How Grammarly’s Evolution from B2C to B2B Propelled It to a $13B Valuation

when we looked at the type of content that users were running through our grammar checking engine we saw that about 50% of it was of non-academic nature that's all despite the fact that the whole website and product is marketing screaming at the top of its lungs we are for students and students only if we wanted to help knowledge workers everywhere they write and a lot of their writing happen inside of email clients and G dos and project management tool Etc we had to find a way to be wherever it is that they were writing and seamlessly integrate in their native workflows we zeroed in on this idea of building a browser extension as we were prototyping the experience with so novel so revolutionary that we're like it would be a crime to pay wall that experience welcome to subversive a podcast dedicated to sharing stories from the best consumer subscription apps in the world we'll bring you lessons for

how to grow your consumer subscription business including insights and inflection points that led to exponential growth from leaders at category defining companies and Innovative startups let's get into the show my guest today is Yuri timman who joined grammarly in 2012 as the company's first marketing hire and left in 2020 AS Global head of marketing and growth in this episode I talked to Yuri about grammarly's Evolution from a consumer web app focused on students to a prosumer tool targeting knowledge workers and ultimately into an Enterprise SAS platform with the launch of grammarly business in 2018 along the way we discuss how grammarly's product business model and marketing strategy needed to evolve in order to capture the demand and meet the needs of each of these three customer segments all right thank you Yuri timman for coming on the subversive podcast Yuri we've known each other for a couple years now you've been

kind enough to join my course a couple times as a guest speaker but excited to talk to you today in podcast form about the story of grammarly which is a company that used spent gosh almost a decade at all the way back to 2012 um but before we jump straight in let's just get a little bit more background on you and what brought you to grammarly early in the company's history yeah thanks for having me Phil and congrats on on launching the Pod it's a it's it's a big deal and I've seen I I know you've already had uh quite a few uh growth and go to market rock stars onest guests so yeah um happy to see happy to see you hitting your stride so I I I'm what I would call an accidental uh growth slm marketing practitioner um I uh you know come from the world of Finance where I spent a couple of years cut cutting my teeth in investment vacing and private Equity then the market you know took a big fat

you know what in 08 I was like oh I'm not really passionate about this uh what else is out there so I did a very hard pivot into all things internet digital Tech why honestly this is going to sound funny but uh I was just happy not to have to wear a suit to work me too me too so so um and then yeah I cut my tee agency side doing Performance Marketing because it was fairly Quant and as a you know former kind of Finance junkie it was a nice nice little bridge and then kind of went in house and I felt like you know getting closer to what I'm meant to be doing I suppose and then the grammarly opport Unity came by honestly I was this close to not taking it uh because I was I was at a point in my career where I started doing a little bit of Consulting specifically around like sem and just paid marketing I was working on a startup with a buddy of mine that I was like oh maybe I'm ready to leave the the 9 to5 World well little

that I know that it was more like a like a like a 7 to7 world but or or or a seven or a seven to9 even world but um um you know and I thought that maybe I'll do some Consulting work on the startup with a buddy of mine and then the grammarly opportunity just came out of nowhere and um initially I brought them on as a client which then gave kind of birth to this idea of always try before you buy yeah worked with them for three months in a Consulting project and something just clicked and I just felt like wow I've never been never been around people this inspiring this intellectually you know rigorous and agile this humble I'm like something feels like I have to I have to latch on to this and give it a go I'd be lying if I said that I believed in the vision or the product honestly it was basically like a it was like a glorified spell checker at the time they know they know that this is the case like I I speak

openly about it um but yeah at the time it was really the people I'm like I don't care what they're building I don't care what kind of trinkets they're they're producing like I want to work with these people and then of course like we realize that gram is much more or has the potential to be much more than a glorified uh spell checker and you know in a way the rest is history

you joined in 2012 you're the first marketing hire a couple missteps aside early on you get the marketing team rolling and and you are are focused on what was then a web app for students so talk to me a little bit about what was the initial grammarly product and value prop for these student users and how are you as the first marketing hire going about acquiring these students if you go to Arch .org right and you look at grammarly you know in 2012 you look at the website if I'm not mistaken the headline would have been the world's most accurate grammar checker okay with like a logo with like a like a like a it was like a a microscope but instead of that the thing you look into it was like a big old pencil and then the the the sub copy was like you know the best grammar checker for students get better grades Etc so we were very clear about our ICT right and that was students and students only and

