Transcript of Sal Khan: How AI Will Revolutionize Education | E289

This episode of YAP is sponsored in part by Industrius, Kajabi, Indeed, LinkedIn, and Yahoo Finance. Industrius is the leading workplace provider for companies of all sizes and stages. Use code profiting to redeem a free week of co-working at industriusoffice. Com. Kajabi gives you control of your content, brand, and income. Get a free 30-day trial to start your course at kajabi. Com/profiting. Attract, interview, and hire all in one place with Indeed. Get a $75-sponsored job credit at indeed. Com/profiting. Reach top-level decision-makers by advertising on LinkedIn. Go to linkedin. Com/yap for $100 credit on your next campaign. Yahoo Finance is the number one financial destination. For comprehensive financial news and analysis, visit the brand behind every great investor, yahoofinance. Com. As always, you can find all of our amazing deals in the show notes.

When you really peel the onion on almost every one of these problems in the world. It really boils down to some form of education. I do think AI is actually going to have the opposite effect on the skills that we need to develop. It's still an imperative that you should be able to not just let the AI do the work, but you should be better than the AI so that you can manage the AI.

The founder of the Khan Academy. It's a nonprofit organization that offers free educational content online. An education pioneer who hopes to change how young people learn a click at a time.

The education system needs to make sure that students leverage these tools to enhance their own learning. Instead of being the person writing the basic code, you're going to be more of the software architect or the project manager. Instead of being the entry-level writer, the world is going to need more editors, more people who can put things together. When we first got access to GPT-4, we were very excited about what it could do, but we knew that it had some rough spots. It could make up things. It wasn't particularly good at math. Obviously, we were concerned about under-18 users having inappropriate conversations with it. I was pretty bummed. We saw school districts banning ChatGPT, and I was like, Oh, no, this is horrible. The good news, which I couldn't have predicted, was Young and Profitors, welcome to the show.

If you're an avid listener of Young and Profiting podcast, you've probably noticed a lot more AI-centered content. That's by design, because AI is taking us by storm. If we want to be young and profiting, we need to learn how to adapt to AI, we need to be prepared and understand the trends that are happening with AI, and we need to learn how to embrace AI in the now. Today, we're going to be talking about how AI is impacting the future of the education space and the workplace. Our guest today is Sal Khan. Sal Khan is the CEO and founder of the Khan Academy, a free online education platform, as well as a huge YouTube channel with over 8 million subscribers. Khan Academy, if you're a former student, you've probably interacted with it. I know for a fact that the Khan Academy helped me pass calculus in college. So shout out to the Khan Academy and all the work that they do to help students all around the world. And he actually started Khan Academy as a side hustle, which I thought was so interesting, and also as nonprofit. Even to this day, it's generating millions of dollars a year.

It's still a nonprofit. So I was curious about that. We're going to be learning about his side hustle story and how he ended up taking Khan Academy full-time, from a hobby to then a full-fledged, very successful nonprofit business. We're going to ask him why he decided to create a nonprofit and not a for-profit business and some of the myths around running a nonprofit. And then we're going to talk about AI and its impact on education. He's got a new AI bot called Con Amigo on Con Academy. We're going to learn how that's helping students not replace doing the work, but actually supporting their work. Without further ado, Saul, welcome to Young and Profiting podcast.

Thanks for having me.

I was doing research about you, and I was surprised to find out because we all know you as the CEO and founder of the Khan Academy, which I actually used since college. I've been a user of the Khan Academy for a really long time. We know you from this organization, but I found out that you actually were interested in AI early on, and you were thinking about becoming an AI researcher.

I thought we could start there.

Can you first tell us when you first got exposed to AI and how you got interested in the topic?

That's a deep track that you already hit on. It's funny. I'm writing a book called Brave New Words, and it's the very end that I make a confession. I obviously talk a lot about AI and education, and I say at the end, I was like, Hey, I actually wanted to be an AI researcher at one time. So you go all the way back to college. I was a computer science major at MIT. And MIT for a long time has been one of the hubs of AI research. And I intentionally sought out Henry Patrick Winston, who'd wrote the textbook about AI to be my freshman advisor. And I took all of the AI courses, et cetera. And I think for someone who was excited about creating data from Star Trek, the character that sentient robots. The mid to late '90s was not actually a super exciting time in AI. The state of the art wasn't really looking like we were going to get into the realm of science fiction anytime soon. So I decided to do other things. I obviously still was interested in software. I've always been interested in education at the same time, so my path took a different turn.

I love what I call organic entrepreneurship stories. So this little seed of an idea that then evolves into some amazing business, as opposed to starting with a business plan and raising capital, you slowly over time create something amazing. And you did that with the Khan Academy. So can you talk to us about how you started your early career in corporate and then found yourself dabbling in tutoring as a hobby, which led you to create the amazing Khan Academy that we know it today? Can you tell us that story?

Yeah, it's interesting. It almost takes off right from where our last question was, which is, late '90s, '98, I graduated from college and the tech boom was happening. I found out how much you could make as a first-year grad, as a software engineer or product manager. So I move out to the Bay Area, and I do that. I end up going a couple of Startups, this, that, and then the Nasdaq collapses. And I remember when that happened, I told myself, because the startup I was at, we'd grown to 40 or 50 people. Then it becomes like survivor. You're just like, Who gets laid off on any given day or any given a given week. I told myself, You know what? Entreprene just is not for me. I do not have the emotional fortitude for this roller coaster ride. I said, Well, I'm just going to go to business school and figure out what to do with my life. I go to business school while I'm there. I just find, Hey, finance is actually pretty interesting. It's a good combination of quantitative, but it has a huge human element to it. I end up working at a small hedge fund.

It's one of these things. Even though I told myself I wasn't an entrepreneur, that first job at that hedge fund in 2003, it was at a one-person hedge fund. I didn't admit it to it, but I kept gravitating towards these smaller things. But it was while I was doing that, it was a year out of business school. I had just gotten married, 2004, and my family was visiting me from New Orleans, which is where I was born and raised. It just came out of conversation that my 12-year-old cousin Nadia was having trouble with math. I offered to tutor her when she goes back to New Orleans. She agrees it works out. I eventually I got her caught up with her class, a little ahead of her class. At that point, I became what I call a Tiger cousin. I call up her school and I said, I really think Nadia Iman should be able to retake that placement exam from last year. They said, Who are you? And I'm her cousin. And they led her. That same Nadia who who initially was put into a slower track, was put into a more advanced track. Word spreads in the family that free tutoring is going on.

