College Students Stuck in Desert Spot Lucrative Business Opportunity; Inspire Future Entrepreneurs

Sometimes even adversity could reveal a new opportunity behind it, and all it takes is enough imagination to build lucrative ventures from them. College friends Matt Scanlan and Diederik Rijsemus found themselves stuck among Mongolian goat herders in the Gobi Desert for three weeks during a vacation in 2013 when they came up with a business idea. They decided to make low-priced cashmere goods by purchasing wool directly from these herders, skipping the middlemen. With no industry experience and hardly any money, they raised capital by putting up Scanlan’s parents' home as collateral for a $2.5 million loan from a private lender. They then withdrew everything in cash and went deep into the desert to buy their company, Naadam’s first 50 tons of unprocessed cashmere wool.

After that, the company went on to bring in $100 million in total revenue selling a wide range of cashmere products in 2022. The products currently sell online in stores like Saks 5th Avenue and three of its own in New York and Los Angeles. 

After the two friends obtained the wool, they sent it to Beijing, where it was cleaned, after which the wool traveled to Italy where they got it spun into yarn by a third party. The co-founders then sold most of that yarn to pay off their loan and used the leftovers to make sweaters, Scanlan told the publication. Matt Scanlan then took the sweaters to an east coast sales trip, pitching “every store I could” between Charleston and South Carolina. 

"I’d pull the sweaters out on the table and I’d lay them out neat and I’d tell my story. We had 50 orders, each one like $1,000 and I learned how to perfect my story. I didn’t realize at the time that I’d be doing that for the rest of my life." Within the first few years, the business was already doing pretty well. In 2019, the co-founders decided to post a video online, that details their origin story and their vision for the company. The video took off and was video more than 35 million times. According to Scanlan, the video change accelerated their growth and "defined Naadam’s success for a long, long time." 

"It probably is still the best advertisement we have for who we are and what we’re about," he added. The company's bestseller is the $98 sweater which is known for its quality. "I need to make sure that that product is amazing, and you get it, and you go, 'I’m going to tell everyone I know about this, and I want ten more of these, and I want every single color.' That’s how we make money," he says. 

Naadam's success story is all about recognizing the opportunity and believing in the vision. Moreover, in these businesses execution plays a key role. Today Nadaam has already picked up more than $80 million in funding from investors like private equity firm Vanterra Capital. While there is no denying the fact that the two men worked hard to get where they are today Scanlan cannot help but credit part of it to luck. "You can have a great business plan, but if you don’t have a little bit of luck and opportunity on your side, it kind of doesn’t matter," he says.