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Economics

Frederick W. Smith: No Overnight Success

His FedEx sparked a revolution in just-in-time delivery

Frederick W. Smith
Frederick W. Smith, founder of FedEx Corp. (FDX ), has transportation in his blood. His grandfather was a steamboat captain, and his father built from scratch a regional bus line that became the Southern backbone of the Greyhound Bus system. Smith learned to fly as a teenager, a skill he turned to cash by working weekends as a charter pilot during his years as a student at Yale University in the 1960s. While flying students and other passengers around, Smith had the insight that led him to revolutionize the delivery business. He noticed that he was also frequently ferrying spare parts for computer companies such as IBM (IBM ) that didn't want to wait for the passenger airlines to get critical components to customers.

Smith, an economics major, first broached his idea for an express delivery service in 1965 in what became one of the most infamous term papers in Corporate America. Lore has it that he received a modest C, though Smith doesn't think that was the case. Whatever the grade, he wasn't deterred. "I knew the idea was profound," he says.