#151 Frederick Smith (FedEx)

**David Senra** (0:00)
I want to tell you about a one-time only limited event that I don't think you're going to want to miss. I am doing a live show with Patrick O'Shaughnessy from the Invest Like the Best podcast in New York City on October 19th. Patrick has interviewed over 300 of the world's best investors and founders for his podcast. I've read over 300 biographies of history's greatest entrepreneurs for my podcast. We'll be talking about what we learned from seven years of podcasting, sharing our favorite ideas and stories, and doing a live Q&A. There will also be special event-only swag. If you live in New York City, I think it's a no-brainer. But if not, I think it's a great excuse to fly in. I've already heard from a bunch of people that bought tickets, they're flying in from other cities. Some people are flying in from other countries. That's setting the bar really high, so I will have at least four shots of espresso or four energy drinks before or during the show so we can make it a night that you'll never forget. If you're interested in attending this unique live event, I will leave a link down below. I highly recommend you get your tickets today, and I hope I get to see you in New York on October 19th. At age 30, Frederick Wallace Smith was in deep trouble. His dream of creating Federal Express had become too expensive and was fast fizzling out. He had exhausted his father's millions. He was in hawk for 15 or 20 million more.
He appeared in danger of losing his cargo planes and his wife.
His own board of directors had fired him as CEO. And now the FBI accused him of forging papers to get a $2 million bank loan and was trying to send him to prison.
He thought of suicide. But any talk of suicide was uncharacteristic of Fred Smith. It is ridiculous to think of Fred even contemplating such a thing. Jump out of a window? He's more likely to throw somebody out of a window.
Fred never talked about this difficult period, perhaps the lowest point of his life. His infant Federal Express became a ravenous money-eating ogre. To keep his planes flying, Fred had to beg, borrow and steal.
At any risk, at any cost, he refused to let Federal Express die.
The situation confronting him on this May morning in 1974 was dismal. At a dangerous ebb, not only was Federal Express teetering on bankruptcy, but its founder, with the FBI and the US District Attorney hard on his heels, could possibly go to prison for bank fraud.
That was an excerpt from the book that I'm gonna talk to you about today, which is Overnight Success, Federal Express and Frederick Smith, Its Renegade Creator, and it was written by Vance Trimble. Vance is the guy that wrote the last week's book, the biography of Sam Walton. He actually wrote this book right after he wrote the book on Sam Walton. So that excerpt actually gives us insight into what I feel is the main benefit of reading a book like this, which is it details how difficult it was to start FedEx and then all the pain and suffering that Fred actually had to persevere through before he finally got on solid financial footing and it actually became profitable and successful business. It almost went out of business multiple times. And so that's, as I'm sitting here reading over the parts that stuck out most to me, the highlights and notes I made, that is really what I focused on. I'm going to tell you a little bit about his early life because I think there's a lot of similarities between his personality and his father's. He didn't really know his father. His father dies when Fred's just four. But let me go ahead and give you some background here. So this is a little bit about, I'm gonna read the section to you. It's really, it's talking about Fred's dad's personality. But I would feel, now that I've finished reading the book, I really feel these same characteristics were also part of Fred's personality. So it says, at age 20, James Frederick Smith started his climb to fame and fortune. His ambition was dead on. Aggressively supported by unlimited energy, a quick mind, an open and honest friendliness, plus a certain amount of gambler's luck. That part about a certain amount of gambler's luck refers to this famous story that I even knew before I read this book. It's also in this book. But Fred Smith, FedEx is almost out of money. On a Friday, they're pretty sure they're going to close on Monday. He goes to Vegas over the weekend. I think there's two different versions of the story. One that he needed $27,000 to meet payroll. The other is that he needed $27,000 for the fuel bill. He winds up taking a few hundred dollars and wins over almost $30,000 at the blackjack table. And that temporarily staves off bankruptcy. So that is an actual true story. So now back to Fred's dad. As a young man, he actually gets hired by somebody that encourages... There's something really important that happens to him. His boss encourages him to think entrepreneurially. And he's going to wind up starting two very successful businesses. He's actually working out in the Texas oil fields in the early 1900s. And he's selling trucks.