it was a web- based app so it was naturally targeting students for high stakes writing right so term papers dissertations essays more more broadly and it was again a web-based paid application with a credit card gated free trial a 7-Day credit card gated free trial Auto charge on they eight I think we also at the time we also had a Microsoft Office added but again and it was fairly popular but again it was for students because that's who was using Microsoft Word largely I mean professionals were as well but we that was a bit of a blind spot at the time how were we selling it was a ton of demand capture because there was already a lot of uh kind of trans actional search query volume for things like grammar checker plagiarism Checker essay Checker online proof reader check my paper check my essay check my you know Etc so all all all of those keywords we were going after and we were we were

good at converting them and we had pretty high price points and pretty decent ltvs so we can continue to feed our Performance Marketing engine we were doing a little bit of display a little bit of affiliate but I would say it was like probably 80 80% sem uh sem SEO because we were basically competitive on the same queries uh in in inm and SEO which which kind of those transactional product queries so you come in and it sounds like you already had the sem and to some extent the SEO flywheel running which makes sense because you have this very clearly defined use case for students they're typing in very targeted queries in Google and other search engines to find a product like grammarly but then you use the Playbook that you developed working in an agency and you expand across display and some other AD channels I imagine you used a number of the typical metrics for evaluating these channels and doubling down on the ones

that were working best I also know that one of the things you did was try to expand a little bit more Beyond paid advertising into organic channels using programmatic and editorial SEO to try to lower Blended CAC what were some of the

early programmatic efforts in SEO in order to capture some of these longer tale search queries as an as in a lot of different growth subdisciplines uh the framework of using kind of concentric circles uh can come in handy SEO is no different so you know the very Inner Circle are your high intent transactional queries right like I just mentioned grammar check plagiarism check essay check the next concentric Circle which has a lot more volume as you go out it's usually it's inversely correlated right higher volume lower intent yep um when we went out uh to the next concentric Circle you had a lot of um informational queries like how do you write a resignation letter job offer template uh or a cover letter template right where you knew that people were likely either at the moment performing a writing task or thinking about a writing task that they will need to perform soon but grammarly was only

helpful at the pro was only helpful in the revision and editing phase so those queries that I just alluded to they did not signal that that these people already had a a a a written output to edit right they may have or they may not and so that's why we put them in the next concentric Circle and for that we didn't do programmatic we just had an editorial strategy uh where we actually like wrote stuff we had in-house writers and we had like a roster of freelance writers and we were putting out those articles then when you go to the next concentric Circle you you you you have these like really long tail queries that are also writing related but they you know if it was like fewer than 500 searches a month or something like that I don't remember the exact number we we wouldn't handle them through our editorial strategy instead we handled them through our we had like a portal we got rid of it later because the

conversion rates were abysmal but at we had a portal we called grammarly answers and it was basically like a forum right a moderated forum and we use that to handle a lot of our longtail queries a lot of traffic very low very few conversions and eventually we learn the tough lesson typically especially with um longtail programmatic low longtail low intent programmatic the conversion rates drop at a much steeper rate than the traffic than your traffic volume Grows by if that makes sense so it's the juice isn't worth to squeeze at some point yeah yeah So eventually we we phased out grammarly answers because it was just to too expensive to maintain and very little yield yeah so what I heard there and this resonates from my experience at Quizlet is when you look at the power curve of keywords and SEO queries targeting those keywords you've got the head terms where you've got a huge amount of volume and varying levels

of intent but those are also very very competitive and often times you're going up against larger incumbents to go after those keywords and then as you move into the midtail and the long tail it becomes easier and easier and easier to capture that demand because there's less competition but at some point you go beyond the point where marginal benefit exceeds marginal cost and it's not worth it and if you have a z generated content model like Quizlet then that's a very efficient way of capturing those super longtail queries but in grammarly in grammarly's case it sounded like you have a lot of excess in the midtail with those editorial articles and then there were some programmatic efforts to capture some of the longer taale so at some point though you start to realize that you're getting as many or more queries around things like I want to write my resume or a cover letter or resignation letter like prummer use

cases not student use cases and so as you've explained it to me there were some backof the envelope math that was done and pretty quickly you realized that the market opportunity around knowledge workers might be much larger and more lucrative than the market for

