Frederic B. Luddy

The oldest of four children, Fred Luddy was born in 1954 in Hammond, Indiana, where his father worked as an accountant and his mother was a Catholic school teacher. When he was two, the family moved to Indianapolis and lived in a small ranch house. From the beginning, Luddy had a difficult relationship with his parents. His father was mentally and physically abusive and his mother was loving but distant.

“My father was continually disappointed in my performance,” says Luddy. “This is something that lasted for 30 years. I got poor grades, and my father always told me I would never amount to anything. He told me I was stupid. And he hit me whenever he thought I was anywhere near out of line. My mother took care of us, but I always had a difficult time connecting with her.”

As a child, Luddy was a bit of a loner. He enjoyed a small group of friends, but inexplicably felt like an outsider in situations where other children were thriving. “As an adult, I was diagnosed with Asperger’s syndrome (neurodevelopmental disability that can affect the ability to effectively interact and communicate with people). I read a lot, but not what other 10-year-old kids were reading. I would go to the library and read books on architecture and the Physicians’ Desk Reference. I had a huge appetite to learn all I could about different fields.”

Luddy’s interest in varied topics didn’t translate into doing well in the classroom. His first and only A was in organic chemistry. As his relationship with his father continued to deteriorate, he began to feel unsafe at home. “I was 16 and feeling like I would be better off on my own,” he says. “I had $180 in savings and I took my parents’ station wagon and drove straight to California, camping along the way. I became a strawberry picker because you got paid in cash at the end of the day. I also worked at a car wash. Being on my own wasn’t scary to me. In fact, I found it exciting. But I knew I couldn’t do this for the rest of my life. At the end of the summer, I returned home. From then on, I had a relationship with my parents, but it was always superficial.”

In 1972, at the age of 18, Luddy got a job in a machine shop at a folding door factory, which had recently purchased a new computer. “I saw this huge machine coming down the hall and I was curious about it,” he says. “I followed the machine and then I watched over the next couple of months what was happening in this mysterious room with a raised floor and people wearing lab coats. I was drawn to it like a moth to a flame.”

Luddy asked to work with the computer and was given a book on computer programming. He was told to read the book and come up with a program that would solve a specific problem. He accomplished the task overnight. “That’s when I realized I was born to be a programmer,” he says. “And that’s when I started to get a modicum of self-confidence.”

Luddy never returned to high school for his senior year. Due to previous summer school classes, he had enough credits to receive his GED and, since his friends were all going to college, he decided he would give it a try as well. He was acquainted with the president of Indiana University, who helped him gain entrance to the school. “I know this would never happen today,” he says. “My getting into college was an absolute miracle.”

To earn his way in school, he took a job writing Fortran programs for the dean of economics, making $3.50 per hour. He asked Dean Whelan if he could work as many hours as he wanted. When the dean told him yes, he began working 50 to 60 hours a week. “I didn’t spend much time in the classroom,” says Luddy. “But Dean Whelan was the first person who made me feel like I had some value. He saw something in me that inspired me to do more.”

At the end of his freshman year, Luddy left school to work full time. Even though the classroom did not work for him, his experience with Dean Whelan put him on solid footing for the rest of his life. “That’s why I believe in the mission of the Horatio Alger Association,” he says. “It’s not just giving money to young people who need it; it’s telling them that they have value—and then it’s backed up with mentorship. That makes such a big difference.”

After reading an article about Dr. Gene Amdahl starting the Amdahl Corporation in California, Luddy applied for and was offered a job. Dr. Amdahl had created a super computer at IBM and was now competing with the tech giant in the mainframe market. “I was the least knowledgeable person there,” says Luddy. “But the great thing about the company was the fact that everybody knew that to be successful, we all had to be successful. These were smart, knowledgeable people and they were willing to educate me.”

From 1990 to 2003, while working as the chief technology officer for Peregrine Systems, Luddy had amassed a $35 million fortune in company stock. Sadly, the company was forced in 2003 to declare bankruptcy due to fraud committed by the company’s top executives. “I lost everything overnight,” says Luddy. My company stock was worth zero. I was 49 years old and realized I would have to start all over. At the time, I thought this was the worst thing that could or would ever happen to me, but I was wrong because in the end it was the best thing.”

Luddy decided to look at this major loss as an opportunity, and decided it was time to go into business for himself. In 2004, just two weeks before turning 50, he founded ServiceNow, a cloud-based company that provides software as a service. In 2018, ServiceNow was ranked No. 1 on the Forbes Most Innovative Companies list. The company has more than $8 billion in revenues and more than 20,000 employees.

Luddy’s definition of the American dream is the opportunity to be the best a person can be and to be rewarded for his or her efforts. “Other countries have opportunities,” he says, “but there is something different about America. I have lived in five European countries and I have worked in 25 other countries and I have never seen an opportunity like we have in the States. Americans have this unique ability to take great innovations and build an organization that makes sure that innovation gets spread as far as it possibly can. That’s why I believe the phrase: Only in America.”

When offering advice to young people, Luddy believes it is important to pursue your passions. “In addition, it’s important to work with people you enjoy and who are willing to educate you. It’s all about aptitude and attitude. What’s your aptitude for learning new things? And then, how hungry are you? Do you have intellectual curiosity? Aptitude and attitude are the drivers of success.”

Luddy has never forgotten his experiences on the campus of Indiana University. His large donation to the school in recent years has resulted in the Luddy School of Informatics, Computing, and Engineering, which now includes the newly built Luddy Center for Artificial Intelligence. “While it didn’t work out for me, I believe higher education is more important today than ever before. More has changed in the human condition in the past 200 years than in the prior 12,000 years. This change is non-linear, ever accelerating. By 2050, I predict that medicine, energy, transportation, communication, and sustenance will all be radically different than today. Our young people need to be prepared for these rapid changes and higher education is the place to start.”

Excited about his Horatio Alger Award, Luddy says, “Becoming a part of the Association is a great honor not only because I am being recognized for my success in business, but also my selection to serve as a role model for those who are facing adversity. I am committed to doing all I can to help the Scholars. By applying for this scholarship, they have already proven that they have the right attitude. Going forward with the Association, they will learn their value—their own personal value as well as their value to society. They will feel our support, and I hope that will propel them to be all they can be.”