Hey friends,
Back again with another edition of The Founder Newsletter - this is Episode 18. If you’re new here, my goal is to give you a quick synopsis of what got me thinking from this week’s episode of The Founder Podcast in 5 minutes or less.
No idea what The Founder is? Read this.
Mission control:
Learn -> Founder favorite resources
Free money -> Discount codes
And who am I?
I’m Kallaway - a future founder trying to get some answers before I jump in the ball pit myself.
Let’s get it.
This Week’s Episode (Ep 18) 🐑
Guest -> Matt Scanlan, Co-Founder and CEO of Naadam
Mission -> Naadam goes straight to the source of the world’s best cashmere, Mongolia’s Gobi Desert, and works directly with herders to bring you high-quality, sustainable and unbelievably soft knitwear at prices that are fair for them — and for you.
Discount -> Use code “TheFounder15” for 15% off all Naadam products
Episode available on -> Apple Podcasts | Spotify | Website
In this episode we talk with Matt about…
🐑 What cashmere really is and why it’s softer than everything else
💰 How Matt ended up with $2.5M in cash in the middle of the Gobi Desert
🙂 What it’s like being CEO of Naadam, Something Navy and Thakoon
🛠️ Matt’s thoughts on the future of DTC retail and what he’s building for the next 10 years
📋 Matt’s philosophy on angel investing and the best deals he’s hit/missed on
Summary 🔍
What is Naadam and how did Matt get started?
Despite getting kicked out of more schools than he was let into, Matt left college early after landing a great job in private equity.
After 3 years and a lot of burn out, he decided to take a break and travel throughout Asia. When he got to his first stop in Mongolia, he wound up deep in the countryside, looking to experience the true nomadic lifestyle.
After living with a family of goat herders for the next month, he started to notice some of the pain points of their lifestyle, and launched a nonprofit with initiatives like livestock insurance, water & grasslands projects and veterinary care to help improve and preserve their culture and livelihood.
What he realized was that the economic system the herders were a part of, selling goat fiber used for cashmere to local buyers, was rigged. The buyers would come in, set a super low price, and get away with it because they were literally the only buyer in town.
Matt realized that the best way to help his nomadic friends and other communities like theirs was to buy up all their raw material himself. And that’s how Naadam was born.
Today at Naadam, Matt and his team make men’s and women’s clothes from the best cashmere in the world, straight off the backs of goats from Mongolia’s Gobi desert.
They cut out all the middle men from the traditional cashmere trade and work directly with local herders so they can pay them 50% more and charge you 50% less for the softest knitwear on the planet.
Their $75, 100% cashmere sweater blew up their business when it launched in 2018, and today, they employ over 100 people.
Perhaps the most impressive thing about their business is the commitment to sustainability from day 1. They have goals to ensure livable wages for all stakeholders across their supply chain, promote ethical conditions for the animals that produce their raw materials and go carbon neutral by reducing emissions and leveraging renewable energy.
In addition to Naadam, Matt has a couple of other ventures on his plate. He serves as the Co-Founder and General Partner at Magic Hour Ventures, a seed stage venture fund geared to back entrepreneurs focused on reducing the environmental and social impacts of modern consumption. Magic Hour is focused specifically on companies within consumer, textile, produce, technology, supply chain & logistics.
Matt also serves as acting CEO for two other DTC apparel brands, Something Navy and Thakoon.
Matt’s Startup Manifesto 📜
What’s a Startup Manifesto?
At the end of every episode, I ask all of my founder guests the same question:
If you had to write a Startup Manifesto with 5 of the most important key lessons or pitfalls to avoid when starting out, what would they be?
Here’s what Matt had to say:
Have humility in the things you don’t know is critical
Be grateful for both opportunities and mistakes.
Treat everyone equitably.
You have to fundamentally work harder than everybody else to do this.
You have to have a healthy fear of failure. Matt just never wanted to fail and that guided him for a long time.
What Got Me Thinking From the Episode 🤔
After reflecting on my conversation with Matt, here’s something that really got my wheels spinning:
Having a healthy fear of failure 🤯
There’s a popular trope in startupland about not being afraid to fail.
Many of the great entrepreneurs talk about their willingness to take chances and experiment, without worrying about how it will look or how people will think about them if the outcome isn’t favorable.
And I agree with that in principle - starting a company is all about experimentation, collecting new learnings, iterating and repeating. If you’re afraid to go through that cycle over and over, it’s unlikely that it will work out.
But a lot of people on social media take it a bit too far when it comes to their sensitivity around failure and I think there’s a bit of nuance in the topic.
In my conversation with Matt, he referenced that his fear of failure is what propelled him to work harder to ensure Naadam was a success. He simply did not want to fail, which likely provided more firepower than almost any other internal motivator.
If he would have absolutely ignored failure or never been afraid of it, he likely wouldn’t have been so desperate to succeed.
I’m super aligned with Matt on the way he thinks about this topic.
It’s important to not be afraid to try. I think the “fear of failure” that people feel which prevents them from trying or experimenting needs to minimized at all costs.
But once you’re moving forward and have committed to chasing after something in your mind, I think a healthy fear of failure is important.
That fear of failure becomes the big boulder that’s rolling behind you and will squash you if you don’t run fast enough.
The urgency and requirement to succeed that the boulder provides can be incredible fuel and motivation.
It’s definitely a nuance and a dance around the way the phrase “afraid to fail” is interpreted, but I think it’s important to recognize that the best path forward is not to blindly ignore failure forever.
What do you think?
Wrapping it Up 📕
I hope you found this interesting and inspiring! If so and you want to help support my journey to bring The Founder to millions of people across the world, here’s a couple things that would be really valuable to me and the show:
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Listen to the full podcast episode with Matt on Apple or Spotify. If you don’t have an hour to listen to the full episode, pick a couple of topics and skim through (topic time codes in the show notes). Matt’s background story is wild at starts at 4:16 in the episode.
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Till next time ✌️
Kallaway
Want more? Check out other companies we’ve featured on the show!
— 🧑🦰 17. Kombo Ventures | Kevin Gould
— 💍 11. The Clear Cut | Olivia Landau and Kyle Simon
— 🥘 7. Kettle & Fire | Justin Mares
— 🕵️ 6. Alpha | Nis Frome