Before I know it, I'm tutoring 10, 15 cousins, family, friends all over the country. Once again, after my day job at the hedge fund, and And by this point, we had moved out to Northern California. A lot of my friends from business school were like, How are you going to monetize this? What's the business plan? I'm like, No, this is not a business. This is a passion project. I'm doing it for my family. But I did start to make tools for them. I did start to write software for them so that they can get practice and so that I, as their tutor, could keep track of what they were doing. My friends would say, What's the business plan? I was like, No business plan. This is just a family project. But it looked suspicious to them because it had software involved and it could scale. And then a friend suggested I make videos for my cousins to scale even more. My cousins famously told me they liked me better on YouTube than in person. What they were saying, I think, it was that they enjoyed having an on-demand version. They didn't have to feel embarrassed.

They could watch it whenever they want. Pause, repeat, double speed, half speed. They still appreciated, I think, having me involved in their lives. But then you could imagine other people started to discover the software, the videos, and it started to be at first hundreds of people, thousands of people. I still told all my friends, No, this is still just a passion project. I still have my day job, which I like. But by 2008, there were about 50 to 100,000 folks using it on a monthly basis, which felt like a large number back then. It's obviously small relative to where Khan Academy is now. But I had, frankly, trouble focusing on my day job. But even then, I resisted. Our first child had just been born. So I did set it up as a nonprofit, Khan Academy Mission Free World Class Education for Anyone, Anywhere. But it took about a year before I finally took the leap, which is never an easy thing to do.

It's so interesting, and I'm smiling ear to ear because it's such an inspiring story. And like I said, it happened so organically. And obviously, what you were doing was so needed in the world because so many people gravitated to these videos. I remember finding those videos when I needed homework help and things like that. But nonprofit organizations, there's a lot of misconceptions and myths around this. To me, it's really interesting that over years, you've stayed a nonprofit when it's so clear that you could have become a for-profit company. Can you talk to us about some of the myths and misconceptions? For example, people think a nonprofit, they're not in the business of necessarily making money, or that it's only volunteers that work at a nonprofit. Can you talk to us about some of those myths?

Yeah, and there's a deep irony here that I even started a nonprofit. When I was in business school, in business school, they really didn't fail anyone out. But they'll tell you privately that you would have failed this class. And the one class that I fell into that category was a class called Social Entreprene. And I was skeptical in my business school days of what some of these nonprofits would do. It felt like they were more around organizing events than actually curing the disease or solving this or that. Obviously, I go work at a hedge fund, which is very for profit. But I noticed a pattern when I talk to these, for the most part, public corporations, is that your capital structure and your board dictate everything. You could have a founder who's very mission-driven, but as soon as they don't have full control, and as soon as you have to start dealing with hedge fund analysts like me who are holding you to the fire on your quarterly earnings, things start to change a little bit. When Khan Academy was this thing, my cousins found it valuable, but even more, I got letters from folks all over the world saying how it was helping them, I started to imagine, Well, what if this thing could one day reach tens or hundreds of millions, one day reach billions of folks, give access to Anyone.

This should exist for a very long time. In the for-profit world, you really didn't see any organizations that stayed true to a mission beyond their founders. I said, Well, what's the structure I should do? Well, maybe nonprofit for-profit. The main differentiators for a nonprofit are that a for-profit has owners, the shareholders, and the board has a fiduciary responsibility to those shareholders to maximize shareholder value. That's their bottom line. A nonprofit has no owners. It's considered a public good. So you own as much of Khan Academy as I own of Khan Academy. We both, neither of us own Khan Academy. And the bottom line, the fiduciary responsibility of the board is the mission, in our case, free world-class education for anyone anywhere. And so for me, at the time, I said, Well, the not-for-profit structure seems to meet this goal of how does it stay true to its mission, regardless of whether I'm there or not? It was delusional. I was just one guy doing this thing. But I was like, What if this does last 50 years or 100 years? How can I stay true to that? The not-for-profit structure seemed to make sense. Now, it opens up a whole other series of questions.

How do you raise capital? How do you attract talent? Et cetera. But that's all that defines a nonprofit. Obviously, our mission has the word free in it, but lots of nonprofits charge plenty. Most universities are nonprofits, but they're happy to charge you $50,000 a year. But that money isn't going to any one individual our owners, it's going to the institution itself. But that was my thinking behind it.

Another misconception is that not-for-profits don't make a lot of money. It's public information. I saw that you guys in 2022 made $53 million or something like that in revenue. But then you also spent $58 million. I also always hear that you want to have a low overhead, not for profit. But that's not actually the case because you need to spend to make an impact, right? So can you talk to us about that?

It's different ways of accounting for overhead. In some ways, we are a bit of a bizarre nonprofit because your classic nonprofits would be, Hey, we want to get mosquito nets to people in Africa. So we're going to raise money, let's say, in places like the United States. And for every dollar we raise, 90 cents of that is going to buy mosquito nets, and then 10 cents of that is for overhead, for the overhead of the organization. We're very different in that We raise money. Most of that money, that budget, the year that you looked at it was in the '50s. Now it's even higher than that, approaching $60 million, $70 million. The great majority of that, it's philanthropic donations of all sizes. Sometimes people are donating as little as $10 a month. And obviously, we have some very large donors who give millions of dollars a year. But we aren't just transferring that money from one party to another. Because of how we operate, we essentially are a tech organization. Our way of attempting to give free world-class education for anyone anywhere is to build tools that cost a lot to build, to your point, cost 50, 60, $70 million a year to build and operate.

But the incremental cost for the next person is pretty close to zero. That's one of the beauties of technology. For that budget of 50, 60, $70 million a year, which is about the budget of a large high school in the United States, we have 160 million something registered users, we reach a large chunk humanity. We're in 50 plus languages. In some ways, you can say that most of that cost it's people, it's software engineers, it's designers, it's content people, it's people going out there to partner with schools. One way you could think about it is it's all going towards the mission because we're building things that then scale. We do have some earned sources of revenue where, say, a district wants to get support and training and things like that, and that costs a good bit on a marginal cost basis. So then we do have to charge some nominal amount just to be able to cover our costs there.