students and so around 2015 there's this pivot you're continuing to serve your student users but you're expanding into the prummer market what did that look like and what about grammarly's brand product and acquisition strategy needed to change in order to go after this prosumer target uh you know the pull from the market was even stronger than just search queries or or the activity we saw in in search queries it was literally you know when we looked at the type of content that users were running through our grammar checking engine we saw that about 50% of it was of non-academic nature uhhuh that's all despite the fact that the whole website and product is marketing screaming at the top of its lungs that we are for students and students only yep yeah and that was a very loud signal that you that we had to be even even even someone as bewildered as us at the time uh uh you know still still got the got the

message today I recall things as sort of like us doing this kind of like having this concerted effort yeah across multiple fronts to take advantage of the knowledge worker opportunity it probably wasn't as smooth in reality but our minds do that to us so so the way I like to remember it okay the way I like to remember it is that we quickly realized that if we're to go after knowledge workers there were a few structural things about the product that we really need to that we really needed to question if not a pend altogether number one knowledge workers write a lot online and and at that time we had statistics that showed you know how much of their write of their writing time they were spending um you know in the browser as opposed to in in um you know other interfaces so so in light of that we knew that if we kept the product simply as a web app we were going to create way too much friction and we were

going to limit ourselves to knowledge workers that had a very high intent y so if we wanted to help knowledge workers everywhere they write and a lot of their writing happen inside of email clients and G dos and project management tools Etc we had to find a way to be wherever it is that they were writing and seamlessly integrate in their kind of native workflows and the last thing is was the business model and we thought to ourselves when when someone has high stakes writing they're willing to jump through a pay wall because this damn project is so darn important to them right they're willing to pay for it but if we're trying to Garner more kind of mass market adoption we're going to be dealing with knowledge workers that do a lot of casual writing and maybe they want to write more efficiently and with greater accuracy but they're not quite sold on on on on purchasing a paid product right

after B and the last thing is that when we started actually seeing how we can bring a u a ubiquitously present product to life and we zeroed in on this idea of of building a browser extension as we were prototyping that the experience was so novel so revolutionary that we're like it would be a crime to pay wall that experience yep and and to try to describe drive that experience to people or even use videos or animated gifs it just wouldn't do justice they simply had to experience it themselves so that all converged onto this into this effort of where we said okay we're gonna build the the the Chrome browser extension we're gonna also build a funnel that is extension first as opposed to you know create an account and pay us we're going to start start with ADD add an extension then create an account then open some kind of writing window you know Gmail or wherever and and and watch the grammarly integration

come to life so we had to build honestly like a first of its kind that kind of funnel like the extension like there were very few extensions at the time and most extensions didn't even have websites they just lived in the Chrome web store to be discovered right or not discovered or not discovered yeah in most cases and so we were definitely in uncharted waters um and then so you know we we also try to figure out okay well at this at that point we were like a 30 a $30 million a year business so there was a lot of Revenue at stake going premium when you're at that scale is is is no trivial uh task we had a lot of conversations around what should be the feature split what do we give away for free what do we pay wall can go more into depth on that if you'd like but for now I'll keep it high level and then as we go with as as we moved forward with this funnel where it was um you know free leading with a free product we

actually ended up doing something pretty wild we basically like AB tested our Legacy flow which is web app pay right away y uh credit card gated AB tested it with extension first leading with a free product paying is optional and we actually had some some um parameters for the experiment where we were willing to Bear you know I think up to like a 10% immediate Revenue dip y I forgot where we came in but there was a revenue dip but we just saw our top of funnel exploding explode yeah and we were like listen if we can even it was some nominal percent of those users we needed to convert over time yeah to more than exceed uh to more than cover that Gap and so that gave us a lot of confidence and we moved forward um and then there is a whole other I'll pause here but then there is a whole other piece about how did we have to evolve our advertising our positioning and messaging to go after knowledge workers

but let me pause here see if you have any questions yeah no that was great so let's briefly recap what you covered on the product and positioning front because there was a lot of great stuff in there and then I think we can move on to how the marketing strategy needed to change but the key components I heard there were number one the core value promise of the product changed before you talked about for students it was get better grades that was literally the best message in Quizlet ever had was get better grades that's what student care about now it becomes get better outcomes in your career yeah that was number one number two was you needed to to pull from Jeffrey Mor's book Crossing to Chasm you needed to build the whole product solution for these prosumers which meant you needed to meet them where they were unlike students who have relatively simple study workflows these prosumers they were in Chrome they were

