Fred Smith

We can't count on getting any air freight shipment reliably, he told his stepfather.

Somebody ought to do something about this.

The lesson was clear.

In business, reliability beats everything else.

Speed without predictability is useless.

This observation would become the foundation of FedEx.

It wasn't just fast delivery, but guaranteed delivery.

Smith's first attempt at fixing shipping started with an unexpected target, checks, not packages.

In 1970, a check from New York to Los Angeles took 10 days to clear.

Physical checks had to be trucked between federal reserve banks, and this created billions of dollars in unusable float.

His solution was to apply the hub-and-spoke concept to banking.

Small jets would collect checks nightly, fly them to a central hub, sort them, and return them by dawn.

One day, instead of 10, Smith incorporated Federal Express Corporation on June 18, 1971.

The name was strategic.

Federal would resonate with the Federal Reserve System.

He bought two Falcon jets from Pan Am for $2.6 million, a bargain during the aviation depression.

The Federal Reserve loved the idea, then said no.

It depended on the Fed at Kansas City working with the Fed at St.

Louis, as controller Irby Tedder explained.

They were so politically oriented that people weren't willing to change their work schedule.