I think a lot of us dream about quitting our 9:00 to 5:00 job and doing good for the world just like you did. And I bet you a lot of listeners right now are in corporate or have day jobs and hoping to become an entrepreneur, and this might have gotten them curious about starting a non-for-profit business. So can you help us understand some considerations and questions we should ask ourselves before we go off and start our own nonprofit organization and become entrepreneurs?

You really have to dig deep and decide what you want to do with your life and how you want to live it. For me, even before Khan Academy existed, I told myself, and I think this was true, I was like, Look, I definitely wanted financial security. But when I really thought about it, if someone transferred a billion dollars into my bank account tomorrow, I wouldn't fight it. But I don't think I would live that differently. I feel like the life that I was already leading, where I live in a 2,500-square-foot house, my family, healthy, knock on wood and happy. We got two cars in the garage. We can go to dinner every now and then and take vacations. I feel like I'm living the life. I don't really need more than that. For me, the optimization is, can I spend my day working on something that I'm really passionate about? It doesn't have to be a not-for-profit. In fact, I think there's many times where a for-profit route does make more sense. Made sense. But for what I was doing and how I wanted to do it, the not-for-profit route made sense. And even that was a huge, huge risk.

I think whenever you're doing anything entrepreneurial, you have to start with some delusional optimism. And then when you take that leap and you quit your job, and I just told you, it took me many years before I quit my job. It took me many years of really playing this project out. You usually realize that the world does not recognize the brilliance of your endeavor as much as you did. So there was a tough time of 8, 9, 10 months where we were living off of savings. As I mentioned, our first child had just been born, where I was questioning whether I had done the right thing. I would say on some level, not-for-profit is harder, especially if you live in Silicon Valley like I do, because no one really saw a pattern there. They didn't see someone start a not-for-profit. As hard as it is to start a successful, let's say, tech company, where, I forgot what the stats are, but something like 80 or 90% fail, I think you probably We see even harsher stats for the not-for-profit realm because there's an active venture capital community that is looking for the next big thing, and they're willing to take flyers on startups.

The philanthropic community, it takes a little bit more time to get that credibility. I would say, really figure out what you want to do, for-profit or nonprofit. I would say, get close to the problem you're trying to solve, maybe even try to solve it. That's what I was doing with my cousins. Once again, whether for-profit or nonprofit, when you see that it's actually solving a problem, then you know you're creating value in the world, hopefully. Then think about how you're going to scale it. Then think about what you need to scale it and go down the appropriate path, whether for-profit or nonprofit.

I love it. Such practical advice. I remember using Khan Academy in college, and it's been such a helpful resource for myself as well as millions of students, and you're truly bringing equity to education. I know one of your goals is to make education accessible to everyone. How do How do you see AI helping to bring more equity to education?

I think all people, especially when we're young and idealistic, we want the world to be a better place. I did that when I was young, and I always used to think about... I'm thinking about myself when I'm in middle school and high school and college, and you see all these problems in the world, whether it is inequity of opportunity, whether it's the climate, whether it is wars, famine. When you really peel the onion on almost every one of these problems in the world, it really boils down to what's going on in people's minds. It really boils down to some form of education. At the same time, I've read a lot of science fiction. I remember one of my favorite is the Foundation series by Isaac Asim off. And in this, the protagonist wants to essentially shorten the Dark Ages. It's a character, Harry Seldon, who's able to predict large-scale historical movements. And he sees that the Galactic Empire is going to enter a 10,000-year Dark Ages, 10,000 years of war and and lost knowledge. And he decides to do something about it by collecting the world's or the galaxy's knowledge on the periphery to shorten that dark ages by 9,000 years.

And when I first read that in seventh grade, I realized you could look at a country or a civilization based on how tall their buildings are or how clean their streets are or the pillars in front of their Supreme Court or whatever it might be. But what really defines a civilization is what's going on in people's minds. If you take a bunch of people who who are enlightened or well-educated and you give them very little in resources, they will start a great society. If you do the opposite and you give people all the pillars and the material wealth, but they don't know how to use it, it all over time deteriorate. So I've always viewed education as that core issue. I'm also the beneficiary of it. My family immigrated to the United States in the early '70s. I was lucky to go to a pretty good public school system in Louisiana, and that's why I'm here. That's why I had the opportunity. But I know there are folks that look a lot like me, probably related to me, probably third or fourth cousins who are sitting in some village in India someplace or in Bangladesh someplace who don't have access to an education, and their potential is going to be squandered.

And so, yeah, this idea of human potential has always fascinated me. I don't want to preach what your framework is for the afterlife. But if, just for fun, you say maybe reincarnation does happen, what can you do in this life that maximizes the benefit for your next life? I think education is one of them because you or I, if reincarnation happens, are much more likely to be born in a village in rural India or Africa than we are in Silicon Valley or New York City.

Let's hold that thought and take a quick break with our sponsors. Young and profiters, they may call me the podcast Princess US, but I'm also the LinkedIn queen. I've been a LinkedIn influencer for six years now, and I teach one of the most popular courses about LinkedIn. And I love to teach sales on LinkedIn because when it comes to B2B sales, LinkedIn has got that on lock. Linkedin is where all the decision-makers are hanging out. There are 180 million senior-level decision-makers on LinkedIn, and 10 million C-suite decision-makers. These people are on LinkedIn, and they're in the They're in the mode to buy. They're using LinkedIn for their buying journey to research vendors or sales reps that they might work with, to look up how to solve their problems, to learn from industry thought leaders. They're in the mode to buy, whereas on other platforms, They're in the mode to be entertained. You want to get them in the right mindset. You want to cut through the noise with LinkedIn ads. In fact, 79% of B2B marketers rate LinkedIn as their top channel for paid media. And LinkedIn has the best targeting because they've got all these different inputs.

People are putting their resume basically up on there. And so there's so many keywords that they can use to target the right decision makers so they can hear about how you solve their problems. And I've got a special gift for all you young improvisers who want to try LinkedIn ads. You can get $100 credit. Linkedin was super generous. If you want to make B2B marketing everything it can be and get $100 credit on your next campaign, go to linkedin. Com/yap, Y-A-P. Again, if you want to claim your credit, go to linkedin. Com/yap. Terms and conditions apply. Yap Bam, we launched Yapp Media four and a half years ago, and that was right when COVID was happening. I love having the freedom of working wherever I want, but to be Honest, I've been getting burnt out from the whole working from home thing. I am sick of it. And although I'm on call to call, I talk to people every day, there's something about face-to-face interaction. I want to feel everyone's vibes. I want to feel the energy of the I knew that something had to change. If I wanted to be my most productive self, I needed to be able to go somewhere to work with other like-minded people.

