This Week in Business History Episode 9

“Sometimes it pays to be a little crazy early in your career.”

-Fred Smith, Founder of the Federal Express Corporation

 

The ‘This Week in Business History’ Series on Supply Chain Now shares some of the most relevant business and global supply chain events from years past. It will shine a light on some of the most significant leaders, companies, innovations, and even lessons learned from our collective business history.

This week’s show focuses on the origination of the Fender Electric Guitar, FedEx, and so much more!

Scott Luton (00:11):

[inaudible]

Scott Luton (00:12):

Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family of programming. We take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.

Scott Luton (01:12):

Hello, and thanks for joining us. I’m your host Scott Luton. And today we are focused on the week of August 10th. Today. We’re going to be sharing a variety of monumental things that took place this week and history across the business world. Huge Titans in industry were born and transformational technologies were introduced. That’s what we’ll focus on today. On this week in business history, powered by our team here at supply chain. Now on August 10th, 1889, Charles Doro was born in Philadelphia, Pennsylvania. If you’ve ever played the popular board game monopoly, then you’re already familiar with some of Charles daros contributions to society. Monopoly has become an iconic staple in the board game industry and in popular culture everywhere. It’s been licensed in more than 103 countries and printed and more than 37 languages. In fact, Charles Daro made millions of real dollars not play money. Having sold the game to Parker brothers in 1935, however, Daro only improved the game.

Scott Luton (02:21):

He didn’t invent it. Arguably depending on who you talk to the primary basis for the game. Monopoly is a game invented by Lizzie McGee in the U S in 1903, a game entitled the landlord’s game. Lizzie McGee was an incredible figure in history in 1903, when McGee was applying for the patent for the landlord’s gain, women made up less than 1% of all patent applicants at the time she’d go on and win the patent. A few years later, McGee would make a name for herself, a variety of ways from patents to inventions, to challenging the current period status quo, especially when it came to what was expected of women. A true trailblazer indeed. But several decades later, Charles Darra would play a version of Lizzie McGee’s game with friends, and he’d worked with his family to make tweaks and enhancements to it. For example, Daro would draw the waterworks faucet and the electric company light bulb, and he’d even add the black trains on the railroad spaces.

Scott Luton (03:25):

Do you remember those playing the game? Who could forget BNO railroad? Did you know? It was based on the real Baltimore and Ohio railroad, the first common carrier in the U S and one of the nation’s oldest railroads with these enhancements in hand and with no mention of Lizzie McGee, Charles Daro would sell his game monopoly to department stores while eventually approaching board game companies. The venerable Milton Bradley gave Daro a meeting, but turned down the opportunity to buy the game. Little did Bradley know that he’d be turning down a game that would go on to sell over 250 million additions? Worldwide Parker brothers saw the potential and bought the rights from Daro who would make a fortune and the initial deal and the subsequent royalties. Once Parker, brothers uncovered Lizzie McGee’s claim to the game and much of Dora’s content, they would pay her $500, $500 in 1935 would be about $9,400 in 2020, or enough to buy about 470 monopoly games via

Scott Luton (04:37):

On August 10th, 1909. Clarence Lee Anitas fender was born in Anaheim, California. In fact, he was born in a barn, his parents, Clarence Monte fender and Harriet Elvira wood were successful. Farmers. How’s that for a modest beginning, being born in a barn in his childhood, his uncle would play a key role in fine tuning. Leo Fender’s passion in life. Leo would visit his uncles auto shop in Santa Maria, California one year and fall in love with a homemade radio that he saw. This would cement fenders path forward fender would change the music industry as he founded fender electric instrument manufacturing company in 1946, AKA fender. Some of the iconic companies, significant contributions to music are still widely used today. The fender Telecaster, which is the first mass produced solid body electric guitar, the fender Stratocaster and the fender precision bass, you’d be inducted into the rock and roll hall of fame.

Scott Luton (05:46):

In 1992, on an interesting side note, Leo fender would never learn to play the guitar. He did play the saxophone and he was known to tickle piano keys from time to time. Leo fender loved making music, equipment, boating, and tinkering with cameras, not photography, mind you, but he loved the camera equipment itself. Many companies would send them cameras just to get his take and feedback. Leo offender passed away at 81 years of age from complications due to Parkinson’s disease in 1991, rumor has it that he worked right up to the day before his death doing what he loved his company continues to serve the international music industry to this day on August 11th, 1944, Frederick Wallace Smith was born in marks. Mississippi marks is a small town, really small town home to a few thousand people, but it’s significant. Did you know this small town in North Mississippi was where Martin Luther King Jr’s poor people’s campaign began in 1968.

Scott Luton (06:57):

That’s certainly an important story in and of itself. But for our time today, we’re going to focus on Fred Smith who was born in marks Mississippi to an entrepreneurial family. His father, James Frederick Smith was also a successful businessman who had not only founded the toddle house restaurant chain, but he had also built a bus company, but tragedy struck Fred Smith was four years old. When his father died, the family was able to make it through based on their business ventures success. But the late James Frederick Smith was concerned about how his four children might waste their inheritance early in life. So he chose to place their inheritances in a trust fund that could not be accessed until their 21st birthday, as you’ll see momentarily for Fred Smith, that might’ve been a wise move. Memphis Tennessee was only about 90 minutes North of marks, Mississippi and Memphis was going to play a big role in Fred Smith’s journey.

