Scaling from Consumer to SMB to Enterprise with Grammarly Head of Organizations Revenue Dorian Stone

I have spent almost all aspects of my career in trying to take what exists and improve it. What we find with Grammarly business is huge upside. Ineffective communication is one of the silent killers of business performance. Miscommunication just in a written form cost us upwards of 6% of our GDP. We're providing deeper and richer suggestions and around the actual structure the delivery to make sure it's actually engaging and has the right tone. Think about how much effort and time and energy that marketers put into building their brand. The challenges to delivering that consistent high quality brand experience. We actually see faster and faster speed of the actual individual support rep making fewer and fewer mistakes because they're getting better in learning in real time. Technologies are about challenging status quo's not just about optimizing on the status quo. Companies are going to have to to move into a world where they are solving for the and of quality and efficiency, quality and speed rather than a trade off mindset. I think that is a subtle but powerful change. All right, so let's jump in. So as as mentioned, want to talk a little bit about the learnings we have had at Grammarly as we move from a very successful consumer business to to expand from that business to also include SMB and now enterprise and just share with you a few of the learnings that we've had over the last few years. Now why is this important to talk about? The recent research will show over half of CEOs are citing not just growth as a top three agenda item but growth in any markets. And I think given everything we've been through over the last few years we see more companies taking a bigger step back than ever before. That's what the research would say and so we thought this topic would be timely. Your organization is more likely than not to be one that is seeking growth in the new segment and that's obviously challenging when you're going into an unknown space. So with that let me dive in. I'm going to start by just telling you a little bit about Grammarly and where we are on our journey. Grammarly was founded a little over a decade ago as a very successful we call it consumer product. Individuals purchase and use our writing assistant to help them in their professional lives as students, in an education setting and in their personal lives. We have grown over that time quite substantially with over 30 million daily users and we've grown also in terms of what we offer. So we have now an offering for Grammarly business which we'll talk through today. We have an offering for Edu organizations for nonprofits. And most recently we now have launched Grammarly for Developers, which allows developers to build Grammarly natively into web applications. And so we've continued to increase the offers that we have out in the market. And if you noticed what I described, we're increasingly moving into businesses where we are doing B2B relationships and offering B2B services and products to the market. So that's the journey we're going to focus on today. That's a little bit about where we are in our journey and Grammarly business. The point of discussion today has been around for about four years, although it really comes in two phases to this point, which I'll talk a little bit about. So with that we're going to talk through a couple of things. The first is at the outset, ensuring that assumptions are not made by leadership implicitly that come back and bite you later on, trying to be as eyes wide open as possible about some of those assumptions that oftentimes lead to pitfalls. Then thinking about the guiding principles that at least we found as being valuable to help us start to navigate an ambiguous path. Then talking a little bit about the way some of the people process and technology decisioning day to day management kind of operations had to change and had to be thought about differently as we got underway. And a little bit in retrospect, some clarity in retrospect of what probably could have done a little bit more of, then we'll summarize it up with some top takeaways. So that's how we're going to use the remainder of our time. All right, so with that, let's talk first about the, the leadership assumptions that can get in the way. You know, one of the things to note here is like most organizations that are looking for growth in new areas, we're building off the success of where we've come from and in Grammarly that is our consumer business. And it's easy as a result to implicitly make a set of assumptions that then later you realize were actually incorrect and you've lost time and moreover you've lost the opportunity to learn in the early stages of your efforts. So here's four that I'll share with you. The first is extensibility. On the back of such a successful business and particularly in our business, we saw a lot of professionals bringing Grammarly to work because we were helping them be better in their day to day efforts. As professionals, we made the assumption that then we would be applicable to the business. And some of that was correct because we already were operating a business. But More of it was not. And as a result, it took us time to realize where the gaps were. And so the extensibility of our product market fit, simply because it was being used in a work setting was not the same thing as becoming a B2B product and having the right product market fit that we wanted. And so extensibility not being guaranteed is important. And one of the areas here that I'll just share with you quickly is when we first launched Grammarly business, we actually saw a lot of demand. And that demand for the product actually distracted us from understanding where the extensibility of our consumer product that we're building off of stopped. And so it in fact exacerbated the challenge of this issue