The San Francisco-based AI writing assistant has become an indispensable tool for millions, refining everything from casual emails to corporate reports. But its journey to a $13 billion valuation wasn’t smooth—it was a high-stakes gamble that nearly bankrupted its founders.
The Early Struggles: Betting It All On A Vision
Before Grammarly, co-founders Max Lytvyn and Alex Shevchenko and their colleague Dmytro Lider had already built and sold MyDropBox, a plagiarism-detection software. Instead of playing it safe, they poured nearly all their earnings into a new venture that many believed was either unnecessary or impossible to build.
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As non-native English speakers, they understood the frustration of perfecting written communication. “It takes an incredible amount of time, effort, and psychological pressure to translate thoughts into words,” says Lytvyn. Their mission? Make it easier.
But in 2009, AI was still in its infancy. Grammarly’s first version took up to 10 minutes to process a single document—an eternity in the digital age. They needed time and resources to develop real-time functionality, but without external funding, the company teetered on the brink of collapse more than once.
Walking A Financial Tightrope
For years, the founders took no salaries. Every dollar went back into the business. “It wasn’t like we had venture capital to burn,” recalls Shevchenko. “Every decision was a make-or-break moment.”
To test demand, they launched ‘painted door’ experiments—creating a website advertising Grammarly before the product was fully functional. When users attempted to purchase, they hit an error message and were asked to return later. The response was immediate. People wanted what Grammarly promised.
The real breakthrough came in 2015 when the company shifted to a freemium model, skyrocketing its user base to one million daily users. Suddenly, Grammarly wasn’t just surviving—it was thriving.
AI’s Evolution: From A Slow Start To Instant Corrections
At its inception, Grammarly’s mission seemed futuristic. Many dismissed it as redundant—after all, word processors already had spell checkers. Others believed the technology simply wasn’t feasible. “Ironically, the skeptics who said it was impossible were closer to the truth,” admits Lytvyn.
In the early days, Grammarly required users to upload documents and wait for results. Today, thanks to advancements in AI and large language models, corrections happen in real-time. Shevchenko sees this as just the beginning. “With generative AI, it feels like Day 1 again,” he says.
Lessons From The Edge Of Failure
Looking back, Lytvyn and Shevchenko agree that near-failure was a constant companion. “Multiple times, we thought, ‘This might be it,’” Lytvyn recalls. “But each time, we saw that reinvesting in the company expanded its potential.”
The gamble paid off. Grammarly now serves millions and is poised to lead the next wave of AI-powered communication. But its founders will never forget the early days—when they bet everything on an idea that almost didn’t make it.
