Fred Smith

But Smith saw something that other people missed.

Memphis International was desperate for business and would give him almost anything.

Also, two other key benefits here that are really important.

First, the weather almost never closed it, just a couple hours annually.

And second, and perhaps most importantly, Memphis sat within overnight truck range of most of America's population.

But the real innovation was hub and spoke itself.

Instead of flights between every city pair, he only needed flights from each city to Memphis and back.

So there was fewer routes, fuller planes, and lower costs.

It's interesting how the best business solutions often seem obvious in retrospect.

The hub and spoke wasn't complex.

It was super simple.

But simple doesn't mean easy.

Execution would be everything, as he learned in Vietnam.

So on April 17th, 1973, after two years of preparation, Federal Express was finally ready to launch.

So Smith assembled 14 Falcon jets, hired almost 400 employees.

He'd spent millions on advertising, promising overnight delivery to 25 cities across America.

And that first night, the company delivered exactly 186 packages.

I could have sorted everything in my station wagon, Smith would later joke, but nobody was laughing then.

They were burning through a million dollars a month with virtually no revenue coming in.

Some executives wanted to shut down immediately, but Smith remembered a lesson from Vietnam.