in Microsoft documents they were in Gmail they were using all sorts of productivity tools and so you did multiple things to meet them where they were it sounds like you built the Chrome web extension that was priority number one but you also built plugins with Microsoft Office Suite of tools and then you didn't talk about this we can get into it if you're interested but you launched a keyboard on mobile which not only provided yet another product touch point but also provided an additional acquisition Channel Through the app stores and then the third thing was you needed to change the business model model because with students you had this free 7-Day trial but then you have to pay to play now with prosumers you pivoted towards a premium business model to give them more of an opportunity to experience your product before paying and so those are three massive changes but it sounds like you were able to

stitch them together obviously it looked cleaner in hindsight than I'm sure it was at the time during the fog of War but like it all comes together you run this AB test you take this leap of faith trusting you can close the gap on the short-term Revenue loss and it sounds like that's what happened but now let's

talk about how the marketing needed to change and specifically you've talked about YouTube as being this really powerful channel for acquiring prosumers so how did you all stumble onto YouTube and and what did those early marketing efforts on YouTube look like in the pre- knowledge worker world we were largely operating in the demand capture Paradigm so we were we were basically really going after users who had a well-defined need and not just that they knew what solution they were looking for to solve that need right maybe they didn't know the brand but they knew that they were looking for for an online grammar checker they weren't looking they weren't still deciding between an an automated online solution and a human proof reader right they've already traveled that Journey on their own and we were just trying to capture that existing Demand with knowledge workers naturally there there were very few

searches uh because you know with with with knowledge workers one thing that we encountered one I guess uh headwind that we encountered is uh knowledge workers thought of grammar check grammar checking or writing more accurately as something as they that they left behind in their school days right and that in the real world in the professional world no one cared how you wrote people had better better things to do right that was a an educational barrier that we had to overcome because our data set otherwise right our data said that you know not only is is is a better writing leads to more effective communication which actually allows you to to to to get to decisions faster to minimize misunderstanding and actually work more effectively as a team but also more personally it was a reflection uh people did judge others based on how they communicate in written form right and so yeah you may not be getting graded

explicitly at work but you are be being graded implicitly in the court of public opinion the Court of public opinion exactly so in general we we knew that we had to move from demand capture to to demand gen and when you move from demand capture to demand generation you start dealing in these mid- funnel channels like meta display and upper funnel channels like you know YouTube podcast YouTube podcast TV you have to practice the craft of Storytelling those are different mediums right A Creative of like the world's most accurate grammar checker that's not what's going to resonate there because these are these people you're not going after audiences that are necessarily in the market for your product so you got to take them on a journey of here's here's a pain that you may have or or if not a pain here's an opportunity that you may have not may not have realized a and prove it right so show

show some supporting evidence some some you know social proof or whatever all the way to Hey There is a way to solve it all the way to and by the way we're best positioned to solve it so when you so so when you're talking about taking the user on that kind of entire uh sort of educational Journey a rather condensed Journey you need the right medium for that you need real estate you need attention span and you need the right medium right and that's where video storytelling became a natural Avenue for us to pursue not to mention that we thought that our product with the way the extension uh integration worked our product was just just lended itself the new browsers has lended itself so naturally so seamlessly to visual storytelling right that we thought that it can like like we can benefit tremendously and then it became a question where do you tell your story in video form right and like YouTube was

the answer meta wasn't doing much video then it was still mostly static ads and even and people you know weren't really and the other thing about YouTube by the way I'm jumping around a little bit was that unlike meta on YouTube you're more likely to catch knowledge workers while they're at work or they're in their kind of professional state of mind right right all right because YouTube is less of a social network and more of a entertainment educational platform we were ba we were betting on the educational piece right where knowledge workers may be there you know listening to podcast right or um you know listening to some kind of a tutorial on on on how to do something in Google ads or whatnot and so we're more likely to get them when they're in the right in the right head space as opposed to try to wind down after work and I think this is such a great lesson on product Channel fit we spend so much time as a

as a group of growth practitioners talking about product Market fit but with product Channel fit if you're off by even a couple degrees the effectiveness of the channel goes way down and so what you said if I heard you correctly was okay with students it was demand capture it was very very clear what they were going to use grammarly for and so a channel like SCM or SEO is really powerful because they're stating their intent through their query and you're just capturing it but as you move to prosumers you first had to convince them that they even had a problem yeah and I remember when I started my first job at Bane one of the things we were told on day one was the number one predictor of success as a Management Consultant was verbal SAT score which is sort of the opposite of what you would expect you would expect maybe math SAT score but the ability to communicate is really important in a professional