where we thought we had greater product market fit than we did. And it took us time to work through that first wave of demand that you'd see with any new offering to actually get down to, okay, where are we really working and are we offering the value that we really want to be offering to institutions? And so there's a little bit of noise there that I'd say is a red herring. And for folks that are seeing early success, if you've also made this assumption, it's time to be just a little wary and double check. Second, the value prop split. So in a consumer offering, and as you migrate into SMB, for example, out of a consumer offering on your way to enterprise, it's easy to not realize how much over the course of that journey, the buyer and the user are going to be different people, the admin will be a different person, and then influencers around the decisioning will start to come up. All of these things are one person in the same. In a consumer sale, in SMB sale, they may be very tightly linked with shared responsibilities. In an enterprise sale, enterprise decisioning, they're very different. And similarly, for success in delivering value in the institution, you need to actually be meeting the needs of these folks differently in their agenda differently. And not splitting that out, not being very clear about user versus buyer is just one very simple delineation early on is an easy way again to see yourself getting traction in certain segments where they remain close like SMB and have to really find out through pain. When those agendas split between a buyer and a user, for example, over time. The third is go to market mechanisms. They don't translate. This is kind of an obvious statement. Probably there's enterprise and consumer are very different, but again, coming from one to the other, we had a number of things both in the mechanisms. The look and feel of our marketing, the messaging and so on down to then the way we evaluated ourselves. Fun story is our first outbound campaign that we did for Grammarly business once we started to sort of tighten up about two years ago. Kind of realize some of these learnings and reset was driven by our B2C teammates and they had been so accustomed to running tests in the market, running campaigns, seeing results that were highly quantified down to decimal points within two weeks that when we had two weeks of just a few leads coming in from our outbound campaign and we were halfway through a marketing sequence, it was thought of as a failure when in fact it was actually performing above benchmark. It was just such a new area so for the team. So understanding and making sure that people really realize that the go to market mechanisms will not translate. It's not just about product, market fit. And then last, beware of strategies that rhyme. I think this is just a good general rule of thumb, but in particular land and expand. We look at so many organizations out there that have such strong expansion mechanisms and they're the darlings of the tech world. We make the assumption because we are looking at all those winning plays that that'll happen. The reality is we have been fortunate. We do have a strong expansion motion. But the reality is it didn't come as naturally as it would say to a company that had a different product that was networks like collaborative software. We do not have a network product. And going eyes wide open to that was very important so that we've got our expectations right and we built the muscles that we had to build. More than half of companies out there have very weak to negative net dollar retention metrics. And so making this assumption early on is a very dangerous one. And it can lead to actually a pretty tricky economic structure if you do start to land a lot of logos and then don't know what to do with them and start to see them slip back. All right with that. Those are the assumptions that I would say the sidebar that I have here on Channel conflict coming out of consumer right. You have a consumer revenue line. You have a B2B revenue line. To the extent that you have professionals that are moving from an individual product into a B2B product. There can be a lot of conflicts in the middle of the organization. It's very important to make sure that everyone realizes that they're rowing in the same direction. And too early on we can assume that people get it when in fact in their day to day they're still optimizing for their Number So doing everything you can to work out channel conflict is absolutely critical. And that is both between say the consumer and B2B side of the business. To the extent there is some cannibalization, it's also then within different channels of your business, your self serve channel, for example, and your sales channel. And so we do a number of things to actually work down channel conflict, particularly in the early days, so that we could advance our learning as much as possible and not get in our own way of optimizing for short term or siloed metrics rather than the big picture and missing the opportunity to drive learning as a result. So those are the assumptions that I would want to flag first, let's go to guiding principles. So now if you've got those assumptions in check, and I've shared with you some of the learnings we had in retrospect on those, what were some of the guiding principles that worked for us as we started coming out of the gates? First, you know, near term growth is not the goal. When I stepped into this role, we'd actually already promised very strong growth to the board on the revenue line. But it was very clear very quickly, particularly in light of digging in and realizing some of those assumptions we'd made and the fact that we need to actually revisit them, that we really need to take a build and learn mindset, not an optimized mindset. And that is obviously very difficult sometimes when you work inside an organization that is scaled in other places