Salman Khan (no, not the Bollywood actor) was born in Metairie, Louisiana, to a Bengali family. His father was from Barisal, East Pakistan (present-day Bangladesh) and his mother from Murshidabad, India. As a teenager, he went to the Grace King High School, where, as he recalls, "a few classmates were fresh out of jail and others were bound for top universities."
He was one of the students bound for the top universities. Khan attended the Massachusetts Institute of Technology (MIT), graduating with Bachelor of Science and Master of Science degrees in 1998. Five years later, he graduated with an MBA from Harvard Business School.
For the next six years, he worked at a hedge fund. Until he quit and decided to focus on his educational YouTube channel “Khan Academy.” The rest, as they say, is history. But unlike most other internet entrepreneurs of his time, Sal Khan (as he’s popularly called) decided to register his startup as a non-profit. What was his vision, and how is the company doing now? Well, those are some of the questions we’ll cover in this week’s issue.
We also explore the story behind the $30 a month email app Superhuman, understand what a “gamma squeeze” really is, read the first interview with the man who kicked off the Gamestop saga, and lots more!
Let’s dive in!
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Khan Academy - Creating A Global Edtech Behemoth
In 2020, Indian edtech companies raised over $2.2 billion in funding. All the investors believe that edtech is going to rake in hundreds of billions of dollars in the years to come. There are edtech companies targeting students of all ages, for all subjects, and for all entrance exams. Companies such as Byju’s, Unacademy, WhiteHat Jr, have become household names are have exponentially grown their user base in the past year.
On the other hand, there’s Khan Academy. A non-profit that’s competing with these heavily funded companies. The differentiating factor? All content on Khan Academy is available for free.
If you’re currently thinking “they probably follow a freemium model” or “they probably only offer some low-quality courses for free” - no, everything on Khan Academy is available for free. Don’t worry though, you’re not alone in your skepticism. The most asked question on Google when you search for Khan Academy - “Is Khan Academy really free?” In a world where you pay a subscription fee for everything from your music to your newsletters to your word processor on your laptop, people can’t believe that Khan Academy is free. But it is.
Why? How? Well, their stated mission is “to provide a FREE world-class education for anyone, anywhere.” In 2010, a year after Sal Khan decided to focus full time on Khan Academy, Google donated $2 million for creating new courses and translating the content into other languages, as part of their Project 10^100 program. Since then, the company has relied solely on donations to keep going. Their list of donors includes Carlos Slim, AT&T, the Bill and Melinda Gates foundations, among several other illustrious names. Earlier this month, Elon Musk donated $5 million to Khan Academy.
Khan Academy provides a wide range of courses for students of all ages. A quick glance through their app or website will show you courses for everything from math and science to test prep and life skills. All their content is created by experts (content specialists) and follows strict quality & research standards. Since 2015, Khan Academy has been the official SAT preparation website. As per their own website, studying for the SAT for 20 hours at Khan Academy is associated with a 115-point average score increase.
However, they don’t only have courses for students. They also provide tools for teachers. One of the major issues with the way our current education setup is that it judges every student on the same scale. Albert Einstein famously said “Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.” Khan Academy is empowering teachers to solve this issue by adopting a more personalised approach to teaching. Their tools allow teachers to track data for individual students based on their results in tests and assignments and provide individual training and recommendations for each student.
How Are They Executing The Vision?
While we all have a sense of the numerous failures of the traditional offline model of structured education, the online-only experience is no utopia. If you’ve experienced structured online education of any form during the pandemic, be it through school education (for yourself or your kids), college or even a professional course, you know that a completely online model of education is not desirable in the long run. Why is that?
An offline education experience is not only about listening to the lecture or doing homework. It also allows for interaction with a community of peers who are like-minded or at a similar stage in their life/career. Important life skills like relationship-building, emotional-social bond with the teacher, and an understanding of body language are left out in an online-only environment. Furthermore, you miss out on group extracurricular activities or sports, usually facilitated by an educational institution.
The people at Khan Academy, especially Sal Khan, understand this very well. Thus, Khan Academy’s mission is to transform worldwide education outcomes not by replacing in-person education but by supplementing it.
Khan Academy encourages students to use its large pool of learning resources, goal tracking features, and practise modules for extra learning, brushing up specific modules, or to even solve their doubts. (Most of Khan Academy’s courses are still taught by Sal Khan himself, and we both can vouch for his incredible teaching capabilities). The behavioural nudges for learning like badges, points, & rewards along with test-prep resources further enhance the engagement and help drive actual learning outcomes for students.
Furthermore, through its teacher tools, Khan Academy allows teachers to essentially outsource the repetitive elements of the teaching process like lectures and test creation, and double-down on the social-emotional aspects of teaching and act as learning supporters for their students. Teachers are expected to facilitate interaction among the students, balance goal-setting, and customise the learning process for each student.
