Grammarly — AI writing tool make a billion-dollar
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Grammarly, an AI writing tool, is definitely capturing all of us regardless of our sex, age, occupation, background. As long as you want to write in English, the student uses it to modify research papers, the migrant workers use it to write emails, the internet users use it to check grammar and post.
For a long time, Grammarly has been quietly installed in the free Chrome browser extension. Whenever you want to write in English, it will automatically pop up to help you check your words and grammar.
But how many people may not think of such small functions has successfully transformed from English words and sentences into a huge business empire. Look at the chart, Grammarly's valuation reached 13 billion US dollars.
Grammarly’s business model is the simplest. Open Grammarly’s website, there is no product recommendation, just English text with a check guide. Let AI help you correct spelling mistakes and adjust your grammatical errors online, punctuation checking for more advanced plagiarism checking and writing styles.
Grammarly supports various forms of devices such as browser extensions, web applications, mobile, and desktop applications. After this product is embedded, it will automatically correct your mistakes by providing appropriate vocabulary, phrases and etc. when you use daily software related to text such as Microsoft Office, Messenger, WhatsApp, Gmail and etc.,
It is a very simple product. As long as you just want to use the basic service, it is FOC. A free version includes basic spelling and grammar checking. But, of course, you want all premium features, you have to pay USD 11.66 monthly. As for Enterprise, it costs USD12.50 monthly. The so-called freemium refers to the long-term provision of advanced features and functions. The paid version includes the words suggestions, plagiarism detection, intonation suggestions, and more advanced level vocabulary.
Although it sounds like this profit model is very simple, but with a huge user base, Grammarly has never worried about its profit. Now, on average, 30 million individual users and 30,000 team users worldwide are using Grammarly’s writing assistant service every day. Grammarly’s daily active users reached 30 million. A huge number of users are using this service and generating stable positive cash flow to this corporation.
Grammarly was founded by Ukrainian persons, which are Max Lytvyn and Alex Shevchenko. Both of them met during their studies at the International Christian University in Kyiv, Ukraine in the late 1990s, studying marketing and economics. They found that many non-native English students often get plagiarized when writing their research papers. So, they decided to develop a program for those students. Their first product was MyDropbox which is to help students check the plagiarism of their academic papers. All of in sudden, the software/program became very popular around Europe shortly and expanded to 800 universities in the world. But both of them came out with an idea to make English writing tools to solve those students' problems because those students lack a strong English foundation. In 2008, both of them sold MyDropbox to an American company. Dmytro Lider and both of them started to develop a new English-assistant tool, called Grammarly.
The Grammarly marketing plan was very clear, starting with the university to sell products, and quickly realize a profit. Then, 3 of them actively collected user feedback on the product side to continuously improve the product, such as adding ratings for the appropriate words generated by the AI algorithm to improve the service.
Before 2011, Grammarly’s users were almost all college students. After the product keep improving, Grammarly quickly became popular in universities and achieved a handsome profit within a year. After 3 years of establishment, Grammarly’s revenue has reached USD 10 million.
In 2012, Grammarly began to transform from a university market to a consumer market, including editors, journalists, bloggers, sales staff, governments, writers, email marketers, and other user backgrounds. Grammarly took new publicity channels such as Twitter, Facebook, and other social media by providing a 7-day free trial campaign.
In order to make the user experience more direct and simple, Grammarly launched a plug-in for Microsoft Office, browser, and other platforms too. In the next few years, the subscription volume of Grammarly individual users showed explosive growth, and quickly took 80% of the total revenue.
In 2017, Grammarly has stepped into a broader market and began to raise funds from the market for the first time. The reason behind this was that the competitors such as Microsoft and Google have also begun to develop similar products in the field of AI writing assistants. It is very necessary for Grammarly to raise more funds to provide better service and products to the users.
In 2021, Grammarly continues to increase the scale of algorithms, to provide many functions. For example, the AI tone detection automatically generated writing trend reports, business writing suggestions, etc. Recently, Grammarly has also established a cooperative relationship with Samsung to integrate this service directly on the phone keyboard, and users do not even need to install the applications.
In all kinds of startups, what Grammarly does not seem to be that exciting. But Grammarly focuses to solve the small problems daily which may be what users really need.
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