Can an ex-hedge fund guy and his nonprofit Khan Academy make American schoolkids competitive again?
In August 2004, Salman Khan agreed to help his niece, Nadia, with her math homework. Nadia was headed into seventh grade in New Orleans, where Khan had grown up, but she hadn't been placed in her private school's advanced math track, which to a motivated parent these days is a little bit like hearing your child has just been diagnosed with Lou Gehrig's disease. In particular, Nadia was having trouble with unit conversion, turning gallons into liters and ounces into grams.
Math was something Khan, then 28, understood. It was one of his majors at the Massachusetts Institute of Technology, along with computer science and electrical engineering. He had gone on to get a master's in computer science and electrical engineering, also at MIT, and then an MBA from Harvard. He was working in Boston at the time for Daniel Wohl, who ran a hedge fund called Wohl Capital Management. Khan, an analyst, was the only employee.
Being a bit of a geek, Khan put Yahoo!'s (YHOO) Messenger to work to help Nadia, using the Doodle function to let him illustrate concepts for his niece as they spoke on the phone. Then he wrote some code that generated problems she could do on a website. With Khan's help, Nadia made it into the fast track, and her younger brothers Arman and Ali signed on for Khan's tutoring as well. Then they brought in some of their friends. Khan built his site out a little more, grouping the concepts into "modules" and creating a database that would keep track of how many problems the kids had tried and how they had fared, so he'd know how each of his charges was progressing.
Messenger didn't make sense with multiple viewers, so he started creating videos that he could upload to YouTube. This required a Wacom tablet with an electronic pen, which cost about $80. The videos were each about 10 minutes long and contained two elements: his blackboard-style diagrams—Khan happens to be an excellent sketcher—and his voice-over explaining things like greatest common divisors and equivalent fractions. He posted the first video on Nov. 16, 2006; in it, he explained the basics of least common multiples. Soon other students, not all children, were checking out his videos, then watching them all, then sending him notes telling him that he had saved their math careers, too.
Less than five years later, Khan's sideline has turned into more than just his profession. He's now a quasi-religious figure in a country desperate for a math Moses. His free website, dubbed the Khan Academy, may well be the most popular educational site in the world. Last month about 2 million students visited. MIT's OpenCourseWare site, by comparison, has been around since 2001 and averages 1 million visits each month. He has posted more than 2,300 videos, beginning with simple addition and going all the way to subjects such as Green's theorem, normally found in a college calculus syllabus. He's adding videos on accounting, the credit crisis, the French Revolution, and the SAT and GMAT, among other things. He masters the subjects himself and then teaches them. As of the end of April, he claims to have served up more than 54 million individual lessons.
His program has also spread from the homes of online learners to classrooms around the world, to the point that, in at least a few classrooms, it has supplanted textbooks. (Students often write Khan that they aced a course without opening their texts, though Khan doesn't post these notes on his site.) Dan Meyer, a high school math teacher and Stanford University PhD candidate in education, puts it this way: "If you're teaching math in this country right now, then there's pretty much no way you haven't heard of Salman Khan."
Khan is more than just popular. He's a darling of America's amateur educational elite—people such as Bill Gates and John Doerr—who write checks and invite him to speak at their functions. Many of his followers are tech leaders, who understand more than most how dire America's standing in math education has become and what it may mean. In its 2010-2011 Global Competitiveness Report, the World Economic Forum ranked the U.S. 52nd in the quality of math and science education. Khan's March speech at TED 2011, the ideas conference in Long Beach, Calif., was met with an immediate standing ovation and capped by Gates, who interviewed him onstage about the project.
Gates is one of Khan's biggest fans. In early 2010 a staffer sent Gates a link to Khan's site, and Gates—a devotee of online learning with three children and a few billion earmarked to fund educational ideas—was immediately taken by it. He mentioned Khan in a speech at the Aspen Ideas Festival in July 2010 and soon after invited him up to Kirkland, Wash., where his think tank, BgC3, has offices.
"What Sal Khan has done is amazing," Gates says in a video on his personal website. "He's taken all this material and broken it down into little 12-minute lectures. I use it myself to remind myself of things. I have children who like it. So I was super happy he came up and we got to talk about where does he go now, and how can my foundation help him pursue this dream." The answer was a $1.5 million donation from The Bill & Melinda Gates Foundation. "I see Sal Khan as a pioneer in an overall movement to use technology to let more and more people learn things," says Gates. "It's the start of a revolution."
