It’s time to talk about shoes. Sneakers in particular, and not just your everyday pair of running shoes but high-end pairs designed by the likes of Kanye West and Pharrell Williams. These fancy kicks can sell for thousands of dollars, but how do you know if you’re getting the real deal when buying online? That’s where GOAT, co-founded by Eddy Lu, comes in. The sneaker resale marketplace company authenticates high-end sneakers. Lu sat down with Marketplace host Kai Ryssdal to talk about how to spot a fraud, and how machine learning can help with sneaker authentication. Below is an edited transcript.
Eddy Lu: We’re an online sneaker marketplace but we started in 2015 really to solve the issue of fakes. I mean Nike is the most counterfeit brand in the world.
Kai Ryssdal: OK, so first of all, people are going to the effort of faking Nike sneakers?
Lu: Exactly, because you know sneakers, coveted ones, go for hundreds to thousands to tens of thousands of dollars.
Ryssdal: Tens of thousands of dollars?
Ryssdal: How do you authenticated it? Do you have — I can’t believe I’m saying this — sneaker experts on staff?
Lu: Yes, so we have a couple dozen sneaker authenticators and they’re basically the heart and soul of our operation. I mean they are so passionate about sneakers. They see hundreds upon hundreds of shoes every single day. And so just by sight, touch, smell they can see, “Oh, something looks fishy. Something smells fishy. Let me look more into it.” And with that you know they are the the experts and they really identify sneakers on top of that …
Ryssdal: Well, so I’ll tell you what. So you’ve got two shoe boxes here and this is the “show and tell” portion of the interview. Let’s get the headphones and the keyboards out of the way. Grab those. Tell me what I’m looking at and how you know whether they’re fake or real?
Lu: So this is the Yeezy Boost 350, which is Kanye’s line with Adidas that I mentioned earlier. So we have two different pairs, a real pair and a fake pair. And so I’m just going to start even with the box. Not even looking at the shoe. You can tell, even the box, this is the fake pair.
Ryssdal: No no no! Don’t tell me!
Lu: Oh sorry.
Ryssdal: All right. All right. So honestly, you can tell but I can’t. So wait a minute. So what’s the price point on these things out in retail market?
Lu: Retail wise, it’s about $220 but resale on our app it’s about $400 to $500.
Ryssdal: All right. So we’re talking about a $400 to $500 pair of sneakers. I guess the boxes are a little bit different right? The real box is sturdier and better looking. But you know, you have to sit here and look at it for a minute. I mean how do you know?
Lu: You definitely do, and this is why our authenticators are so important. So if you look at this box it’s clearly smaller and shorter than the real box which is important. And that’s before we even get to the shoe itself.
Ryssdal: So I totally see that. But again only because you’re pointing it out. Alright, let’s open these boxes and figure out what’s what. You take the fake one I’ll take the real one —or at least I believe they’re real only because you tell me, I don’t know. I can’t even open this box.
These are the real ones. Could you tell?
Lu: It’ll be right here.
Ryssdal: He’s like, “no don’t rip the box! That’s a $400 pair of shoes!” If I mix them up are you going to be able to tell which is which?
Lu: I’ll be able to tell, yes.
Ryssdal: All right, so first of all, these are not great looking shoes but that’s just a subjective thing. So the box thing I noticed because you pointed it out and I’m looking, I know which ones real and I know which one is fake.
Lu: So we picked a very good pair of fakes.
Ryssdal: See so you can’t blame me for not being able to tell.
Ryssdal: All right. Yeah I mean honestly, if I were just looking, I would not be able to tell, truly. So, what are you looking at?
Lu: So the stripe on the real one actually extends further than the fake pair right here.
Lu: And then if you look down here this kind of striping is a lot higher.
Ryssdal: Sure. And and that’s a mark of authenticity or fakeness?
Ryssdal: I guess if you’re spending $400 this is worth it. But, boy it’s a lot of trouble to go through to make sure you got real shoes.
Lu: If you’re spending $400 you don’t want to buy a replica pair you want to buy the real pair.
Lu: And so that’s the value proposition that’s been really helping us succeed.
Ryssdal: Are you a tech company? I mean it’s a mobile app right? And it’s it’s technology based. Are you a tech company or a shoe company or what are you?
Lu: We are a tech company. I mean, I’m a computer science major. My co-founder is a designer and we really wanted to inject technology into this experience so we’re even building machine learning models since every pair of sneakers that comes in we’re taking pictures of it, we’re documenting so that our machine learning models can get better and better at identifying and assisting our authenticators in terms of identifying fakes.
Ryssdal: Have you heard from Jeff Bezos at Amazon or Tony Hsieh of Zappos, also owned by Amazon?
Lu: We are very fond of them, unfortunately we have not. They have not called us yet but my phone is ready when they do.
|Inside the mind of Manolo Blahnik, the king of shoes|
|Looking for a new investment? Check your shoe closet|
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?