Fred Smith founded FedEx on an idea everyone told him would fail and built it into an $88 billion empire that changed how the world moves. In this episode, we dive into how he built FedEx and the lessons he learned along the way. This story proves that impossible is just another word for opportunity. ----- Timestamps: (00:00) Introduction (03:36) Part 1: The Boy Who Wouldn't Stay Down (15:52) Part 2: The Impossible Company (29:36) Part 3: The Empire Builder (38:12) Epilogue: From Crisis to Legacy (1993–2025) (40:55) Important Things That Didn’t Make It Into the Episode (43:55) Lessons from Fred Smith ----- Upgrade: Get a hand edited transcripts and ad free experiences along with my thoughts and reflections at the end of every conversation. Learn more @ fs.blog/membership ------ Newsletter: The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at fs.blog/newsletter ------ Follow Shane Parrish X @ShaneAParrish Insta @farnamstreet LinkedIn Shane Parrish ------ This episode is for informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices
Full Episode
It's July, 1974. Fred Smith is sitting at a blackjack table in Las Vegas at 3 a.m. He's playing with the last $5,000 his company has left, literally the entire bank account of FedEx. Back in Memphis, 14 jets sit on the tarmac. They need $24,000 worth of fuel by Monday morning or Federal Express dies. Smith's already been turned down by every investor.
He's personally guaranteed millions in loans. His house, his inheritance, everything he owns is on the line. General Dynamics, an early investor in FedEx, just told him no for the third time.
Sorry, Fred, we can't invest anymore in FedEx.
The company is burning a million dollars a month with no plan to profitability. Most founders would have given up, but Fred Smith isn't most founders. He went to Vegas instead. By sunrise, he's turned that $5,000 into $27,000, just enough to fuel the planes for two more weeks. that bought him the time to raise $11 million and save the company.
Five decades later, that desperate gamble has become an $88 billion empire that moves 17 million packages a day. But here's what matters. Fred Smith didn't build FedEx because he got lucky at Blackjack. He built it because when everyone else said overnight delivery was impossible, he saw that impossible was just another word for opportunity. Welcome to The Knowledge Project.
I'm your host, Shane Parish. In a world where knowledge is power, this podcast is your toolkit for mastering the best of what other people have already figured out. Fred Smith built FedEx from a college term paper that got a C. The professor said it wouldn't work. Today, that idea moves trillions of dollars a year in packages.
This is about how Fred Smith solved a problem everyone else accepted as unsolvable. Before FedEx, shipping something across the country meant waiting days or weeks with no idea when it would arrive. Smith refused to accept that. What he built changed more than shipping. He changed our relationship with time before FedEx waiting was inevitable. After FedEx, waiting became optional.
That shift created everything from just-in-time manufacturing to same-day delivery. Smith had every excuse to fail. His father died when he was four, leaving him to grow up in leg braces from a bone disease. He came back to Vietnam to build his company during the worst recession since the Depression. At one point, with only $5,000 left in the company bank account, he flew to Vegas and won.
Yet he built one of only four companies to ever hit $1 billion in revenue within 10 years without acquisitions. At the time, anyway. Three lessons from this episode stand out. First, the best businesses solve coordination problems, not product problems. FedEx wasn't really about moving packages. It was about trust. Second, align incentives with outcomes.
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