I took a plane to Las Vegas
Don't try this at home, kids.
Frederick W. Smith, the founder of FedEx, died last month at the age of 80. Smith was a highly successful entrepreneur. Maybe more important, he might very well have been the luckiest.
Here’s a very early story that proves the point. It comes to us courtesy of Roger Frock, who was the first general manager and chief operating officer of FedEx (then known as Federal Express), and who later wrote a book about his time at the company.
FedEx launched in Memphis on April 17, 1973. Soon afterward, the company was nearly broke according to Frock, owing much more than it had to pay for fuel to continue operations.
After a last-ditch financing effort fell through, Frock said he learned Smith had taken an unorthodox approach to handling the cash problem. As Frock wrote in Changing How the World Does Business: FedEx’s Incredible Journey to Success:
“I asked Fred where the funds had come from, and he responded, ‘The meeting with the General Dynamics board was a bust and I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.’
I said, ‘You mean you took our last $5,000— how could you do that?’
He shrugged his shoulders and said, ‘What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.’
Fred’s luck held again. It was not much, but it came at a critical time and kept us in business for another week.”
Kids, don’t try this at home.
For one thing, is it legal to take company funds on a gambling trip to Las Vegas? I’ll refrain from attempting to answer that here out of respect for the recently departed.
But, I think Smith’s story provides a great context for the age-old question of whether it’s better to be lucky or good in business.
Smith was clearly both:
Good? Smith famously based the entire idea for FedEx on a term paper he wrote at Yale University in 1965. He revolutionized the industry and built FedEx into a $50 billion company by the time he stepped down as CEO in 2022.
Lucky? Even setting aside the whole “kept the company going with blackjack” story, or the Warren Buffett-esque recognition that simply being born in the United States in the 20th century was a huge advantage, Smith was wounded twice in Vietnam while serving in the Marines before coming home to start FedEx.
It also helped Smith and FedEx that the federal government deregulated the air cargo industry in 1977, opening massive opportunities for Smith’s company.
Of course, we could go down a fun rabbit hole looking at companies that really ought to credit luck — or big gambles — for their early success.
Microsoft? There are a lot of versions of the story, but most of them say Bill Gates managed to sell an operating system that Microsoft didn’t yet own to IBM, acquiring it under favorable terms, and keeping the rights to sell it to other companies.
Twitter? It started as a side project by some of the people behind the early podcasting company Odeo.
Zoom? Would we be using Zoom now if it hadn’t happened to be in the perfect position to become the default videoconferencing setup during the pandemic (at least for a while)?
Non-entrepreneurs often seem to think that entrepreneurs must have an exceptionally high tolerance for risk, but the other way to look at this is that the most successful in the game make every effort they can to reduce risk.
Perhaps that’s the lesson to take away here, sort of a variation on the classic Louis Pasteur quote that “chance favors the prepared mind.”
Luck can sometimes be vital to success, but it usually requires a lot of hard work and achievement to be in a position to take advantage of lucky breaks when they come along.
Smith was once asked what he hoped his legacy would be. He replied:
“I don’t think that way. I just enjoy what I’m doing. I’m very focused on the here and now. The legacy will be the success of the company and, I hope, the success of my children, of which I have a lot of.”
Rest in peace Mr. Smith. Somewhere out there, I’ll bet a member of a new generation will be inspired by your example.
That’s a pretty good addition to anybody's legacy.
7 other things worth mentioning
Linda Yaccarino, the CEO of Elon Musk's "X," left the company Wednesday. She gave no reason for her departure, but it came a day after the platform's built-in AI engine, "Grok," which Musk said last week had been "improved ... significantly," praised Adolf Hitler to its 4.5 million followers, shared antisemitic tropes, opined on the "overrepresentation" of "Jewish executives," and offered graphic suggestions on how someone might break into a Democratic state politician's home to commit sexual assault. (Newsweek; a few of the many Grok posts are here, here and here. Be warned, they are in fact really graphic and offensive, but it’s worth calling out.)
