With 260 troops under his command and almost $42 million worth of equipment to manage, Sherman Powell, a U.S. Army tank officer had a lot of responsibility and no easy way to track where his equipment was at any given time. Powell, an 11-year U.S. Army vet, built a solution in the field out of necessity. And then, through the education he received from the Stephen M. Ross School of Business in Ann Arbor, Mich., he transformed that solution into a business.
Powell recently chatted with FOX Business about how Army Property is helping our armed forces focus more on missions and less on inventory management.
Picture being in Iraq in the summer of 2005 with a list of equipment the size of a telephone book and no easy way of taking this list with you. Equipment was always on the move and scattered around Eastern Baghdad; we didn’t have a way to subdivide or transfer ownership in a way that would allow me to point at any piece of equipment and ask ‘who is responsible for that right now?’
I witnessed a lot of lapses in accountability in other units, and decided that we were not going to be the next organization that fails because we didn’t know the location of our rifles or night vision goggles.
I applied my knowledge to fix this problem on the spot by creating a system that lets people organize, delegate and account for equipment. Initially, the system grew through word of mouth. After I left the service, people kept using it and I never bothered to turn it off.
I had been in Korea for two years and went straight to Middle East for two more years. I had led troops in combat and achieved all of my wildest dreams in the military and was ready to move on.
For the first year of business school I pursued a conventional path. I wound up with internships at Boston Consulting Group and at Google after the first year. I wanted to do two internships because I hadn’t worked in the private sector since I was a dishwasher at the age of 17.
After the summer, most of us had full-time offers from our employers. It would have been very easy to accept the proverbial briefcase full of cash and move on, but in my business school application I said I would be the guy who helped fix the military supply system.
In my second year of business school, our team put together a business plan for how to turn this system into something commercial. We won the university business plan competition and ended up with tens of thousands of dollars. As a result, I was introduced to Sam Zell, who had funded the business school’s entrepreneurship center. He gave me his business card and said to give him a call when I was ready to raise money. Suddenly this very far-fetched plan became a much more realistic possibility.
I spent the summer working as hard as I could to get system off the ground. We found that in addition to tracking existing equipment, the military wanted us to sell them new equipment. We did a $50,000 order from a National Guard officer who needed 1000 CamelBaks [hydration backpacks]. That was enough of an indication that there was something there.
I wrote to Mr. Zell in July and presented again. In September I got a term sheet from his company. It was Sept. 15, 2008, the day Lehman Brothers collapsed.
On a personal level the MBA program gave me two years at a magnificent educational institution that helped me decide what my priorities were in life and what I wanted to do with myself. The program put me in the company of hundreds of extremely talented people. I got most of what I set out to learn from peers.
The biggest and most valuable thing I got was the opportunity to take a dream or project or idea for a company that I wanted to start and apply deadlines and apply accountability and apply a process to the steps that you take to build a company from the ground up. What was amazing to me was how well the team and I were able to anticipate the things that would happen in the first few months after we got funded. In the military we say, “No plan survives first contact with the enemy.” I was actually pretty surprised at how well things played out to our expectations.
We now have 10 people on our team and sales have just about doubled every year. We are helping to manage about $2.5 billion worth of equipment, and have almost 50,000 soldiers using our system. We are also doing thousands of orders per year of new equipment.
We’d like to keep growing at our current pace. I don’t want to get much bigger than 20 people.
I'd like to get to the point where I know that we have done everything we can to take care of everyone who has a need for the services we are providing. We are still at war. My overwhelming motivation is to make sure nobody has to decide between tracking down a missing machine gun and properly planning for the next day's combat mission.
Small businesses are often launched when someone finds a gap in the market and fills it. Such was the case with Sherman Powell, a U.S. Army tank officer, who needed a way to track where his equipment was at any given time.