Google (GOOG) is also a supporter, having awarded the Khan Academy $2 million in September of 2010, when the Academy won a crowd-sourced contest called Project 10100, which offered $10 million to five organizations that would "change the world." Doerr, one of the most successful venture capitalists of all time (Google, Amazon.com (AMZN), Intuit (INTU)) has, along with his wife, Ann, given $110,000 to the Khan Academy. "It's a little surreal to have your first donations by donors with a capital D like that," says Khan.
Khan moved to Palo Alto, Calif., in 2005, where he worked on Khan Academy videos out of a closet in his home. This spring he set up headquarters over a tea shop in Mountain View. It's a down-to-earth Silicon Valley town that, thanks to Google, its most famous corporate resident, has lots of people with the means and inclination to underwrite Khan's experiment. On a visit in April, the new office was nearly empty, save for a few desks and three of eight employees, including Shantanu Sinha, the chief operating officer, who had left consulting firm McKinsey to join Khan. There were numerous large ficus trees and a few framed photos leaning against the walls; Khan had just ordered them from Art.com.
Khan's own office had only a handful of tablets like the Wacom sitting on a desk made out of remilled telephone poles and a bookshelf with a smattering of textbooks and science fiction paperbacks, which Khan reads for fun. A few days before, he had hosted Wael Ghonim, the Google employee who helped spark the revolution in Egypt. He was off to visit Reed Hastings, the chief executive officer of Netflix (NFLX), later in the week. (Hastings recently pledged $3 million.) A Charlie Rose taping would follow the week after that.
Between meetings and appearances, Khan took a little time to describe where the Khan Academy had been and where it was headed. In the first years, Khan's hedge fund job started early and finished at 2 p.m. (the office worked on East Coast time), and he spent the afternoons making videos and building the site's analytical tools. These tools have since blossomed into a full-featured dashboard that tracks each student's progress, showing which modules have been completed, how a student has done on the practice questions, which videos a student has watched, and how much time a student has spent watching those videos. It has since been modified so that a teacher or "coach" can pull up a list of dozens of students whose progress can be compared, module by module. A student with a lot of greens is cruising along. Yellow bars indicate that a module isn't finished. Red signifies trouble. These are all linked to a "knowledge map" that records which modules have been completed and also how the modules relate to one another, so a student can pick a path from addition to derivatives.
By September 2009, Khan had left the hedge fund but was still working in his closet and had essentially turned himself into a full-time producer of amusing and helpful math shorts that were going viral. He wasn't getting paid, but he was being approached by a number of venture capitalists.
"They would say, 'Hey, let's do a hybrid double bottom line organization,'" says Khan. "Meaning you care about profit and social good. There would be this big equity chunk. There might be a freemium model. You'd get a salary. It was funny, too, because they think you're this person who doesn't care about money at all. They're like, 'It's for the love of the kids!' But I do care about money. I was tempted, but by meeting two it had become not fun for me."
In the end, he wasn't and still isn't sure the Khan Academy should be a business. Because it's a nonprofit, it's able to attract all kinds of talented dreamers, many of whom work for free. "We're getting talent money can't buy," says Khan, mentioning the newly hired Dean of Open Source John Resig, an expert in the Java programming language. Giving away his curriculum means Khan doesn't have to tailor it to states such as California and Texas, which, by wielding enormous ordering power, end up shaping textbooks for many other states. The California Education Dept., for instance, reviews its math curriculum about every six years, though even that schedule is the subject of legal wrangling. The document describing just an "overview" of the process of textbook approval and adoption is 12 pages long. These adoptions are categorized as "opportunities" by New York-based McGraw-Hill (MHP), a major textbook publisher, which tracks them closely.
"What you have in most education software is that they're catering to the decision-maker who makes the budget allocations, and that decision-maker has a lot of check boxes," says Khan. "Does it do this? Check. Does it do that? Check. They could care less about the end user experience. We're very bottom up. The for-profit guys, as soon as they incorporate, they start lobbying for grants and selling into school boards and become essentially dependent on navigating this huge bureaucracy, and they completely lose sight of the end user. It's the opposite of what we're doing."
Khan survived on donations and savings until the spring of 2010, when he got an e-mail from PayPal (EBAY) saying that someone had just put $10,000 into his account. It turned out to be from Ann Doerr. He wrote her his thanks and said that since she was his largest donor, he would love to name a school building after her, if the Academy had a campus. A lunch followed, and Doerr expressed shock that she was Khan's biggest donor. She put a check for $100,000 in the mail, insisting that he take a salary. More important than the money, she has become a cheerleader for the Khan Academy and often stops by the office. "Sometimes," says Khan, "she even brings cake."
Overtures from the VCs have since tapered off. "They get that the Khan Academy is not for profit, which is part of the reason I think it's working," Khan says. "We have volunteers and so much good will. It's not a religious thing, it's just that some things are better in the not-for-profit world."