So I was on a mission to find the best co-working space for me, and I found Industrius. Industrius delivers co-working spaces and flexible office solutions, and they've got everything you would need from private offices and suites to co-working, dedicated desks, and on-demand meeting routes. Industrius has locations all over the world, the US, UK, Australia, you name it. My Favorite thing about Industrius is the community. They have a really friendly staff, first of all. And second of all, all the people that I bump into at Industrius and mingle with seem to be rock stars. They're all entrepreneurs like me, startup founders, solopreneurs who are crushing it. They're smart, they're stylish, and it's just the right energy that you want in a work environment. And as an adult, it's so hard to find a like-minded people and to find your community. If you're an entrepreneur or solopreneur or freelancer and you've been working from home these past few years and you feel like you're in a rut, maybe it's time to start co-working at Industrius. Industrius actually found out that I have a popular podcast, and they gave me a nice gift for my listeners, a free week of co-working to try Industrius yourself.

If you want to give Industrius to try, visit industriusoffice. Com, click Join Now, and use code Profiting to redeem a free week of co-working when you take a tour. Again, that's industriusoffice. Com, click Join Now, and use code Profiting to redeem a free week of co-working when you take a tour. That's industriusoffice. Com com and use code profiting for a free week of co-working. And who knows, maybe we'll bump into each other. Young and profitors. Yap Media is growing so fast. I have 10 open roles just this month. In the past, it would have taken me so long to find hires. I have to go on all these different job sites. I have to create my own skills assessments. That's why I let Indeed do a lot of this heavy lifting for me. Indeed is the powerful hiring platform where I can attract, interview, and hire all in one place. Indeed Indeed has things like skills assessments, where when we have specific roles, we can find an assessment that matches that role and we can make sure they have the skills that we need. Then I can focus on culture fit. I can make sure they're scrappy enough and are obsessed with excellence and do all the things that we need to do for them to fit in at YAP.

And indeed streamlines hiring with powerful tools like Instant Match. An instant match basically matches you with candidates as soon as you put up a job post with people who are qualified right away. It's instant. And the best part is it gets better as you use it. So now when I use Indeed, especially when I'm hiring for similar roles, I get people right away where they know that I'm going to like the candidates because they can see what my preference is were in the past. It gets better as you use it. According to US Indeed data, the moment Indeed sponsors a job, over 80% of employers get candidates whose resumes are a perfect match for the position. It's like waving a magic wand that gets better as you use it. So I love using Indeed. We found a lot of our A players on there. Join more than 3 million businesses worldwide who count on Indeed to hire their next superstar like we do at Yatt Media. Start hiring now with a $75 sponsored job credit to upgrade your job Host at indeed. Com/profiting. Offer is good for a limited time. Claim your $75 sponsored job credit at indeed.

Com/profiting. Again, that's indeed. Com/profiting. And support the show by saying you heard about it on Young and Profiting podcast. Again, it's indeed. Com/profiting to get your $75 credit. Terms and conditions apply. Need to hire? You need Indeed. I found out in the summer of 2022, you got a life Imaging email from the CEO and founder of OpenAI, which is the creators of ChatGPT, and it kicked off a whole slew of events that came next. Can you share that story with us?

I detail this in this book that's coming out, brave new words. I had been keeping track of the AI world just because I'm a bit of a nerd. I said, Maybe it'll have some implication on what happens at Khan Academy. But Sam Altman, Greg Brockman reach out, as you mentioned, summer 2022, and they said, We're doing our next model. They wanted to meet with me and our Chief Learning Officer about it. I'm like, Oh, yeah, sounds interesting. They said, Look, we think this next model is going to excite and also maybe unnerve people because it's so powerful. Because of that, they want to launch with organizations that people trust doing socially positive things that have the technical capability to take advantage of the technology. And by their own words, Khan Academy was the first organization that they thought of. And I was skeptical. I had seen GPT-2, GPT-3. Really cool, but it was nonsensical when you really paid attention to what it was doing. But when they showed me what GPT-4, and no one knew about GPT-4 at this point, no one knew about ChatGPT, which wasn't even built on GPT-4. That was built on GPT-3.5. This was months before any of that happened.

But when I saw, and our team saw, that, wow, this thing seems to actually be able to make sense of things, that you could actually have a conversation with it, that it could actually take on personas. If you think about the whole journey of Khan Academy, from me tutoring Nadia until, let's call it the summer of 2022, it was all about trying to scale using the technologies that existed, that one-to-one personalization experience that I was able to do with Nadia. Obviously, using on-demand video or personalized software, you can only approximate it. But now with AI and what looked like what GPT-4 was capable of, it got that much further. It didn't take us long before we were able to have tutoring interactions with it that were almost indistinguishable from when Nadia and I were instant messaging each other in 2004. And so we were excited. We said, Hey, this could just take it that much further. And then we realized it's not just about tutoring students. It could be about helping teachers with lesson planning and grading and progress reports. Then there could be a whole other class of things that we never even thought of before.

We could have new question types that allow more open-ended responses. We could have simulations being run by the AI. This was one of those moments that I felt that, Okay, this changes everything, but we have to really double or triple down on it.

When AI first came out, I know that a lot of educators were afraid that there was going to be a lot of cheating going on. Can you talk to us about how people first perceived ChatGPT and maybe the ways that you thought that it could actually help the education world?

A lot of people are fearful of AI replacing work and that it's going to enable a lot of cheating and things like that. What would you say to the naysayers?

You can imagine when we first got access to GPT-4, this is August of 2022, we were very excited about what it could do, but it was pretty obvious that it could have some negative use cases. It could be used for cheating. We knew that it had some rough spots. It could make up things. People are calling that hallucinations or fabrications by the AI. It wasn't particularly good at math, which is an issue if you're going to make it tutor. So we had to figure out ways to do that. Obviously, we were concerned about under-18 users having inappropriate conversations with it. How do you handle all these things? We were under an on-disclosure agreement with OpenAI at the time. We couldn't talk about it publicly, but we were having internal debates about, Okay, we can't run away from this technology. It's too powerful, and it can have so much positive. So let's put guardrails. Let's make an AI that doesn't cheat, that provides transparency to teachers and parents, that can actively moderate conversations so that it doesn't allow a student to get into something that's unproductive, that it protects student data privacy, that can really feel like a real tutor.

