♪ emily: imagine a global classroom where anyone can learn anything, anywhere. all built by one man. he got his start as a hedge fund analyst, tutoring his cousin on the side. he posted a few tutorials on youtube that became so popular, he made it his life's work. the khan academy now serves 26 million students, with over 1 million teachers, teaching everything from chemistry to computer programming, from kindergarten to calculus. and the best part is, it is all free. joining me today on "studio 1.0," khan academy founder and

education reinventor, sal khan. thanks so much for being here. it's great to have you . you grew up in louisiana. sal: yes. emily: you were not wealthy, you were not privileged. you were on free school lunches. sal: yeah. my mom raised me and my sister -- i never met my dad, really. she raised us, kind of as a single mother my entire childhood. she had a bunch of odd jobs from managing a local convenience store to, at one point, she was the woman who collected change from the vending machines. emily: you went to public high school, right? sal: we had folks that were headed to four-year colleges. there were some kids who had just been out of juvee. there were a group of kids that were headed to college, too. emily: what did you want to be when you grew up? sal: when i was in high school, i got enamored with the golden age of theoretical physics. this was a science trying to understand the nature of

reality. what's cooler than that? i wanted to be a physicist. emily: you also learned to code, right? sal: we did not have a computer at home. but eventually i got my hands on one of these programmable calculators. i learned that even on the calculator, you could write gained and all of this. i became obsessed with that. i said, with code, you can create reality. that became captivating for me when i got to college. emily: you went to m.i.t. sal: yes. i remember when i went to high school and my guidance counselor said, ok, where are you thinking about applying to? i said m.i.t. he was like, no one has ever gone to m.i.t. from our high school. luckily, things worked out. emily: after all that, how did you end up at a hedge fund? sal: i went to a tech startup actually not too far from where we are right here. i was there for two years. like everyone from 1999, 2000, i was plotting my retirement at age 25. [laughter] then the nasdaq collapses. i remember thinking, ok, maybe i should rethink my future a little bit.

after doing about 40 interviews, i found a place with a guy who's they -- a really incredible mentor and boss. emily: while you are at the hedge fund, you started tutoring your cousin on the side. how did that work? sal: it was 2004. i had just gotten married. it came out in conversation that my cousin nadia was having trouble in math. i started to teach her some algebra. got her a little ahead of her class. then i became what i call a tiger cousin. [laughter] i called her school and said i really think nadia should retake that placement exam from last year. two or three years later, she was taking calculus at the university of new orleans. that was just the first example. i thought there is something here, how many more kids might there be who think there are not good at math but with some intervention, they could just run. emily: how do you end up posting the tutorials, then, on youtube? sal: one thing that got around the family was that free tutoring was going on. so i started working with -- every day after work, i was working with 10 or 15 cousins, family friends, all over the

country. i started writing practice software for them. then, tools for me as their coach or their teacher or their tutor to keep track of what they were doing. one of my friends said this is all cool, sal. why don't you make some of them as youtube videos and upload them? i immediately said it was a horrible idea. youtube is for cats playing piano, not serious math. but i went home that weekend, got over the idea that it was not my idea. i made those videos public. i thought it was only going to be for my cousins. but it wasn't long before it was clear that people who weren't my cousins were watching. emily: so tell me about the moment where you said, "there was a bigger problem here i can solve, maybe this could be my full-time job. maybe this can be my mission." sal: in those early days, when i asked my cousins for feedback, and they famously said they liked me better on youtube than in person. they liked, also, having no judgment. if they have to review something from fourth grade and they were in ninth grade. or if in the middle of the night they were stuck on something, they didn't have to call me or anything, it was just on demand.

then when i started getting letters from people on youtube. some of the initial ones were just simple "thank yous." but then the comments, you know, "this is the reason i was able to pass algebra," "this was the reason why i was able to, after leaving the military, able to go back to college and major in engineering." "this was the reason why my children who have a learning disability are able to engage with their math class." and it was 2008, i set it up as a not-for-profit. by 2009, this was all i was thinking about. my wife and i sat down, and we figured let's give it a shot. it feels like this could be a real organization. i quit my job and tried to see if we could do it for real. emily: was it scary? sal: yes. [laughter] our first son had just been born. we ended up digging into our savings to the tune of about $5000 a month. you almost have to have a somewhat delusionally optimistic mindset. it was the most stressful time of my life. you kind of question your self worth. like, "oh, so what do you do for a living?" [whispers] i make youtube videos. emily: like, not the cats playing pianos, guys.