and where optimization is actually a very important part of what drives success. And so we really had to think about the fact that we need to create a business, we need to create customers, in our case, in creating a category that's doubly important. So that was one guiding principle I think that we got right once we took a step back. The second was this is about expanding the culture. In particular, when you think about a digitally driven consumer business, going to a business that will have digital channels as well as sales channels like enterprise sales channels, customer success, there's a lot of fear, there's discomfort in the organization with that transition. Particularly an organization like ours where so many people, the formative years of their career have been spent here in a very successful way of doing things, around one way of doing things. And so we really had to, we really had to make people comfortable and be dedicated to the idea that the culture was going to evolve. I think the shorthand example here is, gosh, does this mean we're have a bunch of enterprise salespeople running around and like ringing gongs and all of that. And there's a stereotype around all that. And that was scary for some folks. I think in this one you have to have the courage and you have to instill the courage in the organization that expanding the culture, broadening that aperture, and thinking about diversity in a lot of different ways as you think about what is needed to build the organization in the future is very important. And if you're ever in a point of comfort, you may not be acting courageously enough, per Brene Brown, who I find very insightful. And then last, this is coming from our own CEO, but our values. We have a set of values. Eager is the acronym. There are a set of values that we drive almost every decision with. I'm going to get back to one more value on the next page, but that always is our North Star as to whether or not we are operating, behaving and thinking about the business in the right way. When we started navigating some of this unknown space when we had setbacks, putting our values first rather than any specific business objective has been a very powerful touchdown for the entire organization as well as over time and as we've evolved from one phase to the next. Okay, so how does this translate into a few things that we did differently and were valuable for us to do differently? Just an example of people, process and technology. Well, first, picking up from the last page as we move forward, it's easy to be distracted, particularly if you're feeling the pressures of growth, to the best way to optimize for that growth or to build toward that growth in a very myopic way. One of the touchstones in our values that also translates into every operating decision we make is ensuring that we are bringing value first to our customers and users before we ever think about our revenue line. And second, making sure that what we are doing earns the right to have very deep trust with those users and that from a consumer basis, as a consumer organization, but as a B2B organization, similarly encapsulates the users and the employees, if you will, of that organization so that each one of them trusts Grammarly, but also the institution as well. We make a lot of investments and a lot of focus goes there. First, the revenue line is always second. So that's priority number one. And when you go through decision making, that literally means in meeting, sometimes you're stopping a discussion to say, wait a minute, this. We need to flip the order of this discussion and first talk about how this makes things better for the customer before be talking anything Else all right, investing in people having team or sorry task relevant maturity is critical. I personally love working with my team, I love growing them and so on. I know that I've made a few mistakes over the last couple of years in terms of stretching people too far for too long outside of their area of expertise in the spirit of growing them and challenging them. But it really more often than not I tend to be a little over biased on that toward that over optimistic moving probably a little more quickly on getting the right team members with the right experience and pattern recognition in place is important. What I would just say on that one is super critical is bringing people in for pattern recognition has to be paired and with their expertise has to be paired with the right values and those things have to be separately and collectively met. In terms of a bar for hiring I would not, I would be very worried about a trade off and in particular in those values making sure that they're curious. It's easy to have folks conflate the success they had at one organization and folks on both sides of the table. The candidate coming in, the hiring manager to conflate the success at one organization with the applicability of those learnings and those toolkits in the next organization. And so you want to have that curiosity ensure you're not just rushing in with folks bringing the wrong playbooks in, but you do want to get that experience and pattern recognition. Second, think about what operational excellence means in consumer business. Operational excellence can mean things like being very in particularly a scaled one like we had. Operational excellence meant things like being very precise, getting things very tight, being very thoughtful. In a startup you're going to be thinking more 80, 20. You have to be more back of the envelope, more fast, fail more qualitative information in B2B leading indicators and behaviors become very very critical to learn from rather than waiting until you get to the end state because of how long the cycle times are and how that will deteriorate your learning. So rethinking operational excellence and being thoughtful about that along the lines of those examples I just gave is very very important