setting and so you find YouTube as this medium to long form video channel right longer form than meta video as a medium and it's the perfect way to explain the value of grammarly to this audience of knowledge workers who needed to be convinced why they needed the product in the first place and you adapt your model to premium so that they have time to figure it out so this then brings us to

the second key inflection point which is around 2018 you've now been selling into individual prosumers for several years but you take one step further down the B2B path with the launch of grammarly business and you start selling into Enterprises to entire teams of professionals and so I'm sure that was a very big and daunting step what motivated the initial decision to move into Enterprise SAS yeah I mean look similar to the move from students to knowledge workers a lot of it was pull from the market and I would argue that we were probably late on both of those transitions probably should have gone after after knowledge workers earlier probably should have gone you know after B2B earlier or maybe when going after knowledge worker already or after knowledge workers already do it through kind of a B2B lens you know build in collaboration tools building some of these sort of like team-based

features uh right off the bat but again hindsight right it's 2020 I mean again there was a lot of Market pool we had we had our subscribers professionals writing to us uh more and more frequently saying Hey how do I buy this for my team we literally we literally did not offer a way to buy to even buy like multiple seats also like request like hey I'm switching jobs how do I can I move this to a different email address can I change the email on my account so there was there was a lot of this inbound um and we even had cold inbound where um I don't know managers department heads would write to us saying hey I want to buy this for my team but I couldn't find any guidance on the website right So eventually we're like okay we got to do this and I think what we did at the time not I think I know what we did and it was probably a bit shortsighted is we said there's all this inbound demand let's just let's just

give people the ability to do what they're asking for and nothing more and so the first version of grammarly business was basically the ability to purchase multiple licenses very basic admin controls uh you know add add seats remove seats some really basic gimmicky reporting for the admin right here's who's using the tool the extent to which they're using here's who's Idol Etc took that to Market and and just expected an absolute explosion in business uhuh explosion in business we thought that the people who were vocal about wanting bulk licensing we thought that it was the tip of the iceberg and that uh you know just just open the floodgates uh we were wrong and we learned that that the success that we had resonate in terms of we we figured out our positioning and what resonated with knowledge workers right namely speaking to the real world outcomes like they cared about you know peer recognition you know more likely to

get a promotion they cared about all that stuff it spoke to their ego and we had some proof points for that as well not easy to develop but we have some right we thought that it was just it would just seamlessly translated B2B but guess what when you're a manager making a decision those value props that are very um you know individual team members specific they didn't really resonate and and when we tried like converting them to team focused ones where we would just say like okay if it's like minimize misunderstandings or something like that we would just say minimize misunderstandings on your team right like like and that was not Landing because the managers it was too it was hard for them to come up with budget for that right it was sort of like it wasn't like a measurable tangible thing we had early success with teams that really cared about accuracy though sales teams and uh customer success teams that was

easy and so we basically have to develop proof points we realized that the horizontal approach was not working and had to go after specific verticals so I remember Marketing sales customer success I think were the first three that we tackled and we went into each one and we said hey what do they care about what are they being gold on what are they being bonus on right and and how do we build proof points that grammarly actually meaningfully moves the needle on that so in the case of customer success it was the seap scores right um in a case of sales it was your your win rate and that was not like a quick that was not a quick shift to build those proof points right because you have to bring on pilot customers you have you have to like you know work work with them to design the study we couldn't do it on our own we needed that participation So eventually got to a pretty good place and the B2B business and grammarly is uh

is is growing much faster than than than single seat licenses but it wasn't as uh as as much of a walking a Park as we thought it would be yeah I think B2B is one of those things similar to International expansion that is just so easy to underestimate and I think part of it is it's viewed as this monolithic thing it's like well we have this prosumer product individual prosumers are already buying it so how hard can it be to just go sell to Enterprises and teams and the fact is it's not monolithic because you're not selling to an Enterprise you're selling to a constellation of different teams across different functions who have different buyers different budget considerations different proof points they need to see different features they need built into the product experience and that just takes a lot of work but on the other hand there's so much LTV at stake like the average contract values of these

