Hedge-Fund Analyst Transforms into Internet Video Teacher

Salman Khan's career change had nothing to do with hating his old job. As a hedge-fund analyst, he studied every type of industry -- from railroads to biotech -- and loved it. "People seldom talk about the intellectual side of working at a hedge fund, but it was fascinating," says Khan, who earned an MBA from Harvard before entering the financial world, first in Boston and later in Silicon Valley.

Although he was drawing six figures, and on a fast track toward seven, the money was less important to him than the knowledge. "Always, in the back of my mind I thought 'I want to do something in education,'" Khan says. "I would tell my buddies that I wanted to start my own school."


A Dream Come True

Khan made the wish happen by creating the Khan Academy, an institute devoted to posting free educational videos on the internet. More than 2,100 of his 10-minute videos cover subjects from basic addition to advanced calculus, and from cosmology to the French Revolution. Every lesson is taught by Khan, who quit his hedge-fund job in 2009 to run the nonprofit organization full time.

He seems amused that technology has given one man such vast reach. With a wry smile, Khan introduces himself on the website by saying, "I'm the founder and faculty of the Khan Academy, and we're trying to educate the world."


Big-Time Backers

His ambition and know-how have attracted formidable believers. Last fall, Google donated $2 million to the Khan Academy as part of a project to address global problems, and the Bill and Melinda Gates Foundation chipped in $1.5 million more. Bill Gates, the billionaire founder of Microsoft, has been an especially big fan, telling an NBC interviewer, "It's phenomenal. It's the cutting edge of where education is going."

Gates makes a cameo on the academy's website, saying he uses the lessons himself to brush up on interesting topics. "I see Sal Khan as a pioneer," he says. "It's part of a revolution. Everyone should check it out."

Having Gates, Google and famed Silicon Valley venture capitalist John Doerr supporting him is a little "surreal," says Khan, whose organization, in Mountain View, Calif., operates on a $1 million annual budget. Two employees are being added next month, bringing the total to nine. Of Gates, Khan says, "The first time you meet him, you want to pinch yourself. 'Is this really happening?'"

Laughing, Khan adds, "He's like our head of PR now."

Khan, who lives in a modest home in Mountain View with his wife, Umaima, and their 2-year-old son, has the academic credentials to impress the brightest high-tech luminaries. He earned degrees in mathematics, electrical engineering and computer science at the Massachusetts Institute of Technology before getting his master's in engineering there, then picking up his MBA at Harvard Business School.


Let the Learning Begin

While at Wohl Capital Management in Boston in 2004, Khan began devising tutorials to help a seventh-grade cousin with her math. She was in New Orleans, Khan's hometown, so he did the lessons online, eventually posting them on YouTube for several of his cousins. The lessons quickly drew a larger audience.

Khan transferred west to Wohl's Menlo Park office in 2005 and later jumped to Connective Capital Management in Palo Alto. His wife was working late shifts to complete her medical residency in rheumatology at Stanford University School of Medicine, so Khan filled his nights recording tutorials -- a mission he expanded after giving up his analyst career.

"My job now," he says, "is to learn about everything." Anyone can watch the tutorials at no cost without even registering on the academy's website.


Reaching Out to School Kids

"Sal's passion for helping kids is unbelievable," says Chris Piercy, a director at the nonprofit Lewis Center for Educational Research in Apple Valley, Calif. "What he's doing is filling a huge void for kids who need tutoring help. That is very expensive." The Lewis Center converts Khan's videos into a format that can be viewed in public schools, making the lessons available to about 30,000 students. (Many schools block YouTube to keep students from watching inappropriate material.)

World Possible, a nonprofit group based in San Jose, is expanding the Khan Academy's reach by placing servers in developing nations that do not have internet access. Students in Ethiopia, Sierra Leone and other parts of Africa are watching the videos, as are many of their teachers, says John Walker, a World Possible board member.

"What he's done is really remarkable," Walker says. "It's one of those things where if you have a good idea, and you do it well enough, the world will come to you."


On Hondas and Happiness

For most of a year after he left the hedge fund, Khan lived on savings and his wife's income. At last, he says, the academy is sufficiently flush to pay him, though he chuckles and admits he makes less than a quarter of his old salary. He doesn't care. Khan, who is 34, says he's happier now. With a second child on the way, he and his wife might someday move to a larger home, but they still prefer Hondas to more expensive cars.

"I've never wanted to drive a Ferrari and live in a 5,000-square-foot house," says Khan, who considers it more important that 2 million people a month learn from his lessons. "That number has grown 20-fold over the past nine months," he says. "I hope I can keep making 500 to 1,000 videos a year . . . and live another 50 years. There's no end."

*photo courtesy of Khan Academy

SecondAct contributor David Ferrell is a former Los Angeles Times staff writer and the author of Screwball, a comic baseball novel.

© 2010 Entrepreneur Media, Inc. dba SecondAct

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