Entrepreneurial Success: Take a Tip from the Pros

By Michael Sanibel

Fred Smith: Founder of FedEx

It isn’t often that a trade name becomes synonymous with the service provided by the company that created it. Like Xerox before it, the trademark FedEx has achieved common usage as a verb when people talk about shipping items out quickly. The man indirectly responsible for this familiarity is Fred Smith, the company’s founder and chairman.

Born in Mississippi, Smith attended Yale University, sharing lecture halls and cafeteria tables with two other future notables, George W. Bush and John Kerry. During his tenure at Yale, Smith wrote a paper that described his plan for an overnight delivery service. After graduation, he served in the Vietnam War, and while in service studied the logistics and supply systems used by the military. In the back of his mind was his college paper, which he hoped to turn into a reality after he left the service as a decorated veteran.

In 1970, he bought a majority stake in an aircraft maintenance contractor and founded Federal Express a year later. He had the benefit of a $4 million inheritance, but that was not nearly enough money to get his venture off the ground. He put together a business plan based on his paper, and made the rounds to investment banks in search of private investors to provide the capital he needed. He secured almost $100 million in equity funding for an idea that no one had ever before put into practice.

FedEx was the first company to successfully integrate air and ground shipments under an umbrella of an express delivery system. Smith also adopted the idea of a central hub that served as a clearing center for all traffic movements inside the system’s web.

If imitation is the sincerest form of flattery, then Fred Smith should feel extremely flattered. There is no shortage of express delivery companies that attempt to copy his term paper from long ago.

STEVE JOBS

It’s hard to say “Apple” without thinking of Steve Jobs. Like another early computer pioneer by the name of Gates, Jobs was a college dropout with a vision of how technology could be harnessed in ways never before thought possible. With his friend Steve Wozniak, they embarked on a mission to popularize the personal computer by recognizing and capitalizing on the commercial potential of the mouse-driven Graphical User Interface.

Much of Jobs’s success can be attributed to his legendary persistence and consummate skills of persuasion and salesmanship. When he was ousted from Apple by its board and the man he hired to run the company for him, Jobs didn’t miss a beat: he went on to found NeXT, a company specializing in the development of high-end computer platforms for the lucrative business market. He also bought George Lucas’s computer graphics division, which was renamed Pixar Animation Studios. He then contracted with Disney to produce and distribute several award-winning and commercially successful computer-animated feature films. When their contract reached its final year, Jobs and Disney CEO Michael Eisner were unable to negotiate a new deal, which was one of the factors that precipitated Eisner’s retirement from Disney. New Disney CEO Bob Iger decided to buy Pixar, making Jobs the largest individual shareholder of Disney stock.

Apple, now realizing what they’d lost in booting out its charismatic founder and visionary, bought NeXT, which meant the return of Jobs as the CEO of the company he had cofounded. After years of lackluster performance during his absence, Jobs wasted no time in recharging the atmosphere at Apple and challenging its employees to innovate. What followed were a series of big commercial successes, including the iMac, iPod, iTunes, and iPhone. It’s unlikely that any of this would have happened without the iconic leadership of Steve Jobs, named the most powerful person in business by Fortune Magazine in November 2007.