Demand-Side Disruption: Evidence from the US Mobile Dating Application Industry

Abstract

The question of how new entrants can displace incumbents has attracted considerable attention in the innovation management literature and practice. Prior research has enhanced our understanding of how, in a disruption event, a newcomer can make shifts in the consumption behavior of the mass market. Most studies, however, tend to focus on the technological dimension of the new products introduced or on specific resources that newcomers possess. More recent theoretical developments have pointed to disruptive forces that emerge from the heterogeneity of the demand environment. The goal of this paper is to explore why and how newcomers can disrupt the market through improving the product along overlooked dimensions benefiting from heterogeneous demand environment. Doing so, we theorize and empirically examine the shift in the demand-side elements that resulted in the displacement of incumbents in the U.S. dating application industry during 2011-2015. Our empirical analysis is based on the text analysis of user-generated app reviews as a novel way to capture latent product dimensions that are crucial for customers.