Scott Luton (07:58):

Fred Smith would in fact go to elementary school in Memphis and he’d go on to attend the prestigious Memphis university school, where he stood out in academics, Smith would go on to attend Yale university. Interestingly enough, Fred Smith wrote a paper as a junior for an economics class in it. Smith suggested a business plan where packages could be delivered overnight to major us cities. His professor must have been less than impressed as Fred Smith earned a C on the paper. After graduating from Yale Smith, joined the U S Marine Corps and spent two tours in Vietnam. His time in the military allowed him to not only serve his country, but the Marines took advantage of Smith’s love for flying while not piloting. Fred Smith still flew in more than 200 ground support missions during his time in Vietnam, earning a variety of honors to a silver star, a bronze star and two purple hearts.

Scott Luton (08:59):

After he separated from the military, Fred Smith would purchase controlling interest in Ark aviation sales company owned by his father-in-law at the time, which focused on maintenance activities on aircraft. He’d lead that company to record financial performance while adjusting the strategy a bit, despite the success, it still wasn’t enough to wet Fred Smith’s whistle Fred’s idea of a business providing overnight airfreight dominated his thought eventually on June 18th, 1971, with the help of $91 million in venture funding. And along with his own $4 million inheritance, Fred Smith would start federal express corporation. He chose to base it in Memphis due to a centralized location, access to a workforce and a moderate climate. FedEx would begin operations in 1973, but fuel prices amongst other things would challenge the young startup and it put the company in debt. As one story goes, FedEx was down to its last $5,000. And Fred Smith was asking for more investment to anyone that would listen after getting a firm.

Scott Luton (10:12):

No, from general dynamics, Fred Smith was on his way home and inspiration hit him. He chose to take a quick detour to Las Vegas, where he would gamble the last $5,000 on black Jack in a development that you just never hear because it just doesn’t happen. Fred Smith would leave Vegas with 27,000 and dollars. He won big and he’d wire that to FedEx bank accounts almost immediately that shot in the arm, as unlikely as it was, would absolutely help. And an $11 million investment would soon follow along with a lot more success. The company would go public in 1978 in 2019, FedEx had almost $70 billion in revenue. Fred Smith wrote a piece in Forbes in 2017 where he stated quote, no business school graduate would recommend gambling as a financial strategy, but sometimes it pays to be a little crazy early in your career. In quote, although Fritz Smith proved his Yale professor wrong to some degree about his business plans potential, arguably he proved his father right about locking away his inheritance until Fred turned 21, a couple of other items to note in this week in business history for the week of August 10th on August 12th, 1981, the IBM personal computer was released.

Scott Luton (11:39):

Apple and radio shack had dominated the home computer market at the time. In fact, after their team bought an IBM PC and studied it, Apple would purchase a full page ad in the wall street journal that started with the infamous quote welcome IBM seriously in quote, but the IBM PC would go on to dominate the market selling 750,000 computers. By the end of 1983, Don Estridge an IBM computer engineer that led the development of the first generation. IBM PC would later state a key learning quote. The most important thing we learned was that how people reacted to a personal computer emotionally was almost more important than what they did with it. That was an entirely new lesson in computer design in quote. And lastly, for today on August 15th, 1914, the Panama canal officially opened the first ship to pass through the canal. After the official opening would be the S S and cone and American passenger and cargo ship about 50 miles in length.

Scott Luton (12:53):

The opening capped off years of deadly in complex construction challenges, quite a feat. The Panama canal is impact on global transportation and supply chain management simply cannot be overstated as transit through the canal saves about 8,000 miles per journey. As ships previously would navigate around the Southern tip of South America, rounding the horn as it was called referring a Cape horn while some of the largest ships used in global shipping today, still do not even fit through the recently expanded Panama canal. The canal still handles roughly 96% of all ships and the world’s fleet that wraps up our look at the week ahead from a business history standpoint, these business leaders and innovations were a few items that stood out to our team. There were certainly no shortage of big stories during the week of August 10th in business history. What stands out to you? Tell us, shoot us a note to Amanda at supply chain.

Scott Luton (13:54):

Now radio.com. We’re here to listen. Ope, you’ve enjoyed our latest edition of this week in business history, focused on the week of August 10th. On that note, be sure to check out a wide variety of industry thought leadership at supply chain. Now radio.com, a friendly reminder. You can now find this week in business history, wherever you get your podcasts from based on all the feedback we’ve received. Our team here at supply chain now chose to create its own channel. It’s a search for it wherever you get your regular podcast from on behalf of the entire team here this week in business history and supply chain. Now this is Scott Luton, wishing of listeners, nothing but the best pay do good give forward and be the change that’s needed. And on that note, we’ll see you next time on this week in business history. Thanks for

Scott Luton (14:46):

[inaudible].

Would you rather watch the show in action?  Watch as Scott introduces you to This Week in Business History through our YouTube channel.

Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

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