sal: exactly. so, like, nine or 10 months into it, all of a sudden, we got our first major donation. it was from ann doerr. i immediately e-mailed her -- it was a $10,000 donation. i said thank you so much, this is the most generous donation the khan academy has ever received. if we were a physical school, you would now have a building named after you. and she responded back. she said, well, i love what you're doing. i'd love to hear more. we met and we talked more. she said you have made a lot of progress, but how are supporting yourself? in as proud a way as possible, i said i'm not. she said you really need to be supporting yourself, i've just wired you $100,000. that was a good day. emily: wow. sal: that allowed me to say, wow, maybe i can really do this. emily: and it is still all free. sal: it's all free. that is a free world-class education for anyone, anywhere. that is core to who we are. we have support from the gates foundation, from google, from others to turn into a real organization. let me be clear. it is not just me anymore. we have 80 full-time employees. we have volunteers. it's really a much larger effort than me.

emily: so john and ann doerr, bill gates, reed hastings, google, i know eric schmidt is on the board, how do you get these kinds of people to support you? sal: i mean, a lot of the folks you just mentioned, actually ended up -- they just found themselves using khan academy or they used it with their children. they were able to directly feel the benefit of it. emily: i am curious now. your model is there is no employee equity, right? sal: everyone gets the same stock package that i have. emily: there is not going to be an ipo, right? sal: there is not going to be an ipo, no. emily: at this point, do you worry about making ends meet? sal: we are a strange beast on a lot of levels. where we are, in some ways, we are a high growth tech thing that is reaching millions or hundreds of millions, but at the same time, we are not for profit. we are competing for the top people with google and facebook and dropbox, all of these -- uber -- these hot silicon valley companies, but we aren't able to give the stock packages. we find if you give them a good salary, you give them a good mission, you give them intellectually challenging work,

and then you give them other great people to work around, it naturally feeds on itself. so i feel good about the model, even though it is a bit of a strange model. emily: what about your own financial position? i know you have three kids now. sal: i pinch myself every morning. i feel like i came to terms with this is what i really love doing in life. we can buy a honda accord every eight years. that's all i need as long as i can pursue my passion. we get to dream about what could it be in the future. are we creating the harvard or the oxford of this next stage of civilization that could reach not 1000 or 2000 students a year but could reach a billion students a year? i could not imagine being in a luckier position. emily: you are hanging out with tech billionaires and you are on the same lists as mark zuckerberg, and you know, the same most influential people lists. so i wonder, how do you feel you fit in as an entrepreneur? yet, you know. sal: i do not know. i joke i was the poorest person on the cover of "forbes." [laughter] what is neat about silicon valley is as much wealth as there is here, it is not about

the wealth. what people in silicon valley care about is what are you doing to innovate. what is the thing you're doing that's going to change the world? that is what makes silicon valley silicon valley. emily: what is the myth of sal khan and what is the reality? sal: the daily life. i'm still changing diapers and cleaning burp up off the floor. the other myth is -- sometimes it looks like these things just happen overnight. i don't think i'm speaking just for myself. i think i would be speaking for a lot of folks at silicon valley who've started things. you hear about their success, but they have a string of failures that get swept under the rug. i probably got dinged by 40 foundations when i was trying to get khan academy funded. it is never, kind of, as clean as it looks from the outside. emily: do you think videos can replace learning in a classroom? ♪

emily: you still create most of the videos, don't you?