Enterprises is so large that the effort is Justified as long as you're solving a real problem um so you move into B2B you launch grammarly business in 2018 uh it's been a huge source of propulsion to grammarly getting to its most recent valuation of $13 billion one thing you did mention there was that you had

people switching companies or switching roles within companies asking about grammarly for business or asking about adding incremental seats to their plan on grammarly business and this is one of the things I've talked to other people about on the podcast is this network effect that exists within prosumer if you're selling into teams of multiple individuals how did those Network effects both within teams and then across companies when people left and cross-pollinated your product um contribute to the grow story I actually think that grammarly uh uh is not is it's it's not a good poster child for Network effects but it's a good poster child for Word of Mouth y right Network effects if we Define it as like you know the more people are using the product the more valuable it is for every user on the platform and this could be you know broadly or within your network I actually think that grammarly still has

a lot of work to do on actually building those type of features and Loops that would drive true Network effects there have been attempts at it with things like a shared Wiki right where grammarly plugs into your company Wiki and now when you're writing you know you it kind of like knows all the company lingo and if you don't know a term you hover on it and it tells you what it is from the company Wiki right so things like that users being able to contribute templates to the shared template library and then everyone has access to the same writing templates or whatever and other things but those are more recent Innovations but I think what you're referring to is uh gramly did have incredibly strong word of mouth I want to tip my hat to our product and product and design teams because grammarly basically buil this kind of like really iconic artifact the spinning g y the spinning G this the green spinning G in the bottom right

corner became like an Easter egg because people were you know people were scre like you're screen sharing in a meeting oh you're a grammarly user I see the grammarly G because it's in every writing field so it's like marketing itself in a way right or people go hey what is that right so it's like that is like impossible to measure but we knew it was a super powerful super robust thing people became so addicted to the G sometimes they would switch a machine or like that they would update their browser and maybe like the the you know grammarly the grammar extension didn't carry over if the G was missing it was like you know it it was like a devastating to them right it allowed grammarly to spread via Word of Mouth inside of organizations right because if you're with a colleague and one is a grammarly user and they're typing and and you see that really like magical interaction the underlines the hover uh

Etc you you ask your colleague wait what is that oh that's grammarly haven't you seen so it's it the fact that it was so ubiquitous yep I think led to a lot of Word of Mouth that we probably never really got got around to measuring yeah well and I think one of the insights there is just because most Word of Mouth happens offline and it's difficult to measure that doesn't mean it's not important and your point is well taken that you know you're not a figa you're not a slack it's not like a product that naturally lends itself to collaboration where more and more and more users are going to join just by virtue of the interactions taking place in the product itself but you can still generate a lot of Word of Mouth especially if you're clever about introducing viral assets like the spinning G that become a talking point within companies right so

last question here how do you think that AI is going to impact the world of productivity software and how do you think that grammarly's position in the market lends itself to succeed or not succeed on the basis of this seismic shift we're seeing like I know for example that grammarly recent acquired Koda and that's an example of an investment into a broader collaboration tool presumably positioning themselves to take advantage of some of this AI Tailwind uh but how do you see gramly responding to this ship I'm going to have to be uh a little bit careful here between what I think and what I know uh so um I think we always knew at grammarly that on the masslo hierarchy of call it communication and eventually productivity more and more things would get commoditized starting from the lowest needs right yep so when we were doing grammar checking and we were positioning ourselves as the world world's most accurate grammar checker we

built a lot of our models from scratch y most of them trained our own models like there was a whole we had like a huge NOP team computational linguist team that was benchmarking and constantly you know training retraining the models Etc right we knew that that's going to get get commoditized and we really got to move into like go above basic revision so then we got into things like tone this is before any of these llms so we like grammarly had tone editing and and other things that we called higher level of feedback right uh that was a lot more subjective we also knew that that's going to get commoditized eventually not because we saw you know it was pre- Chad GPT pre-open AI but we knew that was that was going to happen and so then we we we I remember we had a vision deck 10 years ago that that showed how we were going to play a role in in in um how we're gonna move away from revision into

composition and we were going to be able to like compose things from scratch right I probably have that Vision deck somewhere right um and so we knew that that that was going to be the case now there is a difference between knowing and then seeing it happening of course uh I do think that grammar leag could have responded a bit faster because I think it should have it should have been on its radar uh like llms when they were just you know when open AI just started as a research lab grammarly should have been paying very close attention yeah right and I feel like gramarly waited until it became like a fully commercialized product uh to be like oh uh something is changing in our Market okay okay so there was there's been some scrambling there's been some scrambling what I think is is happening you know the way I think grle is responding is I think you know first of all we're seeing that the power of the