The U.S. Supreme Court ruled at least temporarily that the Trump administration to proceed with large-scale reductions in staff at many federal government agencies as opponents continue to seek to block those efforts in lower-court proceedings. The high court is likely to reconsider at a later date. Justice Ketanji Brown Jackson was the only one of the court’s nine members to write a dissent from the ruling. (CNBC)
Travel agents and travelers share their playbook for Americans on overseas visits in the face of increased antipathy toward the U.S. (WSJ)
A federal rule designed to make canceling subscriptions as easy as signing up for them has been struck down by a U.S. federal appeals court. "While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing,” the court wrote, the FTC’s failure to follow required procedures during the rule-making process were “fatal.” (The Guardian)
Royal Canadian Mounted Police (RCMP) arrested four people including two members of Canada's armed forces and charged them with being part of an extremist plot that allegedly involved creating an anti-government militia with a massive trove of weapons. An RCMP spokesperson said the investigation began in the spring of 2023, and that searches in the Quebec City area, in January 2024, led to the seizure of 16 explosive devices, 83 firearms and accessories, approximately 11,000 rounds of ammunition of various calibres, nearly 130 magazines and four pairs of night-vision goggles. (CBC)
Confused about where things stand with Trump's tariffs? Here's a handy primer -- starting with the 10% tax on everything, and country-specific tariffs that were delayed after the market was spooked in April, but are potentially about to go into effect. (NPR)
Publishers are stepping up efforts to protect their websites from tech companies that hoover up content for new AI tools. The media companies have sued, forged licensing deals to be compensated for the use of their material, or both. Many asked nicely for artificial-intelligence bots to stop scraping. Now, they are working to block crawlers from their sites altogether. (WSJ)
Thanks for reading. Photo by Nick Morales on Unsplash. I wrote about some of this before at Inc.com. See you in the comments.
haha - when we play pool at our house almost every afternoon, when one of us makes a good shot, we'll either say "Well, that was lucky", or I have an old give-away from Best Buy, you hit the red button on top & it says "That was easy"
neither of us are the betting kinds. One son, when he was younger, would do call-ins, when you'd win something if you were the 100th or something, & he was surprisingly often the winner!! Once he won free Chipotles each month for a year. He won all kinds of other things... I don't know if he continues to do that. Another son does gamble a bit, which I don't care for - it's his money - & I don't know how much he's lost, but he has won enough $$ to purchase items not in his budget plus he's won things like a 4x4 which he didn't need so sold it to a friend. The other son I doubt very much if he does any sort...
Another one of your interesting stories about an interesting person who was in the right place at the right time. One could also call his success Fate. But I’ll have to admit, every time I read about Fed-Ex I think of Tom Hanks and “Wilson” in Castaway. That probably helped the company in its own way too.
While these companies serve their purposes I suppose, I’d still take the good old USPS. Before my big move overseas I priced Fed-Ex, UPS and the USPS for shipping all my crates of worldly goods and the Post office was, by far, the least expensive to use. I can’t say enough good things about the staff at my local post office who had to weigh, over a period of about two weeks, my 25 shipping crates most of which weighed 50 pounds. They all had to go from NC down to the overseas shipper in Miami. I got every one of them in good shape and had only three broken bowls but they were broken because they weren’t bubble wrapped well. The other 7 were fine. I wish I could remember how much I spent with the Post Office but I don’t have my son’s spread sheet handy. We usually took 5-6 crates at a time and I don’t remember spending much more than $350 at a time. Consider that and my having to use UPS for an off sized but very light piece of art(a brass spiderweb complete with spider and fly); you know, they ship anything anywhere? Getting that to Miami was almost $400. It was just a bit too large for the PO to handle.
All that to say, I’d use the Post Office in a heartbeat if I were still in the US. We don’t have mail service per se here. With as big an influence the US used to have here that surprised me the most. If I want to get something to the states from here I do have to use Fed-Ex or drive 4 hours to the big city, make an appointment at the Embassy just to use the diplomatic mail service. I may have to vote that way next time depending on what NC decides to do about overseas voters.
When I read about the discovery of that plot by the RCMP in Quebec City, it reminded me of when my husband and I spent a few days there before traveling on up north in the province. Beautiful city but the people definitely march to their own tune there. My very few words of French kept me polite and saved me from ordering horse meat for dinner. So there’s that.