Giving away effective methods for mastering the world's knowledge presents a Napster-like challenge for companies such as London-based Pearson (PSO) and McGraw-Hill, which publish two of the most popular grade-school math textbooks and offer extensive online and digital components. For Pearson, the education segment in North America, comprising textbooks, online products, and test administration, represented £2.6 billion ($4.2 billion) worth of business in 2010; for McGraw-Hill in 2009, it was $2.4 billion. Education Market Research estimates that the K-12 textbook market alone will reach $3.5 billion in the 2010-2011 school year.
Companies such as Pearson and McGraw-Hill do more than create education material, though. They've also mastered the art of selling to the bureaucracy. Pearson offers the Envisionmath student textbook for $64.97 and piles on dozens of aids, worksheets, and digital options. There's the Classroom Manipulatives Kit ($427.47), which has fake money, color tiles, and other learning tools; and there's a massive selection of CD-ROMs, in formats like the Digital Teacher Resource Package ($997.47), the Premium Digital System Teacher Resource Package ($2,047.47), and the Professional Development Series Package ($1,187.47). McGraw-Hill's offerings are similarly varied and just as expensive. Mike Evans, head of the math curriculum at Pearson, says schools don't necessarily opt for all of those. "Close to no one buys the $2,000 package," he says. "We estimate the total cost per student is usually about $10 to $12 per year."
Not surprisingly, McGraw-Hill and Pearson are also building online offerings and have separately contacted Khan about some kind of partnership. Khan did end up contributing some videos to a forthcoming book on chemistry by Cengage Learning, another player in the education market, doing problems from the book. Most of these talks have gone nowhere for the simple reason that Khan wants his stuff to be free.
On a Thursday morning at the Covington Elementary School in Los Altos, Calif., fifth-grade teacher Richard Julian has put aside Pearson's Envisionmath textbooks (special California version) for a morning with the Khan Academy. Covington is one of three schools in the Los Altos district using the Khan Academy in some fifth and seventh grade classes. It's also the kind of school every parent dreams of. The buildings are bright and clean, the grounds are carefully maintained, and the weather is so good that the students hang their bags on the walls outside the classroom.
Julian's classroom has windows on three sides and room for his desk as well as a separate lectern. Inside, 27 children sit in front of 27 laptops, all logged on to the Khan Academy. Used in the classroom, the Khan Academy flips the traditional curriculum; students listen to the lectures at home, on their own time, and do the homework in class, which allows the teacher time to address student issues individually. As the class progresses, Julian wanders through the desks with an iPad running Khan's dashboard, so he can see who's ahead and who's behind. He doesn't really need it: He already knows exactly how each student is progressing. And he isn't doing as much individual teaching as one might expect. Often, the lagging students are tutored by the students who are ahead. "The kids know whom to call on," says Julian. "It happened on its own. They just began to get out of their seats and work with each other. They've identified their trustworthy peer tutors. They know they can call on Sriram and Akhil and Albert, and that they know what they're talking about. Mainly, I've had to spend time teaching them how to teach."
Erin Green, principal of Covington, loves the Khan Academy and plans to expand it to more classrooms. "Many of the students are working at a level of mathematics that I have never seen in an elementary school before, maybe not even in a junior high school before," she says. "They're engaged and they're excited, and that's the most exciting part. It meets you at your level."
The Khan Academy has also been introduced in two seventh-grade classrooms for struggling learners in the Los Altos district, and the district is considering using it in all schools next year. "Their improvement has been dramatic," says Khan of the slow group, who notes that his studies are small, not peer-reviewed, and just intended for him to get a sense of whether Khan Academy methods are working or not. "We're seeing 70 percent on average improvement on the pre-algebra topics in those classrooms. It definitely tells us it's not derailing anything. All the indicators say that something profound looks like it's happening."
In Julian's class, Sriram, one of the standouts, is asked what he's working on.
"Chains," he responds. "It's like a calculus thingy. But it's really easy."
"Well, to him," says Julian.
Sriram moves aside. The question on his screen looks like this:
ƒ(x) = e cos(x)
ƒ'(x) = ?
Along the right side are five answers:
— e(cos(x)) - 1 • (tan(x))
— (e - (cos(x))) cos(x) (csc(x))
— (cos(x)) • e cos(x) + (sin(x))
— e cos(x) • (-sin(x))
— None of these.
Sriram explains in a halting, impossible-to-understand fashion how he arrives at the answer, plugs it in, and gets a "correct."
"I don't get some of this stuff either," says Julian. "They're like, can you help me? I'm like, I have to go back and watch Salman's videos."