Introduction: How Blackjack Saved FedEx
Frederick Smith was like an older version of Forrest Gump, in that he had to overcome a huge amount of adversity, especially during his formative years. For a start, when he was just 4 years old, his father passed away. Then, a few years later, Frederick developed a disease that made walking difficult, so much so that he had to wear leg braces for many years. Luckily, by his mid-teens, the disease subsided enough that he was able to move forwards and play college football. Run Forrest, run!
Smith’s Early Years
In the early 1060’s he was accepted into Yale. There he wrote his paper during the economics class about his idea to start a company that would supply overnight deliveries across the US by using its own planes, mail stations, depots, and delivery vans. At that time, larger packages were transported by passenger planes or lorries. For his efforts, he received a grade C and his professor told him that the idea was unfeasible. Never the less, the idea of such a service stayed with Frederick throughout his army time. After graduating from college in 1966, he enlisted and went off to fight in Vietnam. He served two tours of duty in the Marines and as a pilot. He received the Silver Star, two Purple Hearts and a Bronze Star before being discharged in 1969.
Blackjack Saved FedEx: Federal Express Begins
After leaving the army, Frederick bought himself into a conglomerate called Ark Aviation Services. This was a company that specialized in aircraft maintenance. In a short time, he turned it into a company that bought and sold corporate just. But the idea of an overnight delivery company that he first had at school was what he really wanted to set up. After securing some start-up venture capital money of $80 million, and pooling it with his own savings from a $4 million inheritance, he started a business called Federal Express in the early 1970s.
OPEC Oil Crisis
It was in 1973 that Federal Express shipped its first delivery of 186 parcels. The company had 8 planes and covered 35 cities, and was adding more each month. But in late 1973, the oil crisis began with OPEC targeting countries that had previously supported Israel. It wasn’t long before the price of oil was being driven sky-high by the embargo and this was causing Federal Express to sever problems. The company was losing more than $1 million a month and stood on the verge of being bankrupt. Frederick tried everything in able to secure additional funding, but banks and lending institutions were all suffering as a result of the price of oil and subsequent economic downturn. He was left with just $5,000 in the company bank account. He didn’t even have enough cash to re-fuel the aircraft for the next week.
Blackjack Saved FedEx: Down To The Last $5,000
And this is where the story takes on a fantastic form and really presses home the hero’s journey. Faced with insurmountable odds and the choice of watching his dream be smashed, he did the only thing left to do. He took the $5,000 company savings and headed off to Las Vegas in the hope of using this as a bankroll that would see him emerge with greater winnings. This is what’s also known as a “Hail Mary” move. Roger Frock, a former senior vice president of operations at FedEx, describes the scene when he found out what Smith did. “I said, ‘You mean you took our last $5,000 — how could you do that? [Smith] shrugged his shoulders and said, ‘What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.'”
Gambled on Blackjack
Well, as it happened, he took the $5,000 and one week later returned with a profit of $27,000 at the blackjack tables. This was enough to get the planes fueled for the following week. But more importantly, it gave Frederick a massive morale boost. He was able to go out and, with his newfound confidence, secure another $11 million in short term funding. After getting the company back on a stable footing, he launched a direct sales marketing campaign in order to boost the companies visibility. And it worked. In 1976, Fedex produced its first profit of $3.7 million. By 1980 these had climbed to $40 million. And by the year 2000, Frederick Smith was counted as one of the top 400 richest guys in the world.
Blackjack Saved Fedex: You’re a Winner, Baby
Today Fedex ships around 17 million packages each day. It’s the world’s second-largest airline with over 700 planes in its fleet. And the company has a valuation of over $30 billion. Forbes magazine named Smith as the 26th Greatest Leader of the World and he enjoys a net worth of more than $6 billion. And then none of this would of come around if he’d ended up losing at the blackjack table. Like a movie with a heart and a happy ending. His hero’s journey included the taking of huge risk. Yet he emerged triumphant as the final credits roll. And that’s how blackjack saved Fedex. Why don’t you visit one of the online casino sites in the US then?