The Impact of the Invite- Only Strategy on Initial User Adoption

Home , Fear of missing out, Social media marketing

An Exploratory Investigation of Social Networking Mobile Applications

MASTER DEGREE PROJECT THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30 PROGRAMME OF STUDY: Digital Business AUTHORs: Ronja Schoenberger & Stefanie Seeburger JÖNKÖPING May 2021

Master Thesis in Business Administration

Title: The Impact of Invite-Only on the Initial User Adoption – An Exploratory Investigation of Social Networking Mobile Applications. Authors: Ronja Schoenberger & Stefanie Seeburger Tutor: Henry Nelson Lopez Vega Date: 2021-05-24

Key terms: Invite-Only, App Adoption, Closed Social Networks, Artificial Scarcity, Technology Adoption, User Motivation, Initial App Adoption, Social Networking Mobile Applications

Abstract

Background: Social networking mobile applications are designed to socially connect users among each other to consume but also to produce content. Especially because these apps represent a high potential to acquire revenue streams through advertisements, but also to gain customer insights, companies are interested in entering this market by creating new social networking apps. However, switching costs for users are high due to the varied user base of established social networking apps. Accordingly, marketing strategies need to be created to enter the market to target users’ interests. One concept to do so is distributing invitations for the social networking app that can be shared among users. The invite-only strategy has been successfully used to establish themselves in the market by for example Facebook, but also recently with the social networking app Clubhouse. To apply it effectively the motivators of the users to initially adopt invite- only social networking apps are important to understand. Purpose: The purpose of this study is to generate an in-depth understanding of the motivators that foster the initial user adoption of social networking mobile apps based on the invite-only strategy. To investigate the motivators, it is crucial for this study to gain knowledge from the user perspective. In that case, we will contribute our derived knowledge to the theory of technology acceptance, scarcity in digital marketing, and virtual social networking apps. Research Question: Why do users initially adopt social networking mobile applications using an invite-only strategy? Method: Ontology – Relativism; Epistemology – Social Constructionism; Approach – Inductive; Data Collection – 14 Semi-Structured In-Depth Interviews; Sampling – Purposive, Convenience, Snowball; Data Analysis – Grounded Analysis Conclusion: As a result, a framework was derived depicting the main motivators for users to initially adopt invite-only social networking apps. Through our empirical data, we found out that Artificial Scarcity, Closed Network, and Social Influence motivate users to initially adopt invite-only social networking apps. Additionally, Contributing Factors were identified to influence the initial adoption, although they are not directly influenced by the invite-only strategy. The framework further describes the interrelations between the identified sub-categories affecting the initial adoption. We conclude that the main motivators are desire- and fear-driven. The framework can be used by marketers to design invite-only strategies more effectively and consistently to attract a large group of initial users and establish themselves in the market.

Table of Contents

1 Introduction ...... 1 1.1 Background ...... 1 1.2 Problem Statement ...... 3 1.3 Research Purpose and Research Question ...... 4 1.4 Outline ...... 5 2 Literature Review ...... 6 2.1 Literature Review Procedure ...... 6 2.2 Technology Acceptance ...... 7 2.2.1 Technology Adoption Models ...... 7 2.2.2 Technology Adoption Phase ...... 8 2.2.3 Initial Phase of Adoption ...... 9 2.3 Scarcity in Digital Marketing ...... 11 2.3.1 Product Scarcity in Marketing ...... 11 2.3.2 Artificial Scarcity of Digital Resources ...... 12 2.3.3 Artificial Scarcity Through Invite-only...... 14 2.4 Virtual Social Networking Apps ...... 16 2.4.1 Social Networking Background ...... 16 2.4.2 Social Networking Mobile Applications ...... 17 2.4.3 Fear of Missing Out (FoMO) ...... 19 2.4.4 Closed Social Networks ...... 20 2.5 Connection of the Literature Topics ...... 22 3 Methodology ...... 24 3.1 Research Philosophy ...... 24 3.2 Research Approach ...... 25 3.3 Research Design ...... 26 3.4 Data Collection ...... 27 3.4.1 Sample Composition ...... 27 3.4.2 Interview Design ...... 29 3.5 Data Analysis ...... 31 3.5.1 Grounded Analysis ...... 31 3.5.2 Grounded Analysis Procedure ...... 32 3.6 Research Quality ...... 35 3.7 Ethical Implication...... 38 4 Empirical Findings and Analysis ...... 41 4.1 Artificial Scarcity ...... 44 4.1.1 Desire for the Invitation ...... 44 4.1.2 Limitation of Invitation ...... 46 4.2 Closed Networks ...... 49 4.2.1 Perceived Exclusivity ...... 49 4.2.2 Community Perception ...... 51 4.3 Social Influence ...... 53 4.3.1 Impact by Others ...... 53 4.3.2 Fear of Missing Out ...... 56 4.4 Contributing Factors ...... 57 4.4.1 App Purpose ...... 58

