DIvIDEnD - Stephen M. Ross School of Business - University of ...

photo by scott stewart
a:
It’s summer 2005 in Baghdad. capt. Sherman
Powell, MBA ’09, is commanding a company of
264 troops in the u.S. Army’s 1st Battalion, 64th
Armored Regiment. And he’s losing sleep.
It’s not because of the persistent insurgents.
Powell and his troops have trained for those and are
well-prepared to meet the enemy. What’s keeping
him awake is the $42 million in military equipment under
his control. That’s more than 10,000 items. And
while the Army has a computerized inventory system,
it doesn’t extend to small units in the field. Powell’s
only tool is an archaic paper-and-pencil system.
“i saw right away that the hardest part of the mission wasn’t
going to be fighting the enemy,” Powell says. “it was keeping track
of our equipment. i had 14 binders full of paper.”
accounting for inventory might have been the supply sergeant’s
job, but it was Powell’s responsibility. he’d seen one officer’s
military career ruined because of a missing cargo truck, and he
wasn’t going to lose his own command over an errant piece of
gear. so Powell developed a simple click-and-drag computer program
to assign equipment to his lieutenants and sergeants. they
could confirm by logging on each day and accepting. everybody in
the company could track each tank, truck, rifle, machine gun, flak
jacket, and pencil.
EnliSTinG THE TRooPS the system quickly gained traction
through word of mouth. “with everything the military has to
worry about, nobody ever took the time to simplify the inventory
management system or extend it to the bottom of the organization,”
Powell says. “it just took off on its own.”
even after he left the service and entered business school, Powell
continued to receive requests to use his system. then, during an
internship at google, he hit upon an idea to monetize the operation.
officers had been asking if they could order new equipment
through his website. so Powell decided to offer the equipmenttracking
service for free and sell merchandise for profit.
“i picked up a lot working at google,” he says. “it shows you can
build a successful business by giving away a service for free.”
in his second year at Ross, Powell’s team won the michigan Business
challenge, secured $38,000 in prize money, and officially
launched the website armyproperty.com. a meeting with Sam Zell,
AB ’63/JD ’66, a founding benefactor of the Zell lurie institute
for entrepreneurial studies at Ross, led to venture financing from a
fund run by Zell’s company.
suddenly Powell was an entrepreneur. he turned down his
dream job offer from the Boston consulting group to nurture his
startup, which ended 2009 with $650,000 in sales. Powell and his
team aim to double that figure in 2010.
“i never thought i’d be a sort of war profiteer, but we take pride
in delivering the best value for the government,” he says. the company
has briefed generals at the Pentagon and other top officers in
the army materiel command. Powell says the reaction has been
“very, very positive.”
THE ADVAncE armyProperty recently cleared a new front in
the contracting business after a supply officer in a national guard
unit asked to order 950 camelbak water backpacks through army-
Property. Powell submitted a bid that would net him a profit, and
waited to see what would happen. two days later he had a contract
for $50,000.
since then armyProperty has been competing with more established
suppliers to win additional bids for military equipment.
Powell believes the fact that he and other members of his team are
ex-military personnel lends credibility to their operation.
“Because people are using our system for daily tasks, it’s just as
easy for them to go through us on supply orders instead of searching
for another distributor,” he says. “we work hard to make it easy
for them.”
that hard work continues to pay dividends. for example, army-
Property ranked third in a recent bid for an order of 650 escapeand-evade
survival backpacks for helicopter crews in Powell’s old
unit. But since the company has such a good relationship with the
contracting officer, it won the $300,000 deal for the packs and all
their components, which now are being used on a daily basis in
afghanistan.
Powell plans to keep that momentum going to further advance
in the military supply business. he also hopes to pick up some it
work to help simplify other existing, in-house military systems.
“i just want to be the guy who makes life easier for troops on the
ground,” he says. —Terry Kosdrosky
spring 2010 DIvIDEnD 41