Another aspect of the platform’s education vision is parent accounts. By helping parents keep a track of the learning outcomes of their children and the ability to customise the coursework, Khan Academy is betting on the student-teacher-parent trinity to optimise the education experience. Parent accounts are also especially relevant in societies like India, where parents take a much more active part in their children’s education.
Khan Academy is betting big on India. With deep educational lags persisting in a country endowed with a powerful demographic dividend of a young populous, the free platform is looking to grab a bite out of $10.4 Bn. (expected by 2025) edtech market in India. Khan Academy is providing vernacular content in Gujarati, Bengali, Telugu, Tamil, Kannada, and even Hinglish. On the teacher-end, the platform has partnered with the large network of Kendra Vidyalayas in India. Over 200,000 teachers from both public and private schools have been registered with the platform, further fuelled by the pandemic.
Speed-Bumps In The Vision
When you provide easy and mass access to quality education, free of cost, not much can hold you back. However, Khan Academy faces several significant hurdles in its educational vision, even with its online-offline model.
The first clear issue is the lack of signalling. Revered educational institutions endow their students with much more than learning and community. The students gain access to the brand of the institution, and thus the inherent signalling benefits that go with them. Learning outcomes achieved through Khan academy, or any edtech or MOOC platform, cannot provide the same benefits and hence, it is difficult to capture the aspirations of the millions of Indian families, who view the signalling effects as a crucial path towards economic mobility.
Another related problem is the lack of payment-based commitment for a free platform. Paying encourages users to engage and optimally utilize a service. This is especially important in the case of education, in which actual learning outcomes matter and not just registration or participation. Add to that the cultural peculiarities of the Indian society, in which paying large sums and struggling to finance children’s education is seen a parental virtue while free education is viewed skeptically. In such scenario, Khan Academy is struggling against for-profit platforms like Byju’s, Unacademy, and White Hat Jr. which are in turn capitalizing on such social peculiarities through their “infamous” marketing campaigns.
Khan Academy is solving for such challenges through its behavioural nudges for driving learning outcomes. Furthermore, the platform aims to add to its Indian test-prep arsenal and appeal to the examination-oriented aspirations of Indian households. Also, according to Sal Khan, the platform may introduce functional or skill-based certifications to solve for the signalling deficit and drive job outcomes of the students.
As a booming tech company with far-reaching ambitions, Khan Academy needs to attract the best talent to drive organisational growth. However, being a non-profit introduces complexities like the lack of ESOPs or the potentially lower compensation packages as compared to other tech majors. However, as we have seen with talent-driven organisations like Teach For India & Central Square Foundation and even non-profit tech companies like Wikipedia, this challenge fades away after a certain funding threshold. Khan Academy counts Elon Musk, Bill Gates (B&G Foundation), Carlos Slim, Google, and even Tata trusts among its long list of donors.
Parting Thoughts
Khan Academy is special for us. During our school days, we both have memories of engaging with the platform to learn more on topics like business, economics, history, and computer science. The quality of engagement was at par or sometimes even better than the rising wave of MOOC platforms at that time including Coursera. We were hooked!
By making education a public good, the platform’s services can go a long way in achieving word wide educational outcomes, albeit with support from governments on providing access to affordable internet. Furthermore, as the edtech ecosystem in India both broadens and gets deeper, there are multiple learnings that for-profit edtech majors and startups can adopt from Khan Academy. If you’re an entrepreneur or investor looking at the edtech space or even open-source business models, we urge you to take a deeper look at this education behemoth.
What We're Watching
In this 2011 TED talk, Sal Khan laid out his vision for driving global education through the internet. 10 years on, Khan Academy is driving the same vision at a much larger and global scale. Watch this video and see how the platform reached product-market fit years before the current edtech boom.
Thought Leaders Speak
In this blog post, James Clear (the author of Atomic Habits) discusses when you should not use the 80/20 rule. Read When the 80/20 Rule Fails: The Downside of Being Effective
In the past week, the entire world has sat up and taken notice of the Gamestop saga in the US. Some are even painting it as a class battle with the small guys taking on the big hedge funds. Read the first interview with the man who started it all.
Tweet of the Week
What We’re Listening To
In this podcast, Rahul Vora, founder and CEO of the $30 a month email app Superhuman, speaks about his experience building and selling his previous company Rapportive to LinkedIn, his journey so far with Superhuman, and his lessons on brand positioning, scaling up the company and finding the right product-market fit.
That's all for this edition! We hope you liked it and would love to get any feedback you may have. This newsletter is written and curated by Mishaal Nathani and Ashutosh Gehlot.
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