4.4.2 Sources of Attention ...... 58 4.4.3 Perception of Companies ...... 59 4.4.4 Covid-19 Pandemic ...... 59 4.5 Invite-Only Social Networking App Initial Adoption Framework ...... 60 5 Conclusion ...... 65 6 Discussion...... 66 6.1 Technology Acceptance ...... 67 6.2 Virtual Social Networking Apps ...... 68 6.3 Scarcity in Digital Marketing ...... 70 6.4 Practical Implications ...... 71 6.5 Social Implications ...... 72 6.6 Limitations ...... 74 7 Future Research Directions ...... 76 8 References ...... 78 9 Appendix ...... 87 9.1 Interview Guide ...... 87 9.2 Coding Overview ...... 91 9.3 GDPR Consent Form ...... 93

III

List of Tables

Table 1: Participant Overview ...... 29 Table 2: Excerpt of the Coding Process (full table in appendix 9.2)...... 34

List of Figures

Figure 1: Proposed Trial-to-Adoption Process...... 10 Figure 2: Illustration of the Research Gap (own elaboration)...... 23 Figure 3: Overview of the Emerging Categories (own elaboration)...... 35 Figure 4: Coding Tree (own elaboration) ...... 42 Figure 5: Invite-Only Social Networking App Initial Adoption Framework (own elaboration)...... 61 Figure 6: Illustration of the Research Gap (own elaboration)...... 66

List of Abbreviations

App = Application

FoMO = Fear of Missing Out

MGC = Marketer-generated content

SNS = Social Networking Sites

TAM = Technology Acceptance Model

UTAUT = Unified Theory of Technology Acceptance

VPSN = Virtual Private Social Network

Definitions

To give a brief overview, we will define the most important concepts, that will be repeatedly used throughout this study. The definitions will be discussed and derived in the literature review but are outlined here to create a consistent understanding for the reader.

Invite-only: Invite-only is stated as a strategy that aims at an increase of the desirability to access a certain product or service by restricting access to a limited group of people by requiring an invitation for access (Isaac, 2021).

Social Networking Apps: Social Networking Apps are one form of Social Media which are defined as applications that allow individuals to socially interact, consume, but also produce any user-generated content that is published (Conti, Hasani, & Crispo, 2013). Examples are Facebook, Instagram, or WhatsApp (Abril, 2007; Kemp, 2021).

Initial Adoption: The Initial Adoption defines the pre-stage before the actual adoption/rejection of new technology occurs. If the initial phase is evaluated positive, adoption occurs in the long run (Antil, 1988).

Artificial Scarcity: Artificial Scarcity is defined as the scarcity of digital goods that due to the digital occurrence needs to be artificially created by excluding others. Hence, it refers to technical designs within the software to limit or even restrict the core functions for the usage (Sullivan, 2016).

1 Introduction

______The purpose of this part is to introduce the reader to the social networking mobile application landscape and the particularities of the invite-only strategy. Furthermore, the purpose of this thesis is derived, and the research question that will guide this study is introduced.

1.1 Background

Smartphones and other portable devices have become part of everyday life of most people today. Worldwide, around 3.6 billion users, around half of the population, have already adopted smartphones (Gu, 2020). One regular activity of smartphone users is the usage of social networking mobile applications (apps) (Kemp, 2021). Social networks are a form of social media that focuses on connecting users (Kuss & Griffiths, 2017). Previously, social networking sites (SNS) were mostly used through web-browsers on computers or laptops, but with the rise of smartphones and other portable devices, nowadays the predominant use happens on apps. In fact, over 90% of users access previous SNS through mobile devices (Mohsin, 2021).