We were working on all of these things in secret. We were going to launch this on March of 2023 to coincide with the GPT-4 launch. Now, in November, at the end, I think it was the last day of November 2022, ChatGPT comes out. The whole world explodes because of that. I was pretty bummed. I immediately slacked Greg Brockman, who's the President at OpenAI, and I said, Hey, Greg, what's going on here? You have us under this NDA. We can't talk about anything. You just launched something. Greg says, Look, we didn't launch anything. We just put a chat interface on top of GPT 3.5, which had been out for six or seven months at that point. The whole world all of a sudden took note. The reason why I was bummed is this was a thin layer on top of an AI that was not built for education, had none of the guardrails that we were thinking about. And so it was no surprise that the big headlines in December and January of that year were, this is a cheating tool. We started seeing school districts banning ChatGPT. I was like, Oh, no, this is horrible.

They're going to throw out the baby with the bathwater. The good news, which I couldn't have predicted, was by March, when we came out, most of the education system had, to some degree, come full circle. They had said, Look, this technology is going to be a part of students' future, and it's very powerful. So students should learn how to use it. But ChatGPT wasn't built for an education use case. If only someone created a tool that had proper guardrails, proper transparency, proper safety and security, built for education, can't be used as a teaching tool, but can support students, that would be awesome. Then we were able to come with ConMigo, leveraging a more powerful AI, leveraging GPT-4, doing all of that. In some ways, the ChatGPT scare, Prime, We've claimed the world in a good way to be very ready for what we call ConMigo, which is the AI tutor and teaching assistant on Con Academy.

Really interested in ConMigo because I know there's, like you said, the tutoring feature. Can you talk to us about why why tutoring is so powerful for people to learn and why people who get tutoring end up doing a lot better?

In some ways, this is not new news. The oldest best practice for education is to have more personalization, more attention. If we go back 2,300 years and we go back to Alexander the Great's time, Alexander the Great had a pretty good personal tutor. He had Aristotle as his personal tutor. And what Aristotle was is probably able to do with young Alexander is if Alexander was having trouble with, let's say, understanding finance, which you needed to do if you were going to be the future Emperor, I'm sure Aristotle would have slowed down and make sure that Alexander mastered it. Or if young Alexander was just really good at military strategy, then the tutor could speed up or give more challenging exercises to work on. And that's always been the gold standard for education, but it's always been very resources intensive. So the only people who got that were the wealthy young princelings, future emperors, et cetera. You fast forward to about 300 years ago, we had a very utopian idea as a society, which is free mass public education. But there was no way of giving everyone an Aristotle. So instead, we borrowed ideas from the industrial revolution, which was happening at the same time, where, okay, let's bash students together, usually in groups of 25, 30, 35.

Let's move them all together at a set pace, align to some standards. Let's have the teacher there deliver the instruction, assess periodically. Some of the students are going to do pretty well. They are going to go into what we would now consider knowledge economy jobs. Some of the kids are going to be in the middle. They could be the manager at the factories of the industrial revolution or the shopkeepers. Then the students who are really struggling, yeah, well, that's okay. They can be the laborers and the less skilled laborers in some of the factories, et cetera. This model of education that you and I grew up in that we've taken for granted. It's not been what education has always been, but I have to give credit for it. It is what allowed us to give education to everyone. I would have not gotten access to education, if not for public education. So it's done many, many, many good things. But now it's not okay to have a world where only a few, let's say 20% or 30% can participate in the knowledge economy. We need a world where everyone is able to, or as many people as possible, are able to master concepts, get that level personalization.

The good news is that's where technology comes in. Maybe there's ways to scale that. There was an education researcher, Benjamin Blum, who wrote a study about the benefits of tutoring back in 1984, but he framed it as the two Sigma problem. Two Sigma refers to a two standard deviation improvement that he thought tutoring could give. But he called it a problem because there's no way you can afford to do this for everyone. But the power now is you could still have the economics of whatever they are in, say, a public school where there's 25 kids in a room. I would argue the lower the ratio you can get, the better. But that's a public policy budgetary question. But whatever ratio that is, can we now use technology to give more of that personalization that I was able to do for Nadia or that Aristotle was able to do for Alexander the Great.

A lot of people think AI is this thing that's out in the future, and that ChatGPT is really the only accessible AI tool right now. But a lot of companies like yourself are embracing AI. You guys actually released ConMigo as a part of Con Academy. It's basically an AI bot that students can use with and engage with while they're learning.

Can you tell us some of the things that ConMigo can do today?

From the very get-go of Con Academy, Khan Academy. People said, Okay, it's great that Con Academy gives these adaptive exercises, allowing personalization like a tutor. It's great that you have these on-demand videos if a student has trouble understanding a concept. But what if a student has a question? What if they don't understand a term? What if they want to understand how something connects to something else? And we were at a loss. My best answer was, Well, use Khan Academy, ideally in a supported environment. And if a student watches the video, looks at the solution, and still has trouble, maybe they ask a peer, Maybe that's a good time for them to raise their hand and the teacher can do a more focused intervention with that student. That is how it's been used. We've had really good efficacy studies there. But we said, Well, now the AI could be there on top of the video, on top of the exercise to answer folks' questions. We then also realized, but it could do more than that. What if it could act as a simulation of a historical character or a literary character? So it can really act as a way to engage and immerse students in something.

The more you're engaged, the deeper you're going to understand it. What if students can have debates with the AI, where the AI takes one side of the issue and the student takes the other? So we started realizing, in fact, even today, every hour we spend more brainstorming, we realize that we're being too narrow in our thinking, that this We didn't really do things that I wasn't willing to do for Nadia. I wasn't willing to pretend to be Harriet Tubman for a day and do a simulation with her, but that's not possible. And we're also doing things like writing stories where the AI won't do it for the student, but it can support the student in their writing. We're working on methods for a teacher to be able to work with the AI to develop, say, an assignment, say, a writing assignment, create the rubric, then assign it through the AI. The AI won't cheat, it won't do it for it, but it can act as a writing coach, giving feedback, highlighting parts of it. Then when the student feels good about it, the AI can submit it to the teacher. Not only will that student be more supported, the teacher will be more supported.