sal: i still create a large number of videos. it's one of the things that keeps me happy. emily: so how many videos have you made, personally? sal: i think around 4000 videos. most of what we have been investing in is an extension of some of that software that i started with my cousins in 2005. where it's students can go, and they can learn at their own pace, it understands what they know or don't know. partnering with college board to be the official test prep for the new sat. emily: so by some measure, khan academy already is the largest school in the world. one of your investors, yuri milner, says you are the world's first superstar teacher. sal: actually, we view it as a huge responsibility. you can imagine a kid in a village in africa or in a slum in calcutta who gets access to a low-cost phone or tablet device that in five or 10 years will be everywhere. i like to think that for every albert einstein we found, how many of them did we not find? how many got squandered because they didn't learn to read, get an education, etc., etc.? imagine if we could increase by an order of magnitude, by a factor of 10, the number of

albert einsteins in the world. the number of people who can do can cancer research. the number of people who can think about alternative energy. this could be a force multiplier like we have never seen. it is very exciting. emily: do you think videos can replace learning in a classroom? sal: i think if learning in a classroom is about information dissemination, and some of the classrooms we grew up in was about that, videos can do that. in some ways, it is more bite sized, it is more on demand. but i do not think the physical classroom goes away. i think it is a huge opportunity to allow the physical classroom to move up the value chain. if students are able to get their information at their own time and pace, practice and get feed back at their own time and pace, the physical classroom can now be used for real human interaction. emily: critics have said the videos can be repetitive. it's like drilling. sal: i am the last person to force videos on anyone. i will be the first to say i think the videos are the least important part of your education experience. the way i view it is if you need an explanation, it is great to be able to look it up. but the real learning is going

to happen when you engage in exercises. and then when you go into physical classrooms, having dialogue, doing projects, getting feedback from your peers. the teacher can be the human in the child's life and sit next to them and really intervene, get to know them better. figure out not just what the content gaps are, but what are their emotional needs? what is going on at home? there is this whole body of research that says if you have a growth mindset, you realize that your brain is trainable. that if you just push yourself, if you stay out of your comfort zone, you can make yourself "smarter," so to speak. emily: you guys actually have a new classroom that you set up at the khan academy where you are testing a lot of different things. tell me about this. sal: it has always been a dream of mine, even before khan academy existed. wouldn't it be fun to be a mini-dumbledore and experiment with a lot of these ideas? we said we should have a small lab where we can test some of these ideas. where we can test some of these ideas on what could a classroom be. emily: who are these kids, how many kids?

sal: my eldest son is one of the guinea pigs. [laughs] a lot of the kids are khan academy employees' kids. we should live by what we are saying, otherwise we would be hypocrites. so there is that. and we just started, so there are a handful of families letting us experiment on their children. emily: do you think online education is going to replace traditional education or the traditional classroom? ♪

emily: the u.s. spends more than any country in the world on education. $1.3 trillion a year. and yet still, we are 25th in math, 17th in science, 14th in reading. what's wrong? sal: if you went 50 years ago and you said, give me a list of the 10 most innovative companies in the world, maybe 30% would've been american. if you were to do that list now, probably 80% would be american. what i like to think about is how can we bring that spirit of entrepreneurship, that spirit of

failure not being stigmatized, how can we bring that to the schools? the transcript of the future doesn't just need to be your gpa and your test scores, it can be your portfolio of creative works, it can be your peer feedback. being a engineer is a creative endeavor. being a designer is a naturally creative endeavor. show us what you have done. emily: the u.s. is the only developed country with a high percentage of top performers and bottom performers. we live in the heart of innovation in the world, and the public schools in san francisco aren't good at all. what's the problem? why is that? sal: we're living in a world right now that if we don't fix something, we will have a smaller and smaller percentage of people able to participate in this innovation and wealth creation. we lose some of our most creative potential engineers and mathematicians based on how we evaluate them in middle school. you can't solve an exponent when you are 14, we don't think that you can be a doctor. we do not think you can be an engineer. emily: you are tracked so early on. sal: the example of that is looking at a 12-year-old and

saying you can't mix paint, we don't think you can be a painter. or you are not so flexible when you're 12, we don't think you can be a dancer. emily: do you think online education is going to replace traditional education or the traditional classroom in the future? sal: no, not at all. uber could disrupt the cab industry. airbnb might, in some way, disrupt the hotel industry. but i don't think that is going to be the case in education. what i hoped for my own children, i hope they use khan academy and other things to learn at their own time and their pace, but i hope they go to a classroom where they are able to interact with their teachers, have a conversation. not be told to sit still but be told to move around. not told be quiet, but told to discuss and create things. emily: decades from now, will people still be paying thousands of dollars for that m.i.t. degree or that harvard degree? sal: even today, the return on investment, unless you major in a really lucrative field, is a little suspect. if you extrapolate the growth in tuition 10 or 20 years, you have young children as well.

