Grammarly's 90 million ARR story!

Product Management, UX, Startups, and more — freshly curated by Zeda.io

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Jan 02, 2023

Hello, all you product-loving folks! 🥰

Welcome to this week's edition of Product Café, your weekly cup of coffee for everything product management, startups, and more. ☕

Comic of the week 💬

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Onto some incredible things in 2023! Happy New Year! 🎊

Grammarly, a tool I thought I didn’t need

When I started my writing journey in 2016, I was like every novice writer out there, trying to use all these fancy words, making most of my sentences look straight out of a thesaurus. Let’s just say it was a time I thought writing tools ain’t got nothin’ on me! Boy, was I wrong. Once I realized its power, there was no going back. I would even use it to update my Facebook status (Cool kids updated Facebook statuses back then ok).

Grammarly was the name everyone would run to whenever they had to put up a few sentences on the internet, and with more than 30 million daily active users, it still is.

Image source: grammarly.com

Here’s Grammarly’s success story!

1. Backward monetization

Most people I know use Grammarly’s free version which is a Chrome extension that helps detect major spelling mistakes and basic sentence restructuring. The paid version gives access to grammar and plagiarism checks, as well as contextual advice to improve your writing. What’s interesting is that, unlike most companies, Grammarly didn’t begin as a freemium business. It actually monetized backward. When co-founders Max Lytvyn, Alex Shevchenko, and Dmytro Lider first started Grammarly, they focused on universities and colleges as they knew if anybody cared about plagiarism and better writing software, it would be them.

They knew real value-added feedback would come from the field of academia, so with the feedback from universities, they improved the core product before expanding into the consumer market. By the time Grammarly transitioned to a freemium product, it was already profitable with millions of users and had the capacity to fund a freemium plan to drive even more new user acquisition.

2. Positioning

A lot of companies fall prey to the “build it and they will come” trap. They might end up building amazing tech and just hope that revenue will naturally flow. This is where Grammarly did it differently. For instance, imagine Grammarly had stuck to building the best grammar-checking web application out there and Microsoft or Google, OG companies that people would much rather trust also built similar or slightly better grammar-checking apps. Who do you think people would end up shelling out the $12.99 every month to?

But Grammarly won when they positioned themselves as an everyday necessity by building free Chrome extensions. This multiplied the number of ways people could use the product. As a Chrome extension, Grammarly followed its customers everywhere they went on the web—from sending work emails, writing a book in Google Docs, commenting on Reddit, or tweeting. When Grammarly was readily and easily available wherever their customers went, they started seeing it as a necessity and an absolute must-have than something they would use only once or twice a week.

3. Hitting it one channel at a time

Since Grammarly started out small, they didn’t have the luxury to invest in every social media channel out there. Instead, they focused on building out Facebook as the main hub for their marketing outreach.

After they experimented with different types of content forms text to images, they took their learnings and implemented that into the next channel: Twitter.

Source: https://producthabits.com/how-grammarly-quietly-grew-its-way-to-7-million-daily-users/

Grammarly’s social media manager explains that “[Early on,] one of the first steps we took was to compare the channels that already existed and decide on the one that would be the best investment of time and resources.”

In other news…Instagram’s Notes a competitor to Twitter Circle?

Other than images and videos that Instagram is known for, IG released a new feature called Notes which allows you to update your friends using just text and emojis. Meta had considered turning this into a Twitter competitor against their Twitter Circle feature which allowed users to hand-pick people who can read their posts. With Instagram’s new feature, users can leave notes by going to the top of their inbox, then selecting the followers they follow back (aka mutuals) or others from their existing “Close Friends” list. They’ll then type out the note using 60 characters of just text or emojis. The note will appear at the top of their friends’ inboxes for 24 hours and replies will arrive as DMs.

Meta had initially considered making Notes a more direct Twitter competitor. The NYT said Meta thought about giving Notes its own feed in the Instagram app or even making it its own app. However, after months of testing, the company has decided to launch the product as it is, at least for now.

Source: https://techcrunch.com/2022/12/17/this-week-in-apps-ai-art-apps-top-the-charts-instagram-adds-text-only-notes-alternative-app-stores-in-eu/

What’s brewing on Zeda.io’s side? ☕

From new product launches to major milestones, 2022 has been a year to remember at Zeda.io. Here’s a look back at all that we’ve achieved! 💜

Click on the image below to read the full post.

That’s all folks! Have something you want to share? Put them in the comments below and we’ll get back to you soon.

See you again next week! 🥂

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