Part II

I'd been at FedEx for over a year. I had
been commuting every few weeks home to
Maryland for a few days at a time -- not
good. There had been no more about the
stock that had been supposed to come in
"two weeks". The company had some
problems, e.g., had nearly gone out of
business due to not inviting me to the
Board meeting. Also the basic planning
was way off -- the planning said that we
could fly the planes around half full and
nearly print money, but we were flying the
planes packed solid, had doubled the
rates, and still were losing money --
bummer.

So that I could be a good bread winner in
my marriage and for our kids if we could
have some, as we hoped, I wanted something
valuable no one could take away from me, a
Ph.D. for my career and/or stock.

So, I'd gotten accepted for an appropriate
Ph.D. at Brown (Division of Applied
Mathematics), Cornell, Princeton, and
Johns Hopkins.

The oil crisis hit. Saving money,
especially on jet fuel, became a biggie.
So, I was working on that. I was getting
a lot of flack from others, especially my
manager.

Finally I called a meeting to explain what
I was working on, three projects. My
manager said I couldn't do that because he
was busy and couldn't come. I told him,
fine, then don't come.

He came. So did Fred, Roger Frock, Art
Bass, the top 15 or so people in FedEx.
My manager was sitting next to Fred and
kept objecting to what I was saying until
Fred told him to cool it.

One of my problems was to use
deterministic optimal control theory to
say how to climb, cruise, and descend the
planes.

A second problem was to use 0-1 integer
linear programming set covering to develop
schedules that would save on OpEx and
maybe also CapEx.

A third problem was how to buy fuel during
a trip from Memphis and back. So, broadly
the idea was to buy extra fuel where it
was cheap and carry it to the next stop or
two where fuel was more expensive. We
were getting fuel for $0.16 a gallon in
Memphis but paying up to $0.55 cents a
gallon (in Nashville). So, that's a case
of what has long been known as fuel
tankering. But doing that interacts with
how to climb, cruise, and descend the
airplane, not being late in the schedule,
loads, weather, air traffic control, etc.
And typically a lot of the cheap fuel gets
burned off just from trying to carry it,
and how much gets burned off has a lot to
do with the flight plan. And any such
decision to buy extra fuel is a bet on
the future of the trip back to Memphis,
that is, a bet against the random
package loads, weather, air traffic, etc.

So, how the heck to solve that? And, for
various reasons, couldn't get a solution
from carrying a computer on the plane and,
really, not even from using a computer on
the ground after landing. I'd found a
way!

So, Fred put me under Senior VP of
Planning Mike Basch and, thus, made me
Director of Operations Research.

But the fall came, and I had to decide
actually to leave for graduate school or
not. With no stock, not a lot of thanks,
with a lot of scars from being attacked,
still away from my wife, the company still
at risk, I decided to go to graduate
school. I liked FedEx, the challenges,
the work, etc., but making the
stockholders rich, with me not one of the
stockholders, while wrecking my marriage
and passing up the chance for a Ph.D. that
might help my career and that no one could
take away from me looked not good. If I
couldn't get stock with the company still
at risk and worked to make the company
valuable, then what hope would I have of
getting stock in the company I'd helped
make valuable before getting any stock?

I went home to Maryland. At the last
moment, Fred wanted me back in Memphis.
He and I met with Mike Basch, and Fred
said, "You know, if you stay, then you are
in line for $500,000 in Federal Express
stock?". Heck no; I didn't "know" any
such thing; I had had and accepted such
promises before, "two weeks", and after 18
months, saving the company twice, and with
three projects to do much more for the
company, all there was were more such
promises, not on paper that a lawyer could
do something with, no thanks -- "Fool me
once, shame on you. Fool me twice, shame
on me.".

Sure, that $500,000 would be ballpark $50
million to $500 million today. And
apparently some people did get some stock.
But there that last day, Fred still was
just not putting it down on paper.

Since then I ran all this past a lawyer
who concluded, "Legally FedEx owes you
nothing. Morally they owe you
everything.".

So, here on HN, maybe I definitely should
tell this story as I have so that others
can benefit so that more promises of stock
can become ownership of stock.

Of course, there is a lot more to getting
wealthy from stock in a startup than what
I've outlined here.

Broad Lesson: The broad lesson for people
in startups with promises of stock, become
very well informed and be very careful.

My reaction: Do my own startup. Doing
it. Need to get back to it. It'd be fun
to make more money than Fred! I have a
shot! Back to it!