Actually, they can feel more confident that the student didn't cheat because the AI can not just give the paper, it can give the entire process. Yeah, we spent four hours working on it together. Here's the whole transcript. And by the way, out of your class of 30, 20 of your students had trouble with a thesis statement. And here's what I recommend teacher that we can do to help them on this. And here's a preliminary a grade. So we think it can really support students better in a whole... It's not just in math, not just in science. It could be in writing, it could be in reading, comprehension, and also, hopefully, saving teachers some time as well.

This is really interesting because a lot of the times when we're thinking about AI, we're thinking about how it replaces something. But this is really all about how it's supporting students. How do you think that this could also translate in the workplace or in the private sector?

It is a big big interesting question on what AI is going to do to the labor force broadly. I think the meme that has been going around over the last year, year and a half has been, you won't get replaced by an AI, you're going to get replaced by a human using an AI. And so I think the imperative is that almost in any industry, if you learn to leverage these tools to be more productive, you're going to be in a good place and maybe be more productive in more domains as well. I think that's where the education system needs to make sure that students can leverage these tools, one, to enhance their own learning. At the end of the day, people say how AI can do writing well, how it can do software engineering well. The reality is you're still going to need people to be able to put those pieces together. Instead of being the person writing the basic code, you're going to be more of the software architect or the project manager. Instead of being the entry-level writer, the world is going to need more editors, more people who can put things together.

But no one wants an editor or a software architect who can't write or code as well as the junior writers or the junior software engineers. I think it's still an imperative for people to learn their traditional academic skills. It's in fact, maybe better than in the past, and maybe the AI can help there, and then be able to leverage these tools in whatever they're actually doing.

I know one thing that you talked about in your book is how AI can potentially supercharge human creativity. Can you talk to us about some ways that you imagine it can do that?

This is the other fear that folks have. I mean, I could go on to any of these generative AIs and say, Hey, write a screenplay for me, or create an art piece in the style of whatever and it'll bam, it was just there. And so everyone's afraid like, Oh, my God, this is the end of creativity. I'll say a couple of things. One, this isn't the first time in history something like this has happened. And I write about this in my book, Brave New Words. In the 19th century, when the camera came out, I am Sure, a lot of portrait artists said, Oh, my God, this is cheating. This thing, you just press a button and it does essentially a real-life picture of it, but all the artistry is gone. Now, we know on one level that didn't happen. Maybe the people hiring a portrait artist to paint a portrait of them, maybe that market has declined a little bit because of the camera, but it didn't get rid of creativity. In fact, a whole new field, a new creative field, not only existed, but it democratized art in some ways where more people could do artistic things.

I think you're going to see something very similar happening with AI. The other thing I emphasize is, creativity isn't a zero-sum game. It's not that, let's say, you and I, let's consider ourselves creative people. Each of us by ourselves can be reasonably creative. But if you and I are able to chat about things and brainstorm together and rift together, I think we're each going to become more creative, not less. I'm not just going to say, Oh, Hala has got good ideas. I'm I'm just going to check out. I'm going to say, Oh, I love Hala's idea there. Well, what if we did this, too? I think any of us who consider ourselves reasonably creative recognize that our most creative times in our life were when we were around other creative people. I think AI is going to democratize that, where there could be a young girl in Afghanistan someplace, and she's not even allowed to go to school, but if she has access to this, she could brainstorm, she could rift ideas, she could test ideas. Now, it'll be even better if it could be with the AI and other people around, but you might not have that.

I think AI is going to actually be an enhancer for creativity. I also think it's going to lower... I didn't even allow myself to think that I might be able to become a filmmaker one day. I was like, Who gets to make a film? They cost tens, if not hundreds of millions of dollars. You got to know the right people, et cetera, et cetera. But now AI is going to make that much more accessible where you can start to do movie quality production for a hundredth or a thousandth of the cost that you might have before. Now, once again, I don't think it's going to put creatives out of work. It's going to allow more people to have creative expression and that the good stuff is going to surface. In fact, it's a lot like podcasts or YouTube. These were both democratizing. And yeah, they have in some ways threatened the traditional media establishment, but they've been good overall because there's a lot of creative people who couldn't break into the traditional media establishment before, but now they can self-publish on a podcast or self-publish on YouTube, and the world discovers them.

We'll be right back after a quick break from our sponsors. Young and profiters, as you may know, I launched my LinkedIn Secrets Masterclass a little bit over a year ago. It was my first course. And so far, I've generated well over $500,000. And The best part is I didn't have to figure out how to set up my mastermind subscription, how to do abandoned cart targeting, and all of that tech geeky stuff. I just left that all to Shopify. Shopify is the global commerce platform that helps you sell at every stage of your business. And if you're in that, I need to sell more with less stage, Shopify Magic is your AI-superpowered sidekick ready to whip up captivating content that converts. And it doesn't matter if you're selling digital products or vegan cosmetics. Shopify helps you sell anything anywhere, from their all-in-one e-commerce platform to their in-person POS system. Stop those online window shoppers in their tracks and turn them into loyal customers with the internet's best converting I'm talking 36% better on average compared to the other options out there. It's no wonder Shopify powers 10% of all e-commerce in the US, including huge global brands like All Birds and Thrive Cosmetics.

It took me a day to set up my Shopify store. I set up chat, took two minutes, and I was done. One month from thinking of the idea to implementation, a year later, I've made half a million dollars on the idea. That's what it takes in 2024, just a good idea. And then utilizing a platform like Shopify that can help you make it a reality. There is no excuse these days. If you got a good business idea and you think you'll be a good entrepreneur, you don't have to wait any longer. You don't have to be super techy, and you never have to worry about figuring it out on your own. Shopify's award-winning help is there to support your success every step of the way. Sign up for a $1 per month trial period at Shopify. Com/profiting. That's all lowercase. Go to Shopify. Com/profiting now to to grow your business no matter what stage you're in. Shopify. Com/profiting. Young in profitors, we are all making money. But is your money hustling for you? Meaning, are you investing? Putting your savings in the bank is just doing you a total disservice. You got to beat inflation.

