Frederick W. "Fred" Smith, whose Yale term paper sketching a coast-to-coast overnight-delivery network drew only a "C," used the same blueprint six years later to launch Federal Express (NYSE:FDX), upending global logistics and making him a billionaire. Smith died Saturday, June 21, in Memphis at 80, the company confirmed.
What Happened: According to a report from 2008 by Entrepreneur, in 1965, the 21-year-old economics major proposed routing time-sensitive packages through a single, jet-served sorting hub rather than relying on passenger airlines. His professor, scrawled a now-famous note, "The concept is interesting and well-formed, but in order to earn better than a ‘C,' the idea must be feasible."
After a Marine tour in Vietnam, Smith tapped a $4 million inheritance and raised $91 million more to prove the professor wrong, incorporating Federal Express in 1971 and launching service from Memphis two years later. By the time he retired as CEO in 2022, FedEx flew the world's largest all-cargo jet fleet and handled nine million parcels a day.
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Historians say the anecdote shows how academic skepticism spurred one of the 20th century's biggest business innovations. Smith often used the story to encourage entrepreneurs to ignore early naysayers. "Feasibility is sometimes a matter of capital and will," he told Yale graduates in 2008 when the university awarded him an honorary doctorate.
Why It Matters: Fred Smith turned Yale's "C" on his overnight-delivery paper into FedEx's hub-and-spoke empire, much like Bill Gates parlayed a Harvard dropout slip into Microsoft (NASDAQ:MSFT) after a professor admitted he "wasn't surprised" but wishes he had invested early.
Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk similarly walked away from Stanford's Ph.D. program after two days and later sold Zip2 for $307 million, proof that academic exit ramps can lead to billion-dollar roads.
Virgin Galactic Holdings Inc. (NYSE:SPCE) founder Richard Branson nearly failed out of school, left at 16 and built Virgin Group's 400-company portfolio, while Mark Zuckerberg insists a "reckoning" over degrees is coming, even though dropping out powered Facebook's ascent. Each story echoes Smith’s in some way; it shows how classroom doubt supplied the spark, but relentless execution turned low grades into legendary brands.
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