September 16: The birth of FedEx
September 16: The birth of FedEx
Federal Express (FedEx) began operation in 1971, with 14 Falcon jets servicing 25 cities.
Source: Entrepreneur.com
Published: October 2008
The birth of FedEx
While attending Yale in the 1960s, Fred Smith wrote an economics term paper on the need for reliable overnight delivery. His professor gave him a C and responded: "The concept is interesting and well-formed, but...the idea must be feasible."
Convinced his idea was feasible, Smith decided to take the plunge with $4 million he'd inherited from his father. Federal Express (FedEx) began operation in 1971, with 14 Falcon jets servicing 25 cities.
The company was losing more than $1 million a month by mid-1974. With only $5,000 left in the bank to pay a $24,000 fuel bill, Smith hopped on a plane to Las Vegas. He played blackjack and successfully turned the $5,000 into $27,000.
"The $27,000 wasn't decisive, but it was an omen that things would get better," Smith said about the gamble.
Fast forward to 2021 and FedEx now has a fleet of 682 planes. In 2020 the company had revenue of $69.2 billion.
Also would like to hear from the Professor as to what he/she thinks about the idea now. :)
What a wild story. +1 to Antony's comment, I'd like to learn how it became profitable, and why it didn't work out to start....
Thanks, Danny!