models is really is is is is not a thing anymore every couple of weeks or every week or so they are they are outperforming each other and there is enough competition at the model layer and uh and and the cost is going down and the cost of computer is going to go down so we know that everyone is going to have access to the same models virtually for free so then there is a question of like you know where where is the where is the value going to acre uh we'll let the big boys and girls and whoever battle it out for you know whose model is the best but you know I think the future is no application is going to be built on a single model it just doesn't make sense it makes sense for it you know for you to plug into multiple models and either you know and figure out the best use cases for the different model or how to like you know create a better out output by potentially referencing or or querying multiple

models um Etc so it's not you know so I think I think grammarly certain advantages that grammarly holds number one it's still I think the best product today that sits across everything you do or everywhere you write everywhere you work it sits across everywhere you work yep that relationship that grammarly has built with its users can be cultivated for more things than just effective communication because gramly crossed I I feel like a very important threshold with its 30 or 40 million plus daus and that is people trust grammarly to be on their system people trust grammarly to be in all of their applications right you think of Kota you know Kota basically built this uh kind of beloved especially amongst product managers and product Builders a beloved workspace essentially but everything that happens on Kota happens inside of Kota so I'll probably pause here but you can just imagine you know everything

that Kota has done around docs and uh apps and Kota brain which is the ability to tap into your entire knowledge base and and reference it you can imagine that married with grammarly's kind of Super Highway that it created right um and what are the other kind of like AI first value Loops that the combined entity can deliver to to knowledge workers and and teams yeah I love that and to me the two through lines and

everything you just said are number one ultimately as a new technology matures the value tends to acre to the companies that do the best job in the application layer because they own the End customer and in grammarly's case even though some of the underlying technology around M NLP and machine learning to get to the right grammar recommendation are being commoditized you have all of these different touch points with the user and you've built up trust with customers over the course of a decade plus and that goes a long way and then the second thing is with mobile the last major wave of consumer technology Network effects were one of the key Moes that crowned the winners in any given category the company with the strongest Network effects ultimately won and with AI now I think there's this Data Network effect that is forming where if you can create the tightest feedback loop of more users using your product generating more data

that drives more accurate algorithmic outputs that then drives a better product experience and more usage then that becomes this virtuous flywheel and so I can see how even grammarly on its own has this Data Network effect in more users generating more queries generating more grammatical recommendations generating more users but now with the addition of Kota you just expand your surface area area and your ability to apply those advantages and it's a powerful combination I know we're

running short on time let's get to our lightning round and then we'll wrap things up so I'm going to ask a series of a few rapid fire questions you can give me short responses less than a minute first one is just what was the best part about working at grammarly and what's one thing you you would change you were there for almost a decade and so I imagine you have some good stories it's the people hands down lifelong friends uh they they they've been to my wedding we've been you know we witnessed each other's children being born and uh you know I consider them friends like you know uh lifelong friends U so that's that that's by far the the best thing what would I change I wish that we would have led from a position of trying to win as opposed to trying not to lose more M and it's one of these things that can be endemic to to a bootstrap company and we were bootstrap for the first seven years of our existence yeah is you

get into the scarcity mindset of like oh my God we built this thing how do we continue to maintain and nurture it and and and don't lose it and I think that can lead to blind spots and sometimes missing the boat or being late to the boat and then having to to catch up in a you know in a dingy or something yeah that's such great advice and much easier said than done when in the fog of War at a company and every day feels like a struggle to survive um but definitely something tech companies should always strive to do stay on offense yeah um besides grammarly what's your favorite consumer or prosumer subscription app and and why what's one that you use regularly and you just love oh my gosh okay so as I I I I live my life out of as got onto it at grammarly use it for all my advising work and use it for managing personal projects I run my Investments out of assana I run um I'm looking at my as right now I run I run

everything out of assana oh I'm I'm I'm a I'm a huge kind of personal finance junkie I I love Monarch money I'm a big user of Monarch myself yep one of my former clients doing extremely well shout out to Val and the team um but yeah because I was I was like a a huge mint user um in fact fun fact what I was uh when I got the offer from grammarly I had a competing offer from a tiny little company called page ones uhhuh you probably never heard of them they ended up then being acquired by by Mint huh and and really they underpinned what what we know mint to be and then mint got acquired by into it so I've been in that space I've been thinking about that space and being really like you know nerding out on it for a long time so Monarch money is like you know my my go-to got it yeah Val lives right here in Denver and I'm a huge fan of Monarch they're a great company um what is the biggest mistake that you see growth

