Check out this BusinessWeek interview with Smith. Here is a snippet:
“Q: Part of the lore of FedEx is that you wrote a term paper while a grad student at Yale that first explored the idea of an overnight-delivery service — and that you received a C from a skeptical professor. Was that term paper truly the genesis of FedEx?
A: The question is prescient because there wasn’t a single “eureka” moment. The original idea for FedEx came when I wrote a term paper as an undergraduate — not as a graduate student, because I never went to graduate school — about a very simple observation: As society automated, as people began to put computers in banks to cancel checks — rather than clerks — or people began to put sophisticated electronics in airplanes — society and the manufacturers of that automated society were going to need a completely different logistics system.
That was becoming obvious to me both from just reading about it from an academic standpoint, and in those days I used to fly — I was a charter pilot at the Tweed New Haven airport. I flew around to those airports up there, and all those high-tech companies, including IBM (IBM ) and Xerox (XRX ), that’s what their pilots used to talk about — what a difficult proposition it was to keep their field-service engineers and their parts and logistics systems operating. In fact, a lot of the corporate airplanes up there were doing nothing more than flying [computer] parts and pieces around…when the computer would break down.
That was the paper, and the whole issue about the C on the grade, came from naivete on my part when I was talking to a reporter years and years ago, and he asked what I made. I said, “I don’t know, probably made my usual C.”