Some of the biggest companies in the world that operate social networking apps are Facebook, being the most dominant one, followed by WhatsApp, and Instagram (Kemp, 2021). Companies use social media as a digital tool to acquire potential customers but also to target advertisement placement (Saravanakumar & SuganthaLakshmi, 2012). The introduction of for example LinkedIn, Snapchat, or Tiktok added other social networking apps to the portfolio of the user. However, these are only a few compared to all the social networking apps trying to establish themselves on the market. Most new social networking apps are created by unknown smaller businesses, that do not have an established reputation (Arora et al., 2017). In Germany, it was found that on average users obtain six social media accounts. However, it is evaluated that users perform on different social media platforms for different purposes for example get informed about current events and news or simply sharing photos. While the average time spent using the internet shows 5 hours and 26 minutes each day, time spent on social media refers to 1 hour 24

minutes (Kemp, 2021), therefore, users eventually reach a limit to use all platforms simultaneously. In such instances, the predominant platforms such as Facebook, Instagram, and WhatsApp established high switching costs as users have already created a social network on these apps. This increases the barrier to make users switch to another social networking app (Kemp, 2021). Therefore, new app entrants need a convincing strategy to enter the social networking market to succeed. While for businesses a critical mass needs to be reached to make a social network run characterized by the network effect (Katz & Shapiro, 1994), users value people they can associate with (Sledgianowski & Kulviwat, 2009). Besides the low awareness of new social networking apps, the main reason for users to be hesitant about a new app is the high uncertainty about the quality and the fit of the app (Arora et al., 2017).

In January 2021, the second most downloaded app from the App Store in Germany was Clubhouse, an invite-only social networking app (Airnow, 2021). The invite-only strategy was not new but showed similar success as seen during the introduction of Facebook.com and Google Gmail (Macke, 2020). When Facebook launched in 2004 as one of the first social networks, it started in a closed setting where users could only join through an invitation, like Google Gmail. To illustrate, today’s examples for this kind of market entry are the dating app Raya with its launch in 2015 (Macke, 2020), Ello an ad-free social networking app with a launch in 2014 (Herbison, 2014; Newcomb, 2014), and Clubhouse with the launch in September 2020. For the German market, only Clubhouse is predominant. The download rate of Clubhouse has doubled from one million to over two million downloads within two weeks (Michaeli, 2021; Isaac, 2021). Even though access was limited by an invitation, Clubhouse entered the social networking app market with a tremendous growth rate which attracted even celebrities like Tesla CEO Elon Musk or Facebook CEO Mark Zuckerberg to participate (Gilbert, 2021; Bursztynsky, 2021).

1.2 Problem Statement

As established social networking apps are based on a varied and large user bases, the switching costs for users are quite high. This is the case because they already created their own social networks. Therefore, to counteract the mentioned high switching costs of the social networking app landscape, new ways of user attraction need to be found to enter the social networking app market. Especially since mobile apps refer to be digital goods designed to increase value depending on the user rate, called network effect. Therefore, a high user number increases the apps’ value, thus, the switching costs are high for users to change (Schwartz, 2017; Jetha et al., 2017).

Entering the social networking app market and sustaining a large user base is crucial as it offers high possibilities for marketers to obtain advertisement revenue and customer data insights. To illustrate, the advertisement revenue derived from social media within Germany was about 1.7 BN USD in 2020 (Statista, 2021). Further on, Facebook acquired a quarterly advertisement revenue of more than 7 BN USD within Q4 of 2020 in Europe (Facebook, 2021). The invite-only strategy has been proven to have a positive impact for companies like Facebook and Google, which entered the market using this strategy (Evans & Schmalensee, 2010; Tatlow, 2017). Facebook is still ranked the most used social network worldwide (Kemp, 2021; Mohsin, 2021). Thus, this strategy with invite- only access to a social networking app presents a method to attract potential users and can be referred to as the concept of product scarcity in marketing where the value of a product increases because of its limited availability (Lynn, 1991). However, with the digital app environment, scarcity gains another importance as the limitation is rather artificial due to the digital occurrence of resources.

To foster the problem statement, research has generally been limited concerning product scarcity in digital marketing (Shi et al., 2020; Schwartz, 2017) and virtual social networking apps (Choi & Lee, 2017). It was argued that it is important to understand the specific motivators of scarcity marketing techniques, which are mostly reducing supply that results in scarce goods (Shi et al., 2020). However, especially digital goods represent a challenge in terms of scarcity due to the nature of being intangible, non-rival, non- excludable, and recombinant resources (Schwartz, 2017; Jetha et al., 2017; Nylén, 2015). This results in an artificially created scarcity, defined as:

“(...) technical restrictions purposefully designed into software structures that hinder or otherwise degrade the core functionality of the software (...)” (Sullivan, 2016, p.72). In relevance of digital goods, one needs to be aware that they are designed differently and therefore have different effects on the consumer. Concerning social networking apps as one type of digital goods, the production of a limited quantity is not possible, so developers must find other measures to simulate a product scarcity in this case, or only for specific operating systems. In that case, following the invite-only can be one way to implement the product scarcity to foster new ways to counteract the predominant player of the social networking app market. Hence, it is defined as a strategy that aims at increasing the desirability to access a certain product or service by restricting access to a limited group of people (Isaac, 2021). However, to execute this strategy successfully, marketers need to understand the driving motivators to apply this strategy appropriately to be able to access the social networking landscape to acquire potential user data, and thus higher revenue chances. Especially, the initial phase for adoption is crucial since that is where the attitude is shaped towards adoption in the long run (Antil, 1988).

