Mongolian Cashmere on Kickstarter

I recently came across an announcement of the first Mongolia-linked Kickstarter project (at least as far as I’m aware). Kickstarter, of course, is the website that offers entrepreneurs and others an opportunity to crowd-source funding for projects and business ideas. The project is called Naadam Cashmere and they are still raising funds for their initial production on Kickstarter. Fascinated by the project, I asked Matthew Scanlan, one of the founders, a couple of questions about their project:

– Why Mongolia? What’s your connection with Mongolia?

We were philanthropists before we were designers. My business partner Diederik (and college roommate) was traveling around Asia while studying economics in Beijing  during a semester abroad. He eventually made his way to Mongolia where he stayed with a family of Nomadic herders…and thats where it started. He fell in love with the country and the people but he also learned the struggle of the nomadic Mongolian herder. Their lives depend on their herds and their herds depend on the climate conditions. Unfortunately the climate it changing drastically and its becoming harder for them to sustain this nomadic life style. Mongolian herders herd goats that produce the best natural cashmere fibers in the world. Their superiority is largely due to the climate and the cultivated expertise of Mongolian herdsman. It was a perfect storm from which Naadam Cashmere grew organically out of.

– Conventional wisdom on Mongolian cashmere (manufacture) is that a) Mongolian raw cashmere is the best in the world, but b) Mongolian cashmere manufacture was destroyed by Mongolia’s WTO entry in 1997. Do you share that analysis?

I think that in 1997 the cashmere manufacturing industry went through some major changes and for a time was inferior to other great cashmere manufacturing countries such as Italy or Scotland; however, a lot has changed in a decade. Our Mongolian manufacturing partners produce extremely high quality, luxury garments. The technology around the world has innovated and Mongolia, maybe not as a whole but certainly its major players, have adapted. The garments that come out of Mongolian manufacturing are on par with Italian manufactures. They are different garments though, employing differentiated techniques.

– Cashmere manufacture is always mentioned as one of the potential economic diversification strategies for Mongolia beyond natural resources, but then typically dismissed with, “It’ll never work.”. What makes Naadam Cashmere different?

The manufacturing side of the cashmere industry in Mongolia is relatively small, there are only a few players and even within that small group only a few have the capacity to compete on an international level. For Naadam Cashmere our manufacturing partners operate on the perfect scale. There is a lot of opportunity to grow using current logistics. It is our goal to brand ourselves as Mongolian made. It is important that we expose the capacity and capability of their operations. We support vertically integrated manufactures and the Mongolian economy.

– How are Mongolian herders involved in the project and, ultimately, the manufacture and fortunes of Naadam Cashmere?

Mongolian herders make up the very base of our supply chain; all our raw cashmere fibers are sourced in the outer planes of Mongolia. These are the herders that Diederik lived with while he was there and these are the people (beautiful people I might add) we vowed to protect with our micro-economic investment strategy. We use 10% of our profits to buy livestock insurance premiums for the herders we buy our raw fibers from. So, our business model works cyclically, where we take from the top to support the bottom. It is good business but more importantly it’s about helping people maintain their values and traditions, the very essence of their culture. At Naadam we diversity our investment strategy by working to educate nomadic herders on the market landscape but also the physical landscape. We support programs that use satellite and people on the ground to show herders what areas are over grazed. We also work with educators who show herders the intricacies of cashmere market values.

– Do you have Mongolian business partners? Why? Why not?

Technically, we have no law binding partnerships in Mongolia. We like doing business the old way…on a handshake. However, we work exclusively with our Mongolian manufacturer. Additionally, we work  on a local level with banks and the IBLIP (the Index Based Livestock Insurance Program) to pay out insurance premiums and continue to protect the nomadic lifestyle. There is no particular reason for not have official Mongolian partners. I think down the line we work to make our arrangement more official. It has more to do with the stage of our business rather then the state of Mongolia.

– One of the challenges for Mongolian cashmere has been branding. Industry and fabric experts know about the qualities of the raw wool, but there is no strong brand presence for cashmere sourced from Mongolia. Do you see this as a challenge? How do you distinguish yourself from other Mongolian cashmere brands?

I actually view this as a strong positive. We have an opportunity here to differentiate through our supply chain. We are using the best fibers in the world and produce amazing quality garments using a vertically integrated Mongolian manufacture and supply chain. I don’t think that this is a challenge at all because at the end of the day the products will speak for themselves. Naadam Cashmere will distinguish through our branding and design concept. We are developing a contemporary brand built on contemporary ideas that resonate with a generation of people that are beginning to demand more from the brands and products they buy and support. Are key design differentiators will be knit, color, and style and we are in the process of working on a new collection. There are no other Mongolian cashmere brands that work off of a triple bottom principle and a cyclical business model but that is who we are and why we exist.

– The designs of your initial collection strike me as fairly conservative (as much as I personally welcome the arrival of the cashmere hoodie) and don’t hint at Mongolia with any design references. Why not?

We designed our initial collection in response to our friends; the style was never going to be linked exclusively to Mongolia. That just was not our idea or aesthetic. To expose the issues and promote the Mongolian cashmere industry we wanted to make things that were inspired by the people that would buy them, a different type of nomad, and Urban Nomad.

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