I've been investing heavily for years. I've got an eTrade account, I've got a Robin hood account, and it used to be such a pain to manage all of my accounts. I'd hop from platform to platform. I'd always forget my Fidelity password, and then I have to reset my password. I knew that needed to change because I need to keep track of all my stuff. Everything got better once I started using Yahoo Finance, the sponsor of today's episode. You can securely link up all of your investment accounts in Yahoo Finance for one unified view of your wealth. They've got stock analyst ratings. They have independent research. I can customize charts and choose what metrics I want to display for all my stocks so I can make the best decisions. I can even dig into financial statements and balance sheets of the companies that I'm curious about. Whether you're a seasoned investor or looking for that extra guidance, Yahoo Finance gives you all the tools and data you need in one place. For comprehensive financial news and analysis, visit the brand behind every great investor, yahoofinance. Com, the number one financial destination, yahofinance. Com. That's yahoofinance. Com.

I want to read a quote from your book that's really related to this. You say, The best ideas will come not from the AI creating for us, but when the AI is creating and ripping with us. Much like poets hanging out in a café in Paris, humans and AI can augment each other and inspire a mutually creative process.

I loved that.

I know that entrepreneurs also have to be super creative. What opportunities do you think that AI is going to bring for entrepreneurs?

I think if I wasn't looking to start it, and whenever I talk to young people, I've got a lot of ideas for businesses that I don't have the time to work on. Ai is such a general and transformative technology. It's very tempting for people to get enamored with the technology itself and just want to make a better AI. I think that's going to be a game for about six or seven big players are going to be working on that, like hardcore R&D. But the real opportunity, I think, especially for new entrepreneurs, is go into any field that you have an interest in and get to know that field well. And Then think about how you could leverage things like generative AI to create products for that field. Probably the further that field is away from technology, the more opportunity there will be. Let's just imagine I'm thinking of something that is very far removed from technology. Let's say that you are a farmer. A farmer, right? If you understood all of the tasks that a farmer does, I'm sure a lot of it is around like, Oh, I got to order the seeds. I got to look at the weather.

I have to use the weather to figure out this. I have to then go and negotiate with these people for whatever my fuel costs. Okay, could you potentially, the same way that Conmigo is doing that for teachers, where we're helping them with lesson planning, we're helping them with grading papers, we're helping them with writing progress reports, are there tasks like that that farmers are spending 10 hours a week doing? Automate that. You'll be the only, I probably, I guess maybe more than one person might hear this idea, but it's not going to a crowded space. If you're out there in the next couple of years creating the farming management system using AI, you might get a lot of traction. It might even be more powerful. You might even be able to use generative AI. Maybe the generative AI can read the newspaper or recommend to you which crops to plant so that it improves your yield, it improves the market prices that you're able to get, or your ability to market into the distributors or whatever else. You just threw out a random industry, farming. But You can see that there's probably a lot there that it's not as obvious.

But if you take these really powerful tools, there's probably an opportunity. Just get to know a space deeply and start making stuff. If you start to see that there's value being created and getting traction, then I think there's going to be people who want to invest in it.

I noticed that you've been saying a lot, get specialized in one area. Why do you feel so strongly about getting specialized in one area in preparation for the AI revolution?

I'll say it I would say, especially if you're an entrepreneur, I would say get to know an industry well, but not to necessarily be narrow in your skills. I think, if anything, get to know an industry well will allow you to make tools for that industry that actually create value for the people in the industry. So that's why you should know that. But I do think AI is actually going to have the opposite effect on the skills that we need to develop. I think the time where you say, I am only a software tester, I am only a designer. I only a technical writer, I think that's a very troubling mindset because the AI is going to allow you to do more and more of the pieces. I thought it was funny, this whole Screenwriters Guild strike that happened many months ago in Hollywood, where They were negotiating with the studios to say, You are not allowed to use generative AI to write screenplays. I think the Screenwriters guild had a too overly narrow view of it. It should actually be the other way around because today, A really good screenwriter, a screenplay writer, has a great sense of story, creativity.

They write a screenplay, and if they're lucky, someone's going to take it up and produce it. They might get paid, I don't know, at best, tens or hundreds of thousands of dollars for that screenplay. And then $100 million is going to be spent on that movie. And then if it's successful, it's going to generate hundreds of millions or billions of dollars. The screenplay writer who actually created the story, they get a very small cut. In the future, let's say five years, 10 years in the future, not that far, if If you are really good screenplay writers, you don't have to stop at the screenplay. You'll be able to create the whole movie with the help of AI. In order to do that, though, you're going to have the tools to be able to create the scenes, do that, but you have to be more of a generalist. You're going to have to think about the business, the distribution, et cetera, et et cetera. But all of the tools are going to be at your disposal. I would say, get to know an industry well so that you can help people in that industry, but broaden your own skillset so that you can manage the AI to do more and more pieces of the puzzle.

Are there Any specific skills that you feel are going to become more and more important to have?

I've always been a little bit of a traditional... Even when things like Google came out, a lot of people would say, Oh, well, kids don't have to know their facts anymore. They don't even have to know math anymore because there's calculators. I've always disagreed with that because it's very useful to have that on demand in your mind, and it allows you to form connections and see patterns in the world that if you don't know those facts, if you don't have those skills, if you can't have that numeracy, you're just not going to see. It also, even in the world of pre-AI in the internet, someone with a knowledge of history is going to be able to make much better web searches about history than someone without a knowledge of history. I think the same thing is true now with AI. For my own kids, for everyone I know, it's even more imperative that you should be able to not just check out and let the AI do the work, but you should be better than the AI so that you can manage the AI. The three R's, which has always bothered me because arithmetic does not start with an R, but reading, writing, and arithmetic, I guess.

Plus things like oral communication, I think is going to be more and more important because people don't even know where that written communication came from, being able to manage relationships. This We mentioned about creativity. I think creativity is going to be king because in the past, creativity has been bottlenecked by gatekeepers. As we said, the internet has helped, YouTube has helped, podcasting has helped, but now AI is going to be the ultimate opening of the gates where anyone is going to be able to find creative expression.

Something else that you wrote in your book is that AI could revolutionize the way that we actually hire people. Can you talk about how hiring can change?

Yeah, and this is a sensitive topic because When people imagine dystopian scenarios for AIs, one of them, they imagine, Oh, people are going to use AIs to look at resumes. And then what if the AIs have biases and no one knows about it? All of a sudden, the AIs are distorting the world. And the European Union, in fact, some of the early regulations have explicitly called out, Hey, don't use this for hiring, et cetera, et cetera. The point I make in the book is there's nothing that's going to be bias-free. And in fact, there are some biases you want. If I'm hiring someone, I have a bias towards people who are going to show up on time. I have a bias towards people who are going to be pleasant to work with, who aren't going to yell at people, who are open-minded. Those are positive biases. Now, it should not bias on gender or race or religion or or age. Those are the ones you have to watch out for. And what I argue in the book is no AI system is going to be perfect, but you shouldn't measure against perfection. You should measure against the status quo.