as you're moving up market and then productize everything. As we have gone through this journey we have a growing side of our organization that is sales, customer success, sales engineering, BDRs, SDRs and so on to complement our growth and product teams and others. As we try to get the whole product of Grammarly business to market as effectively as possible and serve enterprises, earn the right to serve enterprises at real scale. It's easy to then get into a world of more headcount equals better performance. And ensuring particularly the leaders in those areas of the organization that they share the same responsibility as any other leader in the organization on the product side to be driving productivity, to be productizing things, to be looking at places where manual work should actually be removed from day one is very important. This is a difficult thing to instill in an organization. Later, once you've started to scale, once you have certain cost burdens, but also once you have certain precedents in place in that side of the work. All right, so we go to go to the top takeaway. So you have some pitfalls to avoid that are implicit assumptions. You can keep those in check early enough and shine light on them that can really help you then have guiding principles coming out of the gates that we found at least helpful here as we try to go up market. And then there's some examples of the type of people, process and technology related ways of thinking about that enterprise side of the business that are very important to get right as you start your hiring and as you start to set some precedents out in the business. Cutting across all that, if I reflect on the top learnings, here are five that I would take away. Coming off some of these might feel a little hyperbolic, but I think they're important. I think it's probably in retrospect, probably would have been better if we'd even taken a stronger stance to write down the reasons why our current strategy to go into B2B and to go into enterprise would not work. Rather than allowing ourselves to be over optimistic based on the momentum we saw with professionals in our individual business as well as the early days and results that we got as we first launched Grammarly business. I think if we take in not a pessimistic lens, but I think if we take in a more critical and objective lens while maintaining a positive attitude about our growth and our future, I think we would have actually pulled some learnings forward. I think I've said this one before, but it's worth saying again. It's very, very easy. Particularly as you have more and more folks coming in from other organizations looking for ways to show impact. It's really important that all aspects of the business are trying to figure out ways to add more value to customers and to make those customers feel more and more comfortable with with doing business with you. And I know for us this is a really big deal. Always before extracting value. An example from a sales case where some people scratch their head and say, well, how is that applicable? In sales is just taking the time to go deeper to understand what a customer's needs are, to show to make sure that we understand the impact that we're going to have. That is a way and that is part of the whole product market fit that's important to get right as you go to enterprise. And for us that was a big that was a big place in our sales team for muscle building and continues to be the foundation for enterprise is not necessarily sexy. There's a lot of features that can be put up very quickly. There are a lot of sales materials and assets that can be produced that are very shiny. But the reality is getting this right from product to underlying go to market systems to some of the best basics of what it takes to operate in each function and tie those functions together is not the sexiest work, but it is very, very important. And building a strong foundation for the next two, three periods out I believe is something that is oftentimes overlooked and seen as a necessary evil. And I think for us that has not been the case so much of what I talked about the previous slides. It's just so foundational. But it's worth calling out because it is so easy to move past quickly. I think we talked about investing in people that is just absolutely critical. The and values is very important. There again, having team members come in with the right experience and they come in from the right backgrounds of organizations that you want to learn from. If that's not paired up with the right values and they don't independently objectively meet the right values, particularly curiosity, empathy and things like that, you're going to gain far less than if you hold both of those bars as critical and required for any higher. And then the last one is reserve the right to be smarter tomorrow. There are plenty of plans that we have put in place. There are plenty of commitments that we put in place. I think I'd mentioned that even when I started we had revenue goals already committed to the board for the next year that frankly we had to unwind. And that's not just on the revenue line. I think in general should always be reserved. The right to be smarter tomorrow and empower the teams to do that shouldn't take away from the ability to execute, stay focused, but it also should make sure that learnings are being surfaced as quickly as possible and that we're able to use them. So with that I am going to stop sharing. That's what I have for today. Hopefully folks found that valuable and I think we have a few questions in the Q and A so let me see if I can do this. Open up the chat and let's see. We have. See here. I'm seeing everything. Okay, so we have some questions from the Saster team. I thought I saw upwards of six chats listed. I'm only seeing a couple here, so I'm not sure if I'm seeing anything. So Gabriella, if you want to jump in at all, please feel free.

