How FedEx Started | Funding a Company with Blackjack Earnings

In 1965, Frederick Smith wrote a term
paper at Yale University that challenged air freight shippers who relied on
passenger route systems for shipments. He thought to himself, why isn’t there a
system that is specifically designed for shipping time-sensitive products. He
actually wrote the paper last second before it was due, and the professor
thought it was pretty average, so he received a “C” as his grade. He shelved
the idea, and he started to work with Arkansas aviation sales where he noticed
there was a huge problem in shipments that took one to two days. He then
decided to do something about it, and in 1973 he started the Federal Express with
14 small planes in Memphis, Tennessee. He named it Federal Express because he
believed it was patriotic and it expressed an interest in economic
activity across the country. The first two years were extremely tough, and
because of high rising oil prices, FedEx found itself millions of dollars in
debt and on the brink of bankruptcy. They were going through extremes to keep this
company alive. They were leveraging uncashed paychecks, and pilots were
paying for gas with their personal credit cards. At one point, they had
$5,000 left in their bank and so what does Frederick Smith do? He impulsively
flies to Las Vegas and plays blackjack with the rest of the company money. He
came back with $27,000 which was just enough to keep them afloat for the next
week! He was motivated though, and he quickly raised another 11 million to
financially stabilize the company. It took them over two years to receive
their first profit, and in less than 10 years they were already making 1 billion
in revenue. They continued with their steady growth and today FedEx is worth
$52.3 billion dollars and has the largest all cargo of air fleet
and ships. They ship more than 9 million packages a day. And that’s how
FedEx was started. Thank you for watching my video. If you enjoyed it, please
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2 thoughts on “How FedEx Started | Funding a Company with Blackjack Earnings

  1. Fed Ex! I can a visit from them at least once a week. The driver likes to toss my packages over the gate. I've told them to push the call button because most of the time I work from home for our business! Ugh! But I have to give it to them because they don't play! During the Christmas holidays I've had them deliver packages as late at 11 PM!

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