Introduction

Salman Khan, MSc and MBA degree holder from Massachusetts Institute of Technology and Harvard Business

School, Harvard University was working as a senior analyst with Wohl Capital Management, a hedge fund based in Boston never thought that his hobby of tutoring would one day become an essential academic element for K-12 students all across the world. In the late 2004, Khan started tutoring his cousin Nadia who was at that time in the seventh grade. After his work finished, he used to tutor her for around 30 minutes with the help of phone and Yahoo Doodle. Success of Nadia made other family members also to ask him to tutor their kids and soon he was teaching several kids from the family.

It was difficult to teach students Math and Science through phone and to make the process more convenient, he started making videos to them which were less than 10 minutes. He was surprised when his cousins told him that videos are more effective for them and they can learn better with the videos. He realised that his students can view videos more than once and can go back to the complex parts times and again until they are clear about it. Since he posted the videos on YouTube, anybody in the world could view them. Soon his videos started getting noticed even though he did not even realise it. He recorded videos from his own apartment and before he could realise, a large number of students were getting benefitted by them.

A popular story that is linked to Khan Academy is that of Bill Gates. Gates’ children found the site for their academic purpose and they were almost glued to it which was well noticed by Bill Gates. In 2010, Gates Foundation granted a sum of $1.5M to Khan Academy so that he could build the site and make it more useful by using some tools. In fact, Fortune Magazine titled him as Bill Gates’ Favourite Teacher.

Challenges faced by Sal khan

With the recognition came several challenges in the journey of Salman’s Khan Academy. It has to be noted that the plain motive of Khan Academy was to tutor kids and not to present any book material in an interactive way. The videos were made to clear the concept and we will be taking this into consideration.

Lack of Resources: In 2009,when Khan left his job for Khan academy there were almost 10,000 students watching video lectures but no fund had been generated. Khan Academy was totally dependent upon Khan’s savings. In the name of assets, the company had one desktop, One screen capturing software and one Pen-Tablet. Faculty of this institution comprised of only Salman Khan himself. Salman Khan persisted with the circumstances and worked on small funding that he received mostly from the parents of his students.

Good time of Khan Academy began when one day a cheque for $10,000 arrived. It was from Ann Doerr, the wife of the venture capitalist John Doerrand after another meeting, Ann Doerr gave him another cheque of $100,000. This was the beginning of his new journey since soon after that Bill Gates noticed his website through his own children watching the videos. Gates Foundation then sent him a grant of $1.5 M which was closely followed by Google’s grant of $2 M and another grant from Gates of $4 M for this great initiative and now there are above 105 full time employees in khan academy.

Wide Criticism from educationists: Khan Academy has faced wide criticism throughout its journey from educationists who found several concepts being wrongly delivered by Salman Khan. As per them, the lectures are delivered unprepared which is a sin in terms of education and one wrong deliverable can lead to a crisis. However, Khan quoted them as being jealous and has been supposed to have replaced the videos with the right ones without any notification. Some have pointed that he rambles a lot many times and does not use visuals effectively. However, others have rationalised it by saying that Khan academy is not or never was a substitute for actual course curriculum. This is only for the purpose of academic support.

Business Model

Khan Academy has a very simple business model since it’s a no-profit model and the whole aim is to help students with educations. The founder, Salman Khan, in one of his interviews was quoted saying that he does not find it right to charge students for education. Khan Academy has over 10 million unique users and over 500 million views on their videos. The funding is mainly carried out through funding and several big names are already attached with them.

Supporters of Khan Academy

• Ann and John Doerr
• Bill and Melinda Gates Foundation
• Google
• Reed Hastings
• Fundação Lemann
• The O’Sullivan Foundation
• Fundación Carlos Slim
• Tata Trusts
• Valhalla Charitable Foundation

Life time Giving

$10,000,000 and above

• Bank of America
• Dan Benton
• Comcast
• Ann and John Doerr
• Bill and Melinda Gates Foundation
• Fundação Lemann

$5,000,000 to $9,999,999

• College Board
• Google
• The O’Sullivan Foundation
• Fundación Carlos Slim
• Valhalla Charitable Foundation
• Windsong Trust

There are 21 other firms who pledged to donate $1000000 to $4999999 annually.