1.3 Research Purpose and Research Question

This study aims at generating an in-depth understanding of the motivators that foster the initial user adoption of social networking mobile apps based on the invite-only strategy. To investigate the motivators, it is crucial for this study to gain knowledge from the user perspective. In that case, we will contribute our derived knowledge to the theory of technology acceptance, scarcity in digital marketing, and virtual social networking apps. Furthermore, we deem to establish a framework to describe the motivators that influence the initial adoption of social networking apps using an invite-only strategy. To follow this purpose, we propose the following research question guiding our study:

RQ: Why do users initially adopt social networking mobile applications using an invite-only strategy?

1.4 Outline To give the reader guidance, we will briefly give an outline of the structure of our study. To begin with, the following Chapter 2, Literature Review, will highlight the theoretical background within the fields of technology acceptance with a focus on the initial phase of adoption. Followed by product scarcity in digital marketing and virtual social networking apps, emphasizing the peculiarities of closed social networks, we then incorporate these three fields to outline our research gap. We are going to close this gap through this study by investigating why users initially adopt social networking apps using an invite-only strategy. Further on, Chapter 3, Methodology, outlines the methodological framework this study follows while further pointing out the data collection and analysis procedure complemented by the quality and ethical research assurances. Followed by Chapter 4, Empirical Findings and Analysis, we present the influences why users initially adopt invite-only social networking apps based on our findings and also propose our established framework. By that means, we will also link our findings of the specific influences on the initial adoption by assessing the predominant motivators. After giving a short summary of the study within Chapter 5, Conclusion, we will further incorporate our derived knowledge into the existing theories within Chapter 6, Discussion, by highlighting how we contribute and challenge the existing theories, thus also stating our theoretical and practical implications, and also social ethical implications. Finally, our study will be concluded by Chapter 7, future research directions.

2 Literature Review

______The purpose of this chapter is to introduce the field of technology acceptance to understand the general motivations for users to adopt technology. Furthermore, the invite-only strategy as part of product scarcity marketing is discussed. Lastly, closed social networks will be reviewed to set the stage for the following research.

2.1 Literature Review Procedure To identify relevant literature for this study, various topics within the literature had to be considered and reviewed. Furthermore, if already existing, the connections between the topics were relevant for the conduction of our literature review. In the beginning, we identified that there is very limited literature on the specific concept of the invite-only strategy, which is why we mainly focused on the related topics of app adoption, product scarcity in marketing, including the artificial scarcity for digital goods, and closed social networks.

To start a systematic approach of the literature review, the databases of Web of Science, Primo, and Google Scholar were used to find peer-reviewed articles that are most relevant to our search and state of the art within our research topic. To identify scientific literature search terms including “Technology Acceptance”, “Mobile Application Adoption”, “Closed Social Networks”, “Commodity Theory”, “Digital Scarcity” and “Product Scarcity Marketing” were used, as well as combinations of these. This was an iterative process, as we started reading journals and identified further topics of interest or relevant search terms. Also, we looked for specific sources of relevant journals within articles if they brought scientific insights into the topic of interest and to identify articles that were considered most relevant by other scholars.

To avoid missing out on relevant concepts within the literature, we started a broad literature review. From there we narrowed down to map correlated fields that are relevant for our study and identify the scholars considered most relevant in the state-of-the-art literature. Furthermore, to assure a high quality of our study, we also checked the journals for their score in the Academic Journal Guide and made sure the majority of the included

journals were ranked 3-4*. In the Academic Journal Guide journals are rated from 1-4* with 4* being the highest ranking given to journals of distinction.

2.2 Technology Acceptance Companies are constantly under pressure to innovate to maintain a competitive advantage within the digital era, meaning creating something new is indispensable. Hence, the usage of information systems is essential to be built upon for such a digital innovation (Ciriello, Richter, & Schwabe, 2018; Nambisan et al., 2017). While some new products turn out to be successful, others do not (Antil, 1988). To get an understanding of why failures occur, one needs to obtain knowledge about the users’ attitude towards new products and adoption (Antil, 1988). Therefore, this chapter will outline the technology adoption with implications on the users’ motivations to initially adopt.

