Taken Mind Stories!
BlackJack – The gamble game saved FedEx in Financial crisis.
Brief crisis condition of FedEx
The concept for what became Federal Express came to Fred Smith while he was studying at Yale University. When FedEx completed 3 years of its existence in the market, no one in the company expected the financial crisis. Federal Express (FedEx) became low on funding due to abruptly increasing air-fuel costs. FedEx started losing $1 million in a month. The company became bankrupt with a standalone cash of $5000 in the bank. The cash was clearly not sufficient to continue FedEx’s operations. Even worse, the General dynamics board rejected the smith’s pitch for funding FedEx.
The planes of FedEx needed to clear the $27,000 fuel bill price. This was a nightmare for Smith as his aspirations on FedEx were about to end.
Desperate minds do survive through risks. In the case of FedEx, Smith took a risk of investing his only $5000 in gambling.
The gamble game saved FedEx
Smith took a flight to Las Vegas and played his favorite “Blackjack” game. Smith invested whatever he had in his hand. He didn’t have a return flight to home in case of losing. Now yeah! that was a bottle full of risks.
To Smith’s luck, He started winning games. By the end of the game, he had earned $27,000, which was sufficient for FedEx to start its flight operation.
The Founding executive of FedEx Robert Frock, in his book “Changing How the World Does Business: FedEx’s Incredible Journey to Success – The Inside Story“, describes the incident as
I asked Fred where the funds had come from, and he responded, ‘The meeting with the General Dynamics board was a bust and I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.’ I said, ‘You mean you took our last $5,000– how could you do that?’ He shrugged his shoulders and said, ‘What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.’ Fred’s luck held again. It was not much, but it came at a critical time and kept us in business for another week.
After this incident, FedEx got on a much firmer ground. The confidence of FedEx employees on smith just kicked high. The initial $27,000 earned gave hope to smith. FedEx raised another $11 million to keep all of it’s services functional.
To all Fellow Entrepreneurs: Remember, a ship in harbor is safe, but that is not what ships are built for.
Incase you are a budding Entrepreneur, wanting to explore the business field, I recommend this book. I personally have one and it’s highly motivational.
Changing How the World Does Business: FedEx’s Incredible Journey to Success – The Inside Story