In August 2004, Sal Khan began remotely tutoring his cousin, Nadia, who was struggling with “unit conversion”. This “swiss-cheese” gap in her knowledge was not allowing her to be placed in the more advanced Math track. Since Nadia was in New Orleans and Sal was in Boston working at a hedge fund at that time, Sal started tutoring her via telephone and Yahoo Doodle after work. As Nadia improved in math class, Sal began tutoring her brothers Arman and Ali. Eventually, word got around and he was tutoring a handful of his cousins and family members. Scheduling became a real issue and Sal started recording videos and posting them on YouTube in 2006 so everyone could watch on their own. More and more people kept watching, and Sal has continued to make videos ever since.
The organization was incorporated as a 501c(3) non-profit in 2008. Sal continued to work on Khan Academy during his spare time until the fall of 2009, when he quit his hedge fund job and decided to pursue the endeavor full-time. He lived off of his savings for the first 9 months until he received his first significant donation from Ann Doerr. In September 2010, Khan Academy received large grants from Google ($2 million) and the Bill and Melinda Gates foundation ($1.5 million) and began to build out an organization. Sal called on Shantanu Sinha from McKinsey & Company to join as President & COO. They were former high-school math competitors in New Orleans, freshman-year roommates at MIT, and long-time friends. They immediately hired Ben Kamens and Jason Rosoff both from Fog Creek Software to head up software development and design. The small team moved into office space in October 2010.
See Sal talk about how he got started in his TED talk.