Carlos Slim from the Carlos Slim Foundation in Mexico made a donation for creating Spanish versions of videos

In 2015, AT&T contributed $2.25 million to Khan Academy for mobile versions of the content accessible through apps.

Current Global usage

Khan academy’s first YouTube channel was started in 2006. Now this channel has 6400+ videos and about 1.14 Billion total views. The online channel has over 30 different sub-channels which are available in different languages like English, Spanish, French, Bangla, Urdu, Hindi etc. In an average month, 12 million users visit Khan Academy from across the globe.

How Khan Academy changed the economics of education around the world?

Khan Academy as has been discussed above started with a simple video which gave a mathematics tutorial. Slowly, it became a popular YouTube channel which catered to students from different classes and provided lessons in Mathematics and Science. Although, the videos did not cover the academic syllabus, yet it was quite popular among the children in the USA. The complete platform of Khan Academy has now become a matter of market research interest and changed the economics of education industry at a global level. Khan Academy has always been free of cost and will remain so for as long as Salman Khan is heading it. At the current time, with a global reach of 3.5 million users, Khan Academy can easily adopt several revenue making models, however, it has decided to remain non-commercial.

It’s difficult to comprehend how a model so vast can run on no profits with no intention of making profit or exit in near future. Most of the education based models run either on advertisements or ask for subscription payment. Khan Academy on the other hand, has a series of grants which they are using to revolutionise the education system and making it accessible to each and every student. For Khan Academy, the efforts are not focussed on one particular section of the society since the founder believes good education is as important for an economically weaker student as for a student from well-off family.

Mr Salman has invited teachers around the globe to develop their own content and publish it on Khan Academy, however, everything has to be non-commercialised. Th teachers can also access the analytical tool to better map their courses. Mr Salman has beautifully identified that any model which is based on money making cannot provide the required impact. Ads are a distraction to the student trying to grasp some concept and the subscription based or pay as you go kind of model restrict the access and reach of the model to several students. There are millions of students across the world who do not or cannot pay for any educational service unless their parents agree to or for the reasons such as unaffordability.

So, what have been the economics of using Khan Academy?

• As per the studies by different foundations and the companies, students that use Khan Academy have generally better academic outcome as compared to when they did not.
• It has a reach to more than 10 million students per month.
• The Khan Academy content is currently available in 11 international languages (French, Xhosa, Bangla, Turkish, Urdu, Portuguese, Arabic and Spanish).
• Several developing nations’ education ministries are having thoughts in order to start using Khan Academy in all the schools.
• SRI International conducted a study on Khan Academy and revealed that 65% of the users are from the United States.
• Khan Academy is being considered as an evolving instructional course. Initially video content and the problem sets of Khan Academy had several educational gaps but now, Khan academy is working towards fulfilling these gaps.
• Khan Academy is not only bringing the students alone in the digital education ecosystem, but also bringing teachers in the system. They have provided easy to use user interface for the teachers so that they can help the students with the accurate content.
• Teachers can even use the same videos or modify them in accordance to the intellectual level of their students. They can also manage the students’ data free of cost.

Having brought the model of free education not only enhanced the education quality but also helped several students who are not able to pay heavy fees of the schools to get quality education. A major percentage of schools that have adopted Khan academy tutorials belong to the public schooling system. Moreover, a free model provides a great opportunity for the several developing country governments which look for an effective model at the minimum cost.

Future Potential

Khan academy is starting new programs like:

1. New software launch with partnership of college board for preparation of SAT test (Khan academy claims that there is average of 115 point gain b/w PSAT and Sat which is Twice as much as the average previously)
2. Khan academy is also starting the Free Test Preparation for LSAT’s which cost almost 1000s of dollars for preparationbut can be prepared with the help of khan academy for free
3. Khan academy’s K-12 teachers’ programs has now become very popular among teachers in USA
4. Khan academy is also starting a program which is trying to change the way teaching is done. Khan academy is launching their classroom program in which teachers will say“Let’s try something new” that is teaching not by books teaching by performing tasks and learning concept behind it. This will increase the interest of student in subject, interaction between teachers and student and practical understanding of students in subject.

Khan Academy is not just filling the gaps of education, but is bringing a revolution. Since the beginning, Khan academy has been working towards enhancing learning capabilities of the individuals and soon after it brought teachers and educationists within the model to develop a more integrated and sound platform for comprehensive growth of the student.