How Ukrainians created one of the most successful companies in Silicon Valley

In the Embarcadero business center, in the heart of San Francisco, is the headquarters of Grammarly, founded by three Ukrainians. It is one of the fastest growing companies in Silicon Valley. Now its product has more than 2 billion potential consumers.

One of the founders is former Kiev resident Alex Shevchenko. Grammarly is the second company they created together with Maxim Litvin. The first was founded when both were still studying in Kyiv, he says Voice of America.

“We saw a lot of plagiarism and wanted to help teachers and other students who wrote their papers honestly solve this problem,” says Alex.

The founders of Grammarly met during a joint study at the International Christian University, says Ain.ua. It was one of the first universities in Ukraine, where instruction was conducted entirely in English, and the teachers were Native Americans. It was during her studies that Shevchenko and Litvin came up with the idea of ​​the first startup - the verification of student texts for plagiarism.

Trying the pen - MyDropbox

Now Grammarly uses complex algorithms and machine learning, giving the authors of various texts billions of recommendations per month, writes Vc.ru. But in 2008, when the service was just launched, the developers tried to create a functional product with the limited resources that they had.

Service founders Alexey Shevchenko and Maxim Litvin focused on two main aspects.

• First, they decided to work in an area with which they already knew and where they could quickly find customers willing to pay for the product.
• Secondly, they used customer feedback and revenue to improve the product.

In 2004, Alexey Shevchenko went to study in Toronto for a master's program. Already there, he created a service called My Dropbox. The company then consisted of three people - him, Maxim Litvin and the system administrator. Later, the company expanded - in Ukraine, 10-15 people were already working on the project, while 5-6 remained in Toronto.

My Dropbox checked essays on plagiarism and immediately attracted the attention of many world universities - they were willing to pay for such a service. By 2007, 800 universities and about 2 million students already used the product, and today 95% of American universities use similar services. At 2007, the founders decided to sell the project to Blackboard, which at that time was the world leader among educational platforms. Alexey does not name the amount of the transaction, but according to him, it was relatively small.

Grammarly Birth

One of the conditions for Blackboard when buying a program was that Maxim Litvin would work in the company for two years to ensure full integration of the two systems, and the second project’s fooder at this time would not be involved in a business similar in concept. On the day when these two years came to an end, Maxim collected his things, returned from Washington to Toronto, and within a few days his friends founded a new project - Grammarly. It was originally planned that this will also be technology for universities, which will help teach students the English language.

Soon, friends saw that sales were slow, and universities could decide on purchasing a program for several years. Therefore, the founders of Grammarly decided to sell the program directly to the end user. At the same time, Maxim and Alexey decided to change the target audience and service concept and sell it not only to those who learn English, but to everyone who uses it in everyday life.

To create the company, the founders of Grammarly used the money inherited from the sale of the previous project - they decided not to attract outside investors. “We wanted to focus on solving the problem, not on finding money and engaging an investor,” Shevchenko said.

Alex and Maxim left for the USA, and Dmitry Leader joined their company. While struggling with plagiarism, we saw an even more serious problem.

“We researched why people resort to plagiarism, and one of the main reasons was the difficulty of communication. We decided to work on this fundamental challenge,” admits Dmitry.

In addition, the founders of the company were forced to communicate daily and conduct business in a non-native language.

“We made mistakes, and despite the fact that we have been living in North America for quite a long time, these mistakes still remain. We set ourselves the task of solving this problem using technology,” says Alex.

“We approached the work in several stages. First we made a product that helped with the basic mechanics of the language, correcting spelling and grammatical errors, then moved on to other aspects of communication, clarity of presentation, efficiency. Now, for example, Grammarly can help you get rid of cumbersome, unnecessary or potentially offensive phrases in the text,” says Dmitry.

Today, the text verification system, based on artificial intelligence, exists in paid and free versions. It is used not only by those for whom English is non-native. Even the company's executive director, who at the time of joining the team was a venture capital investor, was initially looking for someone who could edit his texts.

“I was looking for someone who could check my email, notes, etc., and saw the product Grammarly. It was seven years ago, I was simply amazed. I contacted customers to understand what they were doing. It so happened that I first spent several months consulting with them and realized that not only was the product great, but the team was great,” says Brad Hoover, CEO of Grammarly.

This year, Grammarly received funding in 110 of millions of dollars from a number of companies led by General Catalyst.

“This is a famous company that has helped create a huge number of successful technology projects. And besides money, they give us a lot to scale the company,” says Alex.

