To Grow a Big Business, Place Smart Little Bets, with Salman Khan | Big Think

You rewind, geez, it's over ten years now. I was a newly minted MBA and my background was in tech, but I found myself an analyst at a small hedge fund in Boston. I had some family visiting me, in particular one member, my 12-year-old cousin, Nadia. It just came out in conversation that she was having trouble with math.

So, I dug a little bit deeper, and it turned out that she had taken a placement test at the end of sixth grade; there was a lot of unit conversion on it. She claimed she didn't understand unit conversion, and because of that, they put her into a slower math track. When I heard that, I said, "Hey Nadia, how about when you go back home," she lived in New Orleans, which is where I was born and raised, "I can tutor you over the phone or over instant messenger or something." And she agreed, so I started tutoring her. This was fall of 2004.

Long story short, she learned unit conversion. Then, I started to teach her a little bit more; I started to teach her some algebra. She actually went from being behind her class to being ahead of her class. I joke that at that point, I became a tiger cousin, and I called up her school and said, "I think Nadia Ramon should retake that placement exam." They asked, "Who are you?" I replied, "I'm her cousin." So, they let her.

She went from the slower math class all the way to the advanced math class. There’s something here; this was a small intervention just for a few weeks with someone I cared about. I then started working with her younger brothers. Fast forward two years—two things happened. One, word got around in the family that free tutoring was going on. I found myself with ten or 15 cousins and family friends every day after work around the country. I was getting on conference calls with them and whatnot.

I also started building software for them to ensure that they had strong foundations in things like basic arithmetic, fractions, decimals, and exponents. The software I was making for them provided as much practice as they needed, solutions, and a way for me, as their tutor, to keep track of what they were doing. That was the first incarnation of Khan Academy. That's when I got the domain name KhanAcademy.org. At that point, it had absolutely nothing to do with videos.

Even then, I viewed this as a hobby; I was kind of running this website. It was fun for me to hack on this software. Fast forward a little bit more, and around 2008, I started thinking this is a real thing. I’m sleeping, and there’s some kid in Indonesia who is learning algebra. There’s something real here; a real need is being met. I wasn't sure whether there was a business model here. In fact, I didn't want there to be one. I wanted people to understand that this is something that’s social good; it's something that should just be out there, a public good for the planet.

In the early days of Khan Academy, I said, "One, I'm doing this not because I want it to be a business. I'm doing this because I think it could be a huge social good for the planet." I wanted to do it in a way that is, for lack of a better word, unkillable. It almost annoyed my MBA friends when they said, "Hey Sal, you're doing all this stuff, what's your business model? Surely you have a business model?" I was like, "No, no, I'm just doing it for fun."

They wanted to push me, like, "Hey – some of them almost didn’t want me to do it, kind of like why is this guy doing his thing if it didn't have some obvious two-year exit strategy type of model?" But I think it really worked well for me, for my mindset and for Khan Academy, to just keep going, keep making content, being scrappy about it, doing whatever it took. At some point, it hits the traction, and you start growing a lot faster.

To the outside world, it looks like an overnight success, but you know the real story. This idea at Khan Academy—one of our designers introduced this idea, this notion of little bets. If you can, you know, working with Nadia, that was a little bet. I was betting half an hour a day, and actually, it was going to be a win even if it didn't scale into some huge global nonprofit organization reaching millions. Even that little bet benefited my cousin, and I cared that she went on a good trajectory.

In whatever space you're in, it doesn't hurt; in fact, there are definitely people who don't do a little experimentation, and they hit some traction and they get huge. But it never hurts to really understand the problem, do it in a more narrowly scoped, understandable way, and see if some of your hypotheses about this space are actually true.

Once you start getting validation of these hypotheses, then yeah, as they say, nail it and then scale it. You don't have to wait for it to be completely nailed, but once you feel that, hey, I'm getting some validation here—enough for me to invest more—then you keep investing more, get more validation, and keep going.