you are looking at -- emily: oh yeah, we started planning for their education. sal: will it be like half a million dollars to send them to college? that is just not feasible. i think over the next five to 10 years, online will be part of a catalyst. there will be other paths. i don't want colleges to go away, but there will be some economic discipline that forces them to hopefully lower tuition as opposed to increase it. emily: have you had any conversations with universities about lowering tuition? sal: i don't think it is as simple as "you should lower tuition." but there are obvious tools at their disposal to drive it just down yet. i do think there are other him and narratives, other options that people can do might be -- have different economic models. that will naturally put pressure. this has nothing to do with online. you have folks like general assembly and these coder schools. they accept students, they don't take any tuition. they train them for a year in something that society needs.

whether it is designers or whatever else. then they say "hey, it will be like a recruiting model. we will take 20% of your first year salary." that is a way to win. you think, "if i get placed, and make six figures, i got a good income." i don't have all the answers, but there are interesting catalysts and things happening that will change things in the next 10 years. emily: is there a government solution here? sal: there is no equivalent for a college degree. but you can imagine a world where even government or some industry consortium can say that if you can prove to us that you know this set of skills at the same level as a college graduate, we will give you a credential. we will give a signal to society that you are employable along these dimensions at a very high level. this is something that even a kid who graduates from stanford or harvard or m.i.t. would want to do. that will be one of those catalysts that could put positive pressure on higher education costs. when you say we will pay $200,000 for a diploma, most

parents and students are thinking, the bulk of that we are paying for is a credential. but universities, if you think about where their resources are going, it is going into something else. it is going into the campus, the landscaping, the whatever else. if you decouple credentials from learning, it allows everyone to compete on the learning side on equal footing and allows a lot of innovation to happen. it allows everyone to kind of aspire for credentials that have equal weight. and i am just daydreaming right now. that could be a pretty powerful way to level the playing field. emily: if the brain is a muscle, and trying harder can lead to better learning, does that mean anyone can be sal khan? anyone can be mark zuckerberg? or is there something innate about great entrepreneurs that can't be learned? sal: i don't know the absolute statement here. i do think that most people on the planet are capable of mastering calculus, are capable of programming a computer, are capable of understanding

genetics or quantum physics. i genuinely believe that. my example is if you went to 400 years back to western europe, you would see that roughly 20% of men and 10% of women were literate, could read. emily: but could anyone start facebook? can anyone start the khan academy? sal: i don't know for sure. some of these things -- mark zuckerberg, with a slightly -- you shift his life a year forward or back, he might not have started facebook. he might have been an engineer at facebook. you shift sal khan's life a year forward or back, instead of growing up in new orleans, if he grew up in calcutta -- you don't know what paths would have been. it has been a combination of they do have a growth mindset, they are people who push themselves to grow and learn new things. but they also had a lot of opportunity. they were in the right places at the right time. and a little dose of luck never hurt. i think a mark zuckerberg would have been successful in anything that he did. i do not know if i can say that everybody could be mark zuckerberg, but i think that are

a lot of people that could be mark zuckerberg who right now think that they can't. emily: what does the classroom look like 10 years from now? 50 years from now? sal: kids are able to create things that 10 or 20 years ago you needed an engineering degree to be able to build. schools will be these maker spaces. it does not have to be technological things. they could be making art, doing poetry, starting businesses, who knows what it might be. emily: what about you? sal: i hope to be doing this until the day that i die, which hopefully is not for another 50 or so years. it might be longer if we hit the singularity like some people think. if i imagine a world in 500 years, i hope khan academy is still around. what do we need to do to make this a 100-year or a 500-year institution that can be reaching billions of students and empowering billions of people? when i go to bed, i think what needs to be done? what is at stake here? and just keep going. but i hope i also keep making videos, too. emily: sal khan, thank you so much for joining us. ♪

♪ francine: it is ranked as one of the top companies, its products are used by two billion people every day. in over five years, paul polman has had a positive impact on the environment. in an exclusive interview, i speak with him about sustainability, cop 21 and what it takes to be a good leader. thank you so much for speaking to bloomberg. there is a lot of talk about spend ability. paul: i'm very confident that we