Part I

My offer (from Art Bass, then head of
Flight Operations in part because he was,
as the FAA required, a pilot) and offer
letter said that (A) there would be a
stock plan, (B) I would be part of the
stock plan, (C) the plan would be based on
salary in which case I would be quite high
up, (D) the Board was considering the
stock plan now and results were expected
in two weeks, (E) if the plan were not
equitable then the first plane out of
Memphis would be full of ex-Federal
Express employees.

With that, I joined, kept teaching my
courses in computer science at Georgetown
until the courses were over, at home got a
time sharing terminal, a CP67/CMS account,
etc., and dug into writing the software to
schedule the fleet.

Some Board Members, including one with a
lot of experience at American Airlines,
doubted there could be a schedule. So,
the Board wanted to see a schedule, say,
for the full, planned fleet of 33 planes
serving the full, planned list of 90 US
cities. Some crucial funding, some
equity, some loans on the planes, were
being held up waiting for the schedule.
The company was at risk.

I wrote the software, finished my
teaching, drove to Memphis, and rented a
room.

So, with the Board having doubts and the
company at risk, one evening Roger Frock
and I used my software to develop a
schedule for the 33 planes and 90 cities.
We printed out the schedule, had copies
made, and handed them around.

Board Member General Dynamics had sent two
representatives, one an aeronautical
engineer and one a finance guy, to
provide, say, adult supervision; those
two guys went over the schedule fairly
carefully and announced "It's a little
tight in a few places but it's flyable"
(pretty good from just a little fast work
from Roger and I); CEO Fred Smith's
reaction at the next senior staff meeting
was "Amazing document. Solves the most
important problem facing the start of
Federal Express.". The funding was
enabled. FedEx was saved. Pretty good
from typing in 6000 lines of PL/I in six
weeks while also teaching two courses!

PL/I is a nice language -- good on data
types, data manipulations, data
conversions, data structures, scope of
names, exceptional condition handling,
storage management, debugging, etc. E.g.,
its Based structures, can serve as a
poor-man's classes in object oriented
programming.

Later the Board wanted to see some revenue
projections. I didn't want to get
involved, but no one had more than wishes,
hopes, dreams, intentions, etc. So, I
started with the common high school
question, what do we know? Well, we knew
the present revenue or, if you will,
number of packages per day. From our
initial long term planning, we knew what
revenue we expected with 33 full airplanes
serving 90 US cities. So, in some at
least a somewhat meaningful sense the
desired projections were an
interpolation between those two facts we
did know.

Then the question was, how will the
interpolation go? Well, why will the
revenue grow? Sure: The revenue will
grow as it has been so far, customers to
be hearing about FedEx from current happy
FedEx customers. E.g., maybe a customer
to be gets a package via FedEx. So, we're
talking word of mouth advertising or
viral growth.

So, the rate of growth in revenue per day
or packages per day should be directly
proportional to (A) the number of current
customers and (B) the number of customers
to be. That is, the rate of growth should
be proportional to both (A) and (B), that
is, to their product.

So, all downhill from there: At time t,
let y(t) be the revenue, say, per day, at
time t. Let t = 0 correspond to the
present. So, we know y(0). Let b be the
revenue per day with a full system, that
is, 33 full airplanes and 90 US cities.
That is, we know both y(t) and b.

So, from freshman calculus, the rate of
growth is the first derivative of y(t),
that is, d/dt y(t) = y'(t). So, from the
proportionality, we have that there must
exist some constant k so that

y'(t) = k y(t) ( b - y(t) )

So, we have an initial value problem (we
know y(0)) for a first order, linear
ordinary differential equation.

Okay, how to get a solution? Easy, just
need freshman calculus, not even a course
in differential equations. And, yes,
there is a closed form solution, right,
with some exponentials.

Right, the solution is the famous
logistics curve sometimes seen as doing
well tracking, say, the growth of TV set
ownership in the early years of TV. So,
my derivation, as just above, can be seen
as an axiomatic derivation (maybe
rediscovery, maybe original) of the
logistic curve. The solution may remain
an okay, first-cut approach to
understanding viral growth.

So, I showed my work to Senior Vice
President Mike Basch, likely the one most
responsible for getting the projections
for the Board, and he liked my work. So,
on a Friday afternoon we picked several
candidate values for the constant k and
drew the corresponding graphs of the
revenue projections. We used my HP
calculator, reverse Polish notation, stack
machine, etc. -- HP should run an ad! We
picked a value of k that gave what seemed
to be reasonable projections and declared
the problem solved.

The HP? It's still in my center desk
drawer. Checking, right, it's an HP-35.
My wife and I paid $400 for it.

The next day, a Saturday, at about noon, I
was in my office likely working on fleet
scheduling and got a call from Roger Frock
asking if I knew anything about the
revenue projections. Saying I did, he
asked if I could come over to the HQ and
explain.

So, I got into my Camaro hot rod (396 big
block, etc.), and drove over. Yes, I
brought my HP-35.

As I arrived, at one of the old WWII
wooden hanger buildings, people were
standing around and not happy. Our two
guys from General Dynamics were standing
in the hall with their bags packed and not
happy.

Roger led me to a table with the graph,
picked a point in time, and asked me to
calculate the value on the graph. So,
with my HP-35, I punched the buttons,
stopped, slowed down, cleared the HP-35,
started again, slowly and carefully
punched the buttons again, and got the
value on the graph. I did that for
several points for the graph, and then
everyone started to get happy.

It turned out that the Board meeting had
been that morning; Mike Basch was
traveling; I'd not been invited to the
Board meeting; the graph had been
presented; the two guys from General
Dynamics (GD) had asked how the graph had
been calculated; and everyone else at the
meeting dug in trying to answer. They
worked for hours with no results. Finally
the two guys from GD lost patience with
FedEx, returned to their rented rooms,
packed their bags, got plane reservations
back to Texas, and as a last chance
returned, with their packed bags, to the
FedEx HQ to see if anyone could explain
the projections.

Somehow Roger Frock had guessed that I'd
done the projections, called me, and got
me to the Board meeting just in time.

It was close, but I'd saved FedEx a second
time.

Right: Some people in FedEx would rather
have seen FedEx go under than invite me to
the Board meeting. We're talking some
severe cases of jealousy, bureaucratic
infighting, attacking the guy down the
hall instead of the competition outside of
the building, goal subordination as in
organizational behavior, etc., right?
Bummer.

Right: Apparently I was the only person
at FedEx who still understood freshman
calculus. Gads. And I never even took
freshman calculus, taught it to myself
from a book, and started with sophomore
calculus.

I never got any thanks for saving the
company the second time.