An Unexpected Journey to the Source — with Matt Scanlan of Naadam Cashmere

“People were like ‘How did you think of this idea?’ And there is no genius in this. If you were there because of the reasons we were there, you would be thinking about how you could impact them.”

On the 21st episode of the Loose Threads Podcast, Matt Scanlan spoke about his unexpected journey to the sparsely populated Gobi desert region of Mongolia, which led him to start an NGO in addition to Naadam, a direct to consumer cashmere brand.

After quitting a stressful job on Wall Street, Scanlan visited a college friend in Ulaanbaatar, the capital of Mongolia. Soon after his arrival, he was introduced to two Mongolians who grew up in families of nomadic herders. They followed their new friends to the Gobi desert to learn more about nomadic life. Eventually, Scanlan was able to break through the language barrier with their hosts who, like many nomadic herders, make their living by raising livestock.

“We’re asking these questions and it turns out maybe there’s a way we can help them. Investing in breeding and veterinary programs and livestock insurance are going to remove some of the variables of living like this.” When he returned to the states, Scanlan and his friend started an NGO to provide these services for the herders.

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Scanlan returned to Mongolia a year later during the the season when traders travel to the desert to purchase the raw material for cashmere. Immediately he noticed something fishy.

“Traders coming out to remote regions to buy rare raw material right off the goat were operating in unregulated and purposely fixed marketplace.” The traders were charging a massive markup to the herders, which the herders could do nothing about.

The raw material would then travel through a complex supply chain that made the final cashmere product too expensive and low  quality. At the same time, the herders were making a miniscule amount of money for their efforts.

“We saw all of this and we came to a simple conclusion: that to help these herders the most, we needed to become the traders because what we could do is we could pay more.”

Soon enough,Scanlan drove out to the desert in a land cruiser filled floor to ceiling with shopping bags of cash. He bought up as much raw material as he could and set out to redefine the cashmere supply chain.

“We didn’t have to sell it to a broker, that broker didn’t have to sell to a mill, and the mill didn’t have to sell to a manufacturer: we could do all of that.”

After figuring out the supply chain that would allow a new type of cashmere brand to exist, Scanlan founded Naadam. The brands  goal is not only to benefit the herder and the consumer, but to also increase sustainability and to leave as little of a footprint on the environment as possible.

With a wide range of goals and businesses housed beneath the Naadam umbrella, Scanlan has created one of the most vertically integrated direct to consumer brands today. Yet even with its many ongoing projects, Naadam’s central mission stays true to its name, which directly translates as “games” but is also the title of a celebratory festival in Mongolia.

No matter where Naadam heads in its future, to Mongolia or elsewhere, Scanlan wants to stay true to his original goal: “Everywhere we go we want to celebrate and tell the story of the places and the people.”