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This startup waited for 6 years to offer free version – Grammarly success story

THIS STARTUP WAITED FOR 6 YEARS TO OFFER FREE VERSION AND ANOTHER 2 YEARS BEFORE THEY TOOK OUTSIDE FUNDING.

 

THE GRAMMARLY WAY.

 

Start-ups today look for growth and expansion in the least amount of time possible. The most common tactic that everyone use (we can bet!) is by offering the free service to increase their user base. Business gurus believe in making users get the hang of their product or service by cheap – viral offers. Once they get used to it they eventually convert into their paid customers. Many have succeeded with this formula though.
 
1. Grammarly was launched in 2009.
2. The company started under the name of SentenceWorks, which they soon abandoned.
3. This startup waited for 6 years to offer free version for their premium services.
4. They next waited for 2 years before they took any outside funding.
5. Grammarly has 20 million daily active users. (In 2015 there were 1 million users.)
6. The proofreading resources at Grammarly check the content against 250 grammar rules.
7. Grammarly tops YouTube’s TrueView for Action 2018 leaderboard.
 
Achieving 20 million daily active users and $115 million investment led by General Catalyst is a big feat. The Grammarly team placed its focus on one core value – ‘helping people communicate better wherever they write online on a daily basis’.
 
When making a marketing pitch if you drop Artificial Intelligence (AI) and Machine Learning (ML) terms into it, the chances of selling the products increases by many folds. These two terms catch the eyeballs and work as a crowd puller. Grammarly team didn’t give these 2 sellable techie terms much footage, rather they began working from the natural language processing and then towards machine learning.
Customization settings on Grammarly web app
 

How it all started?

 
If you have anything related to writing, communications, school paper, business document or social media post, you know what Grammarly is and we are pretty sure you have used it. Our first experience of Grammarly was with the free Google Chrome browser extension.
 
They started in 2009 with a premium product for Universities. They earned money while improving their product and expanding its consumer market. Before in 2011, when Grammarly decided to go freemium, it was already a successful and profitable with million users.
 

Lessons we learned from Grammarly model

 

1. Transport your product to where your customers are.

What normally happens is, companies build the product and assume users will come to them. The focus is on technical capacities rather than meticulously prepared revenue plan.
 
What Grammarly focused on building a great product and baked into distribution. They didn’t burn their energies in being the best web application. That would have ended up being an extra layer on top of major giants Microsoft Office and Google Docs. It was easy for these giants to up the game and help people by not making them pay $12 a month for Grammarly services. Grammarly smartly introduced itself as a chrome extension. Now users were checking everything they were writing on the internet.

 2. Compound wins over everything

 
Growth Hacking, big launch, fat funding, guerilla marketing they all make good stories. Little do these one time hit stories make a sustainable business. Grammarly used limited online channels, thanks to a small team, for marketing. They made double metrics in customer acquisition and revenue each year. These small incremental wins as they compound over time.
 

3. Develop your business model

 
This we have established earlier in this article. Many SaaS companies in their intital phase, focus on selling to other startups to spread the word and drive growth. They later move to upmarket for revenue and bigger contracts.
In total contrast, first sold its premium product, improvise it parallelly and then launched the freemium model to the public.
 

Moral of the story

 
With a self-funded product, you know that you don’t surplus funds to invest in. You ought to sign up paying customers as soon as possible to avoid burning out.
The management worked smartly. This startup waited for 6 years to offer free version of their premium services, a perfect strategy to make a sale first, be sustainable and then grow gradually.
PS: Grammarly app is also available for your smartphones. You can download the app from the store.
PSS: We wrote this complete blog on Grammarly.
How dependent you are on Grammarly?
 

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