FedEx Was Going Under Until One Wild Vegas Night Changed Everything

Today’s true story is about taking risks; necessary when you are an entrepreneur. But who would have imagined taking a crazy risk like this?!

In 1973, Fred Smith and his nascent business FedEx were in a world of trouble.

His visionary (and at the time, radical) idea of overnight delivery was faltering, big time.

The company was hemorrhaging cash – losing a million dollars a month. The fuel bills were stacking up, his planes were grounded, and bankruptcy loomed large.

Investors were ready to pull the plug.

Smith had just $5,000 left in the bank.

For most people, that would have meant shutting down. But for Fred Smith, it meant one last shot. One wild, desperate, logic-defying shot.

He took that last $5,000, flew to Las Vegas, sat down at the blackjack table, and placed it all on the line. 

The Gamble that Kept FedEx in the Air

By the end of the night, Smith had turned $5,000 into $27,000 – enough to pay the fuel bills and get the planes back in the air (if only for a short while longer.)

But it was enough.

That short runway of cash bought FedEx one more week. And sometimes, one week is all you need.

With the planes back in the air, deliveries resumed. Customers regained confidence in the service. Employees, who had been on edge, found hope again. Most importantly, Smith secured a chance to hustle for more funding.

From Desperation to Domination 

After the Vegas gamble, Smith sprang into action.

He secured an additional $11 million from investors who were convinced by his derring-do and unwavering belief in FedEx’s potential. He streamlined operations, expanded marketing efforts, and focused on keeping the overnight delivery promise.

Each successful delivery built more trust, each week bought more momentum.

Within three years, FedEx was delivering 19,000 packages a day to 25 cities and was turning a profit. By 1983, FedEx had become the first company in U.S. history to achieve $1 billion in revenue within a decade of launch without mergers or acquisitions.

Today 

And today?

Today, FedEx handles over 10 million packages daily, operating in 220 countries and territories.

And it all traces back to that one night in Vegas – the fulcrum event where Fred Smith refused to quit and turned a last-ditch gamble into a global empire.

The Takeaway

A wise man once said, “an entrepreneur is someone who takes a risk with money to make money” and that couldn’t have been more true of Fred Smith.

But Fred Smith’s Vegas gamble was not just about blackjack or money; it was about betting on his vision and his ability to make it work. And fortunately, for the rest of us, to do that does not typically require a (literal) all or nothing bet.

But what it does require betting on yourself.

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Steal This Strategy

📖 Book – Wild Success: 7 Key Lessons for Business Leaders From Extreme Adventurers. Discover how extreme adventurers take calculated risks and apply these lessons to your business. A quick read on leadership, resilience, and smart decision-making.

🌐 Website - FedEx: Our History. Explore FedEx’s journey from startup to shipping giant.

🎙️ Podcast – The Tim Ferriss Show: Derek Sivers on Risk, Reward, and the Meaning of Life. Derek Sivers shares how unconventional thinking and calculated risks helped him create a multimillion-dollar business.

🌐 Newsletter – Farnam Street. A treasure trove of insights on decision-making, risk-taking, and mental models to help you think smarter in business.

About Steve

Steve Strauss is the best-selling author of The Small Business Bible (and 17 other books), Inc.’s small business columnist, a lawyer (non-practicing), and an entrepreneur. He sold his last venture, TheSelfEmployed.com to Mark Cuban & Zen Business. Need content or ghostwriting ? Contact Steve!