Yeah, absolutely. I'm happy to read them off for you and you can answer. How about that?

Sure.

All right, first question. Can you share specifics on how you scaled the sales team from SMB to enterprise in a short period of time? Did you train existing reps or bring in a dedicated enterprise sales team?

So thank you for the question. We did both. So when we first started on those first couple years of success, as I'd mentioned, we found success relatively easily. It tended to be smaller accounts, smaller deals that were just pouring in. And as a result our team was largely acting like an SMB sales team on inbound. And I'd go so far as to say we were almost transaction processing rather than selling value and really understanding the market. So we took a two pronged approach to that. We hired some enterprise sales leaders and enterprise sales team members. We then put in. Rather than dividing the teams up, we allowed the teams to work together on accounts so that those with greater experience could also role model and apprentice those that had been coming from an SMB shop and hadn't known anything else other than that transactional based selling. And then we overlaid on top of both of those some very traditional methodologies and trainings. So med pick command of the message and so on and brought in training resources to upskill. Last, we've made our coaching a critical component of the role of each frontline manager. That's easier said than done because it's a busy. Everybody has a busy life. But we've also tried to instill that that is, that's an important part of what we do, peer to peer, the way people pair up. Obviously what our enable and training does, but the individual role of each coach. And so it's been a multi pronged effect or a strategy.

Wonderful. Thank you so much for sharing that. I think we have time for one or two more. What new elements do leaders need to think about in scaling today that they may not have in the past?

Well, that's a good question and actually maybe I should have hit on this a little bit more. So thank you for asking it. You know, there's so much that's different now than just a few years ago in terms of so many different go to market mechanisms, so many different ways. Particularly in a business that is serving individuals who are also professionals that work in the companies that you want to do business with. As a B2B organization, there are so many different ways of connecting people to the challenges or jobs to be done to then the value that you can provide across different channels, the technology that drives those channels, that it can be either a far messier or far more exciting. It can be both world than it was in the past. The one thing that I would that I try to avoid personally and has worked out well is this idea that we have different strategies for different channels or different teams deal with specifically different deal types and sizes. I found that that actually inadvertently starts to create silos and you actually lose the synergy that you'd otherwise be able to get. So for example, we have a professional using our product and enjoying it and finding a lot of value in it who is curious about team product rather than our individual product for their department. Let's say they may purchase through our self serve funnel and get some exposure through the trials that we offer there. But we recognize that that account is in say a large, more complex organization where they're going to need more support, they're going to need to set up self serve or what have you, sorry, sso single sign on and things like that. And we want to get a human to actually help take care of them. That feels relatively simple. But automating that, making that efficient and getting learnings out of those handoffs and those different channels and getting them to each other is far more complex. So there's a greater opportunity. It may be a little bit messier, but there's also a lot of creativity is how to do that well.

Amazing, amazing. Thank you so much. What do we have a couple more minutes? Let's throw one in. This is from another attendee here. You had to scale Grammarly in a fairly short amount of time. What broke along the way or what mistakes did you make that we can avoid?

Yeah, well, hopefully I've highlighted some of the mistakes. I think one I highlighted was being too optimistic about what we could do with the early team in terms of part time dedicated resources who also had a full time job in their roles on the other side, the consumer side of the house, as well as stretching people and using just good problem solving to stretch people out of the consumer business into the B2B and then up market in B2B. That was one learning that I had. I think it came with all the right intention, but I think it made it harder on our people and it slowed us down a little bit. That's one. The other, I think is actually not moving too fast. I think a lot of what people solve for and what we solve for in the early days was how do we move really quickly and we start looking at our growth rates year over year and things like that in the first couple of years off a very small base, it looks great. I think if we had, I don't want to say pumped the brakes, but if we had put learning ahead of ever celebrating the revenue line and learning from losses as much as from wins and setbacks as much as wins, I think would have been better off. I think the third is when you get to actually full enterprise grade. There are so many long poles in the tent issues you have to get started on early, whether it be certifications and know SoC2 and things like that, or whether it be actual some back end functionality in the product or your data structures, what have you. Identifying those early I think is something that we should have done and it took us a couple of years to really get our hands around. I think that's another thing that again, going to the less sexy side of it probably would have put more time and energy on that earlier.

Sa.