Grammarly+Coda: From Assistant to Creator

In December Grammarly announced its intent to acquire productivity platform Coda, with Coda’s CEO and Co-Founder Shishir Mehrotra set to become the new CEO of Grammarly. With this acquisition, Grammarly moved from being an AI-Powered writing assistant to an entirely new product where the writing assistant becomes secondary to the full suite of documents, workflows, databases, apps and templates for businesses.

My history with Grammarly goes back to 2016 when being able to use the browser extension and later extensions for other software made spellcheck a delight.

I started with Coda in 2021. I am not 100% about this but I found Coda when I was looking for resources in OKRs.

Both Grammarly and Coda invested heavily in great UI and UX even though many delt that Coda was more for the tech savvy crowd with it's templates and workflows for managing projects.

How did ChatGPT throw a wrench in Grammarly's growth

Grammarly had a huge fan following with the content creator crowd. Anecdotally people loved the spell check everywhere availability of Grammarly. All this was until OpenAI arrived on the scene with ChatGPT and gave the ability for anyone in the world with an internet connection and a browser to create, rewrite, summarize content.

I began to hear less from previously gushing fans of Grammarly after OpenAI arrived on the scene with ChatGPT. Grammarly did progress into AI with GrammarlyGO which extended beyond spellcheck and enabled users to set the tone for their writing, offering options like casual, neutral, formal, and even more specific tones like empathetic, engaging, or witty. This helps in tailoring messages to fit different communication scenarios.

In 2021, the company attracted $200 million in investment, which valued Grammarly at $13 billion and declined in valuation to $8 to 9 billion in 2024. According to SiliconANGLE & theCUBE Grammarly is used by 500,000 applications and websites and is used by more than 40 million people daily and Coda is used by 50,000 teams at large companies,?including Figma Inc., DoorDash Inc., Square and The New York Times.

Grammarly was in a bind. They could stay stagnant as their domain became the market share of LLM-powered rewriters, or they could try something different. With everyone and their mom seemingly having access to a LLM, there wasn't much incentive for people to buy their software. Plus, Grammarly was already used by 500,000 applications and websites, meaning that they were losing market share to these new LLM rewriters that are everywhere. So, they did the only thing that made sense. I just used the Google Chrome Extension "Help Me Write," powered by Google Gemini, to rewrite this paragraph where I would have used Grammarly. The Chrome browser also has a spell-check.

Coda will dominate this relationship

• Grammarly has an established market presence and vast user base, making them the apparent winner in terms of immediate market impact and strategic positioning. With their acquisition of Coda, Grammarly moves into a comprehensive AI productivity platform that goes beyond writing assistance. This is aligned with the industry trend of integrating AI into productivity tools. By bringing Coda’s CEO Shishir Mehrotra on board, Grammarly gains new leadership with new ideas. With these changes, Grammarly becomes a stronger competitor to platforms like Microsoft 365 and Notion.
• Coda benefits from the resources of a larger, well-established company with a robust infrastructure for AI. With this acquisition, Coda can potentially gain the scale and resources to develop and integrate AI-powered tools more quickly. However, with every acquisition, there is the risk that the acquiring company’s culture or product focus will overshadow the smaller company’s culture or product.

Implications for Marketing Teams

Opportunities:

Integrated Marketing Tools: Marketers could benefit from a single platform that combines document creation, project management, and AI-driven content optimization. This could streamline workflows, from brainstorming and content creation to final edits and publication, all within one ecosystem.

Enhanced Content Creation: With Grammarly's writing enhancement tools now potentially integrated into Coda's document management, marketers can expect more sophisticated content generation, editing, and optimization capabilities. This could mean quicker content turnaround with higher quality, tailored to brand voice, tone, and SEO practices.

Data Insights: Combining Coda's data handling capabilities with Grammarly's text analysis could provide marketers with deeper insights into content performance, audience engagement, and even brand sentiment directly from the tools they use daily.

AI-Assisted Marketing Strategies: The integration could lead to AI-driven marketing strategies where content, timing, and personalization are optimized based on real-time data and AI recommendations, potentially increasing ROI on content marketing efforts.

Challenges:

• Learning Curve: Marketers might need to adapt to new functionalities or changes in how familiar tools work, which could temporarily slow productivity as they learn to leverage the combined strengths of both platforms.
• Data Privacy Concerns: With increased integration comes the responsibility to manage data privacy. Marketers will need to ensure compliance with data protection regulations and maintain trust with their audience, especially if content creation involves sensitive customer data.
• Cost: If the combined platform adopts a new pricing model or increases costs due to enhanced features, this could impact marketing budgets. Free users might find themselves needing to upgrade to premium plans to access all new features.
• Brand Consistency: Ensuring that AI-generated or AI-optimized content aligns with brand voice and strategy might require more oversight, particularly as these systems evolve.

Strategic Considerations:

• Adaptation of Workflows: Marketers will need to reassess and possibly redesign their content creation, collaboration, and project management workflows to leverage the new tools effectively.
• Skill Development: There might be a need for training or hiring for new skill sets focused on AI integration in marketing tasks, from content creation to analytics.
• Experimentation: This acquisition provides a playground for marketers to experiment with AI in content marketing in ways that were previously more complex or fragmented. Testing different AI features for content personalization, SEO, or campaign optimization could become more accessible.
• Market Positioning: Brands using this integrated system might gain a competitive edge in content quality, speed, and relevance, potentially influencing how they position themselves in the market.
• Vendor Consolidation: For companies looking to reduce the number of tools they manage, this acquisition could be an opportunity to consolidate tech stacks, simplifying IT management and potentially reducing costs.

The question that everyone should be asking is, can they live without Grammarly, which is now combined with Coda? All Grammarly users would love to stay with Grammarly, especially now that it's combined with Coda, and add the ability to manage content from one platform without needing a new platform.

The new Grammarly platform now has some of the features that would make Microsoft 365 Google Workspace , Zoho or another software platform appealing. Will users of those other platforms move to a new platform like Grammarly?

I think this is an attractive offer to smaller users if the cost is low to start with Grammarly and if it is offered as an upsell to existing users of Grammarly.

I think Shishir Mehrotra should build up an enterprise team and continue to go after large enterprises. Next create a PLG strategy to get teams to use Grammarly as another acquisition channel.

I wish they had named the new company Coda. I’m not convinced the Grammarly brand has the same value it had 15 years ago as a market disruptor.