Fred Smith got a “C” on a college paper that outlined the $54 billion idea. His professor called it unrealistic — the market would prove him wrong.

Fred Smith, founder of FedEx, famously wrote a college term paper at Yale outlining a radical idea: an overnight commercial air delivery service. His professor reportedly gave it a “C”, calling the concept unrealistic.

In that paper, Smith detailed the inefficiencies in existing airfreight systems. Most cargo was transported via passenger routes regulated by the government — a model that made neither economic nor logistical sense for time-sensitive deliveries.

Fred proposed a dedicated airfreight network designed to move high-priority items such as medicine, computer parts, and electronics overnight.

After graduating, Fred served in the U.S. Marine Corps from 1966 to 1970. It was only after his service that he founded FedEx in 1971. The early years were marked more by struggle than success.

The 1978 Airline Deregulation Act ended federal control over fares, routes, and market entry. For FedEx, it was a turning point.

Fred later credited his time as a Marine officer in Vietnam for shaping FedEx’s logistics model. The military relied on centralized supply hubs to move personnel and equipment with precision.

Fred brought that same hub-and-spoke architecture to FedEx, turning Memphis into the company’s nerve center.

Why Memphis?
1. It’s within a 600-mile radius of 80% of the U.S. population.
2. Its airport rarely closes due to bad weather.

Between 10 p.m. and 6 a.m., FedEx essentially takes over the Memphis airport:

1. A flight lands every 45 seconds.
2. 1.5 million packages are sorted using 40 miles of conveyor belts.
3. Departures begin around 2 a.m., again at 45-second intervals.

Today, FedEx is a $54 billion logistics powerhouse — all from an idea once graded below average.

Tribute: Fred Smith passed away on June 21st, 2025, at the age of 80.

Key takeaways.

There’s a razor-thin margin between success and failure. The real risk isn’t being late, but being too early. FedEx survived until the right moment to make its idea work.

Silicon Valley is littered with startups that had the right idea at the wrong time. General Magic tried to build the iPhone in the ’90s. Six Degrees launched before Facebook and LinkedIn.

Take it easy until next time.

Blogging is something I enjoy, and I share my thoughts on my blog most weekends.

Read all my “Notes to Self” at view all blogs.