Friday, 19 June 2015

Lamborghini and Federal Express: Two Inspirational Start-up Stories

A previous article dealt with the stories of how some companies such as Pez and Gillette had their origins.  Here is the story of two more companies - Lamborghini, dealing with the world of exotic sports cars, and Federal Express, which pioneered overnight delivery.

Ferruccio Lamborghini had humble beginnings, being born to grape farmers in Italy in 1916.  It was his passion for mechanics as opposed to farming that led to his eventual wealth and fame.

 Lamborghinwas more interested in machinery than grapes.  He studied mechanics at a technical institute and served as a mechanic for the Italian army in Rhodes during the Second World War.
After the war, he became quite wealthy as a manufacturer of tractors thanks to his background in farming and mechanics.

Had the story ended there, it would have been a nice tale about how a man born to farmers became successful and wealthy selling tractors.  However, only people who dealt with tractors would have known his name.

It so happened that Lamborghinhad another passion.  As a young man, tractors were fine to get the farming jobs done but they obviously weren't very exciting.  He used his mechanical gifts to tinker with cars and turn them into roaring speedsters.  He started with small Fiats and then turned to Mercedes-Benzes, Jaguars and Maseratis.  It was much more fun to race speedsters than to drive a tractor across a field.

It was his Ferrari automobiles that sparked Lamborghini into starting up his own sports car brand.  He always had problems with the clutch on his Ferraris when driving fast and the repairs done by Ferrari technicians never worked.  He was so angry that he eventually complained to Enzo Ferrari himself, who retorted, 'Stick to your tractors and leave sports cars to the experts'.

The rest is history.  Lamborghini went by the principle that if you want to do something right, you should do it yourself.  He also knew that profits were much higher with exotic sports cars rather than tractors and the product was a lot more glamorous!

He combined his passion and his expertise to create the Lamborghini sports car and become a household name.  Had Enzo Ferrari been more polite, Ferruccio Lamborghini may have never built sports cars but it sometimes takes conflict to spark the passion that leads to new ventures.

Who would have thought that a tractor company would eventually produce a sports car that would be enjoyed by the likes of Floyd Mayweather, George Clooney, Kim Kardashian, Kanye West and Cristiano Ronaldo?  It shows that anything can happen when your dreams are unlimited and you put in the work to match those dreams.

Fred Smith used his passion for flying as a basis for a start-up that became Federal Express.  He attended Yale University in the early 1960's and wrote a paper for an economics class that touted the model of using specialized air transport to deliver packages.   This flew in the face of the current system at the time which used trucks, rail or passenger airplanes.  Fred Smith later said that his paper got a 'C' from the professor but he kept hold of the idea.

His goal was to start a company that used its own airplanes.  These planes could deliver goods much more quickly than relying on airlines which put their own passengers first and has their own schedule.  As the saying goes, "Time is money."  

Using Fred Smith's system, his company combined both air and ground transport under its own umbrella.   Packages and goods were picked up from the sender and transported to the recipient exclusively on Federal Express planes and vehicles .  This was much more efficient than sending packages to a regular airport and waiting for the first plane that had room to take on such items.  The old system meant that the courier had no control over the air transport.  The new system put this into the hands of the company and increased both efficiency and reliability.

This led to the famous slogan:

Fred Smith was such a believer in Federal Express in the early days that he went to Las Vegas when the company was down to its last $5,000 and gambled it all at the blackjack tables.  He won $27,000 and this kept the company afloat by paying its overdue fuel bill.  This method of raising funds is definitely not recommended but it did allow the company to become what it is today.

Ferruccio Lamborghini had humble origins but used his knowledge and passions to create one of the most famous sports car brands in the world.  Fred Smith used his passion and background in flying to start a company that revolutionized express delivery and became the largest such company in the world.  It is through such efforts that many of today's corporations had their start.  Make sure that you follow your passions and use your expertise since you never know where they can lead.

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