teams make when they pivot their strategy and if you want you can specifically talk about this advice that consumer companies get all the time of like hey you should expand into B2B or you should pivot to B2B more often than not it fails and so any thoughts on mistakes to avoid when you're going through a pivot I would say the only thing I have to share given that this is lightning round is if it's a pivot treat it like a pivot and don't try to have your cake and and and and eat it too like a pivot should mean that you are turning away from an existing Direction into a new Direction and if you're not doing that then it's not a pivot so you have to be very honest with yourself got it but for me a pivot means that the current course was not working and so it's got to be it's got to be like that that's a pivot yep if it's like this that's not a pivot yeah that's a marginal correction marginal correction

so either you were wrong to say that you needed a pivot and what you needed was just a marginal correction or you actually did need a pivot but you're coming up short in your response yeah and and I think what I heard there was if you really do need a pivot burn the boats there's no half measures and you got to go all in because this survival of the company is often at stake yep um okay two more here so since leaving grammarly you've helped more than 40 companies and Counting as an adviser what do you love about being an adviser and what do you miss about focusing on one company uh two things that I love about uh about advising number one is just uh the the quantity and quality of exposure that I have to Founders Founders as an archetype is just the most fascinating group of people or that that I love being around so just having that constant influx of founder energy in my life right uh is is is is super

dope the the other thing that I really like are these um uh very weak and short feedback loops where you can have like a short call with a Founder I don't know I can do it on a treadmill I can do it on the bike and you know something that is second nature to you can have a profound impact on how they think about the future of their business and that and then and then when you hear back that it made a big difference that just super gratifying what do I miss about operating the relationships yeah you know I love my clients but there is something you know something about being um I don't know brothers or sisters in arms yeah in the trenches in the trenches going through the same fears insecurities winds periods of uncertainty yeah all of that resonates having gone through the same transition myself goes back to the people right and there are great things about being an adviser when it comes to people the

founder relationships it's like man that positivity is infectious but then you know missing the deeper relationships that you get from working at a company for many years mhm so last one how do you think the consumer and prosumer subscription ecosystem will change over the next one to two years you talked about it specifically in the context of grammarly but more broadly and there's a lot being written about and spoken about right now about how AI is impacting the app ecosystem how do you think it will change this is not an exercise that I enjoy doing I don't think I'm particularly good at projecting the future but uh I think we're going to see is we're going to see uh I mean we're already seeing an AI first take on everything an AI native take on everything um every vertical every product category uh Etc and right now everything's exciting like you just take like you know project management

it's it's take take the project management space y it's um you know it's cluttered monday.com Trello assana uh you know uh air table whatever right pretty cluttered space but I'm sure there's going to be like a dozen startups getting funded right now that are going to be saying AI first or AI native project management right now do we know what that actually means we're going to go through a period I think of of abundance and probably excess right because there's going to be AI first everything but but we're not going to know for a while where does AI first actually make a difference and where was it just a marketing ploye right but I think in some Industries in some vertical in some spaces it's going to make a huge difference because the incumbent are going to have a harder time to really fully take advantage of AI and so if someone is going to be reimagining the the the whole workflow or the entire

job to be done through an AI first lens they may be able to build certain net new experiences right um because like right now what is our experience with AI at a consumer layer it's typically through a through a a chat interface still right y you prompt you get something back so there's this whole concept of prompt engineering right but we're not seeing that many use cases I mean they're starting to emerge where it's more of a push versus a pull y right it's more opinionated exactly yeah well I think it's a fair bet I mean every technology cycle you tend to see this curve where there's the hype and a lot of companies get funded and then there's the valley of death and despair where a lot of them die off and then the winners emerge and to bring things back full circle whether you're an investor or an employee trying to choose your next job I would say bet on the people in periods of uncertainty like this it's

really hard to predict from a technological standpoint what's going to win but what you can do is BET on great people um well thanks thanks Yuri as always for being so generous with your time this was great discussion any final words or anything you want to say before we part ways here no thank you for having me on this was fun um I'm glad we got to talk about grammarly and not only grammarly thank you all for for tuning in well thanks for joining y it was my pleasure