"How Grammarly Built a Business Around Grammar and Writing," Harvard Business Review, 12 November 2019. Available: https://hbr.org/2019/11/how-grammarly-built-a-business-around-grammar-and-writing

"Grammarly Review 2021: Is This Grammar Checker Worth It?" The Digital Project Manager, 2 March 2021. Available: https://thedigitalprojectmanager.com/grammarly-review/

"How Grammarly turned grammar into growth," VentureBeat, 25 January 2018. Available: https://venturebeat.com/2018/01/25/how-grammarly-turned-grammar-into-growth/

"Grammarly: From grammar checker to a digital writing assistant," ZDNet, 13 August 2019. Available: https://www.zdnet.com/article/grammarly-from-grammar-checker-to-a-digital-writing-assistant/

"How to Write Engaging Content That Readers Will Love," Grammarly Blog, 24 February 2021. Available: https://www.grammarly.com/blog/how-to-write-engaging-content/