“With this capital, we will be able to accelerate growth in terms of product improvements, the number of platforms based on this company, as well as feedback,” Hoover said.

Success story in numbers

Grammarly in 2008-2009: The product was a simple WYSIWYG editor, in which you could copy and paste text.

2010: As food growth was the number one goal, it was decided to focus on education. By this time, the audience for the product was over 150 thousands of registered users.

2011: Grammarly continued to develop in the market of educational services. By 2011, the number of registered users amounted to 300 thousands of students and more than 250 universities.

At this stage, the product was still a simple web editor. But unlike the spelling in Microsoft Word, which emphasized only obvious spelling and grammatical errors, Grammarly considered everything from contextual spelling to text style.

The main limitation of product development was just the same technical complexity. Creating an algorithm that would be smart enough to understand English takes a lot of time and money. However, Grammarly found a way out: ask the users themselves to leave feedback. The constant influx of feedback and suggestions helped the service to develop and become better, while its competitors, for example, Microsoft Word, stood still.

Three years after the foundation, Grammarly earned $ 10 million per year. The goal was to focus on the problem and its solution, and not on attracting investment.

In the first variant of the tariff plan, Grammarly offered a week free trial period, and for the paid version $ 11,99 per month. Over the next few years, individual subscriptions began to overtake corporate, reaching 80% of the company's total revenue.

2012: As the audience expanded, Grammarly began to invest in social networks like Facebook and Twitter.

2013: The company has adapted its landing page for a wider market. The title read “The best spell checking service in the world,” and in the description, “We were rated by three million people” (and not just students). Grammarly has increased the number of followers on Facebook to one million.

2014: Grammarly launched plug-ins for MS Office, allowing users to use their spell-checking technologies directly in Word and Outlook.

Instead of attracting users to the product, the team focused on ensuring that the service automatically checks for texts where it is convenient for users. Soon the team made a plugin for Microsoft Word and Outlook. As a result, users could use Grammarly right where the text was written.

This strategy worked. By 2013, the company's revenue grew, and the number of registered users reached three million. The launch of the free extension for Google Chrome and the transition to the freemium model served as the next step in product growth.

2015: After switching to freemium, the number of users of the service began to grow exponentially. Landing made it easy to install the Chrome extension by clicking "Get Grammarly for Free".

From a strategic point of view, building a Freemium business around an expansion for Chrome had two important consequences.

• First, by making its product accessible and convenient to use, Grammarly left behind such potential competitors as Microsoft Word and Google Docs.
• Secondly, the transition to the premium version of the product has become more logical. Developing the habit of using the free product and its functions, Grammarly easily transferred users to the premium version.

How the service works

Grammarly is a paid web service that allows you to create texts according to all the rules of the English language. The program is able to track real-time grammatical and syntactic errors, as well as improperly constructed speech patterns. In addition, the program explains why it is better not to use this turnover and recommends a more correct option. Grammarly products are very simple to use: you only need to copy any passage of English text into the online form on the website or install a plugin for your browser, after which the spell checker will work in Gmail, Facebook and other services. The algorithm will highlight potential errors in the text and suggest corrections so that users can make an informed choice - whether to correct the error and how.

As for the rules of the language, Grammarly is as universal as possible. The rules that the service uses are universal both for the English language and for its American and other dialects. Its creators preferred not to touch controversial moments and slang - Shevchenko and Litvin do not want Grammarly to be perceived as a service for Grammar-Nazi. For example, if the user writes gonna instead of going to, the program will not correct its text, but will only prompt that a comma could be missing.

“In the future, we want to learn how to predict the reaction of interlocutors, the audience’s reaction to messages, and propose appropriate changes,” says Dmitry.

From Kiev to San Francisco

The company has three offices - in San Francisco, New York and Kyiv. Alex Shevchenko says that maintaining an office in San Francisco, although expensive, is necessary.

“It's something in the air and water that inspires people to do new things, to build new products. This is access to the people who built and scaled companies like Google and Facebook. These people walk the same streets as us. We communicate with them, these are our mentors.”

But the largest office of the company is in Kiev.

“Kyiv was the first and remains the largest of our offices. Almost all business functions are represented here - of course, the Kiev team greatly influences the formation of the product and the trajectory of the company,” says Dmitry.

In Kiev, Grammarly holds seminars, conferences on artificial intelligence, advises new start-ups. They say that they are not afraid of competition, but are interested in improving the ecosystem of the IT sphere. And the employees of the company want Kiev to become a real center of innovation in the world.

The main lessons that can be taken from Grammarly: the product must go where its users and investments are certainly a cool resource, but not an end in itself.

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