CARRBORO — Michael Truesdale and Justin Kelly have a big vision. They see a future where the retail market exists without cheap knock-offs and secondhand scams; a world where your products are validated. It’s a mission, as Kelly says, “to [build] an entire ecosystem of transparency in the market.”

And they’re starting with sneakers.

Michael Truesdale of SneakPeek on the Venture Connect stage

Michael Truesdale of SneakPeek on the Venture Connect stage

Booming sales and counterfeits

Secondhand apparel, which includes sneakers, is a booming business. According to a 2023 thredUP report the global secondhand apparel market is expected to balloon to more than $350 billion by 2027, growing significantly more quickly than the overall apparel market.

Sneakers by themselves represent approximately 6% of that pie. According to RunRepeat, a sneaker testing site, the resale sneaker market created $11.5 billion in revenue for 2023, roughly 15% of the primary sneaker market. Limited availability and hype generate sales long past a sneaker’s primary release, and the secondary markets make exclusive and expensive brands more available. There’s also appeal in vintage sneakers that generate nostalgia.

But the challenge with sneakers, like some other types of popular secondhand merchandise, is the risk of fraud and fakes. Globally, the market for counterfeit goods is a trillion-dollar industry, and fake footwear is a top target. Consumers may not realize they’ve bought a fake, but once they do, getting reimbursed is a laborious task requiring proof, which can be difficult and time-consuming to acquire.

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It is this problem that Truesdale and Kelly are seeking to address through their start-up, SneakPeek.

AI and accreditation, tag and track

The company starts by using AI to help authenticate the shoes, using images to detect and identify the brand. From there, the tool assesses the shoe for any defects or anomalies that might trigger a more thorough examination. And if the shoe is the real deal, SneakPeek aims to offer tag and asset tracking through embedded NFC technology. This feature is a key piece of the process, enabling the validation to “live” with the product long-term.

To begin, SneakPeek is hoping to streamline processes for businesses that work in large volumes of secondhand goods such as Stockx and eBay.

“When you’re getting that volume of inventory and you have one human analyzing these things, the human eye gets tired,” explained Truesdale. “We are providing a tool to aid in detecting defects and anomalies faster.”

Companies gain credibility by removing the threat of counterfeiting for their customers. And the consumer gets a real product, but also one with validation if or when they decide to resell.

“It provides authentication support to these large businesses, but it provides transparency to the end customer,” said Kelly.

By moving into this – or any – phase of the product lifecycle, SneakPeek is creating a baseline for an ecosystem with product accreditation. And this is where the real transformative power exists: the potential to remove the threat of fakes from the secondhand market. At least, that’s their hope.

“With our tag and track, and asset tracking abilities, now the customer has visibility into this authentication history,” said Kelly.

“It is like the Carfax for collectibles,” Truesdale elaborated, “where the history and ownership history is provided to you.”

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Scrappy and hiring

“Carfax for collectibles” is both catchy and a clear preview of just how big this business could be. But SneakPeek has a long way to go before they can claim that title. The company is seeking funding for its initial pre-seed round.

Last month, Truesdale got on stage at Venture Connect to pitch to investors in the AI track. Truesdale enjoyed the event, getting to meet some VCs, and connecting away from LinkedIn. But he was most enthusiastic about some connections he made with other start-ups.

“The founder network is really good because we’re sharing information, we’re making introductions for one another. So that’s been very insightful and helpful across the board.”

As for the company’s next steps, Truesdale and Kelly hope to hire a few people to help with AI and business development, however, they’re also wary of over-hiring at this key time.

“We’re being mindful of that, and we don’t want to grow too big too fast. We’re very scrappy and resourceful in our own ways,” said Truesdale.

“But we have, we already have candidates in the pipeline,” said Kelly, “who are very interested and believe in the vision.”

It’s a vision with the potential to transform a major industry.