And I can guarantee you that the human beings who are right now looking through stacks of resumes and interviewing people are incredibly biased. You can do bias training and all of that stuff. But at the end of the day, they've been studies where people are looking at the same resume at 5:00 PM, they have a different point of view than when they look at it in the morning and they're fresh. What's interesting about AI is it can give more energy to the process than most human beings can. Most jobs at Khan Academy, for every job opening, we get 100 or 200 resumes. Our screeners, at best, filter it down to about 20 people that they'll interview. When they're looking at those 200, and we have 30 open job openings, so they're having to sift through 3,000. There's no way that they can spend more than 10 of seconds per resume. They're indexing on just a few keywords, this, that, and then moving on. We're probably losing a lot of great talent. If AI could, one, make sure we're getting a deeper look at more of them, and then AI can also be audited in ways that a human being can't.

I can't go to one of our hiring managers and, I don't even have the bandwidth to do this, where we give them 10 equal resumes, but different genders, ages, ethnicities, religions, whatever, and see whether they are statistically equal through our process. That's very hard to do. But you could do that with an AI. In fact, you could use AI to generate these statistically equivalent resumes and then filter them in to scale thousands or millions to see how the AI evaluator evaluates them and says, Okay, at least on that dimension, it does not seem to have a bias. For sure, it's a better bias than what human beings have. I actually think this used well, it's going to be a chance to go deeper and richer. But the only way we're going to have a chance to use it is people don't hold it to too high of a standard. The standard really should be, is it better than the status quo and can we measure it? Because nothing's going to be perfect.

So interesting. Well, thank you so much, Sal. I always end my interviews with two last questions that I ask all my guests. You don't have to relate it to the topic of the episode. The first one is, what is one actionable thing our young improvisers can do today to become more profitable tomorrow?

The one thing I would do is start understanding problems in the world that you might discover you can solve and then use whatever tools at your disposal. We've talked a lot about AI. Ai might be part of it. In fact, I suspect it will be part of it, but it could be something very easy, too. It does not have to be technology for technology's sake. But if you know a space well and you start solving problems and you have traction with that, then I think you're off to the races.

What is your secret to profiting in life in this can go beyond business and financial?

I think it's very important, and you change as you get older and you realize things, but audit what's important to you, what's truly important to you, versus what you think is important to you, what your family is projecting onto you, what your friends are projecting onto you. We all remember being in college and you have these late-night conversations out in the hallway in your dorm room and everyone's saying, Oh, if I only had a million dollars or a billion dollars, I would do this, I would do that. And now I have friends who have actually made their tens of millions or hundreds of millions or billions of dollars. But some of them are pursuing their passions, but a lot of them have forgotten what they got into it in the first place. Or they might not fully appreciate that at some point, once you have your financial security, that actually the most valuable thing... I mean, I remind myself this every day when I'm working extra hours or I'm like, Wow, I have a limited amount of time on this planet. I have a limited amount of time with my wife, with my kids. I have to embrace that.

I have to really enjoy I have to put energy, at least as much energy as I put behind work, arguably more energy, to make sure that I get the most out of that and they get the most out of it. I think it's just, yeah, really auditing what you care about. I'd argue in most cases, not to be judgmental, but I think money matters. You need to get to a level of security. But once you get to that level of security, the number one things, or actually even before that level of security, the number one things are always your health and your relationships. The money can help give security to your health and relationships sometimes. But after a certain point, that's what I think most people should be optimizing for.

I think that's really good advice. Where can everybody learn more about you and everything that you do?

I'm all over the internet. Obviously, anyone can do a web search for Khan Academy, find those resources. The second book, the first one was One World Schoolhouse, this new book, brave new words about generative AI and Education and Work, coming out. People can do a search on that. And there's plenty of me on YouTube.

Yeah. So he's really easy to find. We'll stick all the links in the show notes. Thank you so much for joining us on Young and Profiting podcast.

Thanks for having me, Ala.

I love speaking with entrepreneurs like Sal Khan, who have made such a big splash in the nonprofit space, because we don't hear about that often. And I never think about entrepreneurs being in a nonprofit, but it totally works. And you can totally have a huge It's a huge innovative company that makes a lot of money and you can make a great living by running a nonprofit while also doing something you feel passionate about. That's just so cool. I love this conversation. I also found Sal's own passion for human potential to be really contagious. It was fascinating to hear what it was like for him to be able to kick the tires on ChatGPT in the early days before any of us had access. We tend to think of AI now as something that will help students by doing their work the work for them. But Sal and his team saw AI, and they saw that it could revolutionize teaching by helping students, not doing the work for them, by helping them work through problems. Sal was also optimistic about how AI will help us unleash creativity across the board among students and professionals alike. In the same way that podcast, social media, and YouTube have democratized content and fueled a new generation of creatives, AI may supercharge that productivity, providing additional ways to succeed in the future.

Entrepreneurs could be extremely well placed to benefit from this revolution, according to Sal. After all, we entrepreneurs are by nature generalists and creatives. We have many different skill sets, and we Excel at putting resources together to create value. And the more you broaden your own skills and learn to incorporate AI in everything that you do, the better placed you'll be to ride this AI wave in the future rather than sink beneath it. Thanks for listening to this episode of Young and Profiting podcast. We'd love you to help this podcast ride into the future, too. Every time you listen and enjoy an episode, please share it with your friends and family. Spread our podcast by word of mouth. And if you did enjoy this show and you learned something new, then please drop us a five-star review on Apple podcast. It just takes a couple of minutes, and it's the number one way to thank us. Apple podcast, Spotify, wherever you drop a review, I'd love to read it. And if you prefer to watch your podcast as videos, you can find us on YouTube. Just look up Young and Profiting, and you'll find all of our episodes published on there.

You can also find me on Instagram or on LinkedIn by searching my name. It's Hala Taha. I did also want to shout out my amazing production team. I am so grateful for all that you do. And today, I want to give a special shout out to Maxi, our audio engineer. He's been doing such a great job. I appreciate all the hustle that he puts into his job. So just thank you for all that you do, Maxi. And thanks to the whole team, I've got the best team in the world. This is your host, Halataha, AKA the Podcast Princess, signing off..