FedEx founder gambled his last $5,000 on a Vegas gamble and saved the company – ‘Sometimes it pays to be a little crazy early in your career’

Just a few years after launching FedEx, Fred Smith faced a critical moment that would determine the future of his company. What started as a bold idea written in a college paper quickly became a real business, but by the mid-1970s, FedEx was on the verge of collapse. Smith made a brave decision to save his company, which involved a gamble.

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Smith founded Federal Express in 1971, inspired by his idea in 1965 while studying at Yale. In his mandate paper, he proposed that companies could significantly speed up delivery times by changing their shipping strategies. However, Smith’s teacher did not see the potential and only gave him a “C” for the paper. But Smith was undeterred. After serving two tours of duty in Vietnam as a Marine, he returned to civilian life with renewed determination.

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In 1971, Smith bought a controlling interest in Arkansas Aviation Sales. Here, he truly understood the challenges of shipping goods quickly and realized that his Yale paper idea could be the solution. By 1973, FedEx was operational, providing overnight delivery services in the United States. The company grew rapidly, but as fuel costs rose, FedEx sank into debt.

By 1974, the situation was dire. FedEx only had $5,000 left in its bank account, and Smith’s efforts to secure more funds were repeatedly rebuffed. Bankruptcy seemed almost inevitable. However, Smith was not ready to give up. On a fateful trip back from a failed pitch at General Dynamics, Smith made an impulsive decision that would change everything. He detoured to Las Vegas and took the last $5,000 of company funds to the blackjack tables. Smith won $27,000 — enough to keep FedEx afloat a little longer.

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“The $27,000 wasn’t decisive, but it was a sign that things were going to get better,” Smith later said of the bet. This unexpected win gave it enough room to raise another $11 million in funding. With this new capital, FedEx weathered the storm, and by 1976, the company’s revenue had risen to $75 million. Two years later, FedEx went public, solidifying its place as a major player in the shipping industry.

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By 1983, FedEx had reached a billion dollars in revenue. Today, it is a global logistics powerhouse, generating nearly $70 billion annually. Reflecting on his journey, Smith once wrote in a Forbes essay, “No business school graduate would recommend gambling as a financial strategy, but sometimes it pays to be a little crazy early in your career.”

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Smith’s willingness to take calculated risks, combined with his deep commitment to his employees and his vision, have made FedEx one of the most successful companies in the world.

Sometimes when the odds are stacked against you, a bold move can make all the difference. So whether you’re thinking of starting your own business or just looking for some inspiration, remember that a little “crazy” might be just what you need to succeed.

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This article FedEx founder gambled last $5,000 on Vegas gamble and saved company – ‘Sometimes it pays to be a little crazy early in your career’ originally appeared on Benzinga.com

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