To begin with, we present the literature on technology adoption models that are predominantly used in mobile app adoption research. To serve the purpose of the invite- only app we then assess the individual phases of technology adoption. Lastly, we will discuss the impact of the initial adoption, which refers to technology acceptance, in more detail and set the frame for our research.

2.2.1 Technology Adoption Models

There is a variety of literature concerning mobile app adoption, as especially in the case of social networking apps the download and continuous usage of the app are the drivers of revenue stream. This form of adoption is depicted in technology adoption models that are currently predominantly used in mobile app adoption research. In the following paragraphs, we will discuss two of these models, namely the Technology Acceptance Model (TAM) and the Unified Theory of Acceptance and Use of Technology (UTAUT).

The traditional Technology Acceptance Model (TAM) by Davis (1989) stresses the technology-oriented theory with perceived usefulness and perceived ease of use as key determinants to influence the intention to use a technology. This influences the actual adoption of technology. However, focusing on only two key determinants for the technology acceptance only explains a limited range of contexts, situations, and

technologies (Bagozzi, 2007). Although the model is quite old, it is still widely used. Current researchers used the TAM model to investigate the significant antecedents of technology acceptance (Al-Emran et al., 2018; Rafique et al., 2020; Salloum et al., 2019).

The Unified Theory of Acceptance and Use of Technology (UTAUT) model by Venkatesh et al. (2003) defines determinants as social influence, facilitating conditions, performance, and effort expectancy. However, this model started to stress the impact of the usage of an IT system, more precisely the performance and ease of use during the interaction. This UTAUT model is also highly relevant for current research, as it is an essential model to investigate the technology adoption and the specific antecedents (Chao, 2019; Hoque & Sorwar, 2017; Al-Saedi et al., 2020).

While the just mentioned adoption models are essential to explain technology adoption, they lack the general contextual adaption. To clarify, while the TAM limits the key determinants for adoption by adjusting only two determinants, the UTAUT model stresses the actual system use. Overall, the models are focusing on the adoption impacted by the usage once the app was downloaded. The purpose of invite-only, however, is to bring potential adopters into the app and does not primarily impact the actual usage in terms of technology. Therefore, we will now discuss the different phases of adoption to evaluate where invite-only is situated in the process. However, it is important to be aware of the technology adoption models to detect differences and similarities affecting the user’s decision to adopt.

2.2.2 Technology Adoption Phase

In most cases, technology adoption is accompanied by a form of technological innovation that is presented to the potential users. In the following paragraphs, we will discuss the innovation adoption phases in more detail to generate an understanding of where the invite-only strategy is situated.

Innovation Adoption is widely discussed in the literature. Rogers (2003) who advocates the innovation-decision process cites innovation adoption as:

“full use of an innovation as the best course of action available” (Rogers, 2003, S. 177).

Hence, innovation is stated as a project, idea, or practice that is perceived as something new by the potential adopter, however, it is set equal to technology (Rogers, 2003).

While studying the technology adoption literature, it becomes apparent that it is discussed ambivalently (Antil, 1988; Rogers, 2003). To clarify, indeed, adoption/rejection is discussed at the final stage, however, to draw the line where adoption derives, some authors define adoption as the first purchase/trial (Rogers, 2003). However, others define this stage as trial whereas adoption results when the product evaluation turns out positive. In that case, adoption refers to behavioral and psychological commitment for continuous- /re-usage (Antil, 1988). To discuss, (Antil, 1988) argues that adoption setting equal to the first purchase or trial is critical as the consumer decision-making process can be misled, since not all users purchasing/using are directly adopting the new product. Therefore, Antil (1988) argues that adoption does not refer to the initial purchase or trial, rather it refers to a commitment over time that fosters a re-use/-purchase. In that case, the initial phase for adoption is the major phase where the evaluation for adoption is created or rejected to adopt/reject a new product (Antil, 1988).

2.2.3 Initial Phase of Adoption

As mentioned previously, the initial phase precedes the technology adoption before adoption occurs. To clarify, the five stages innovation-decision process by Rogers (2003) highlights the distinction of the initiation phase and implementation phase to aim for adoption or rejection (Ramdani & Kawalek, 2007; Lafreniere et al., 2011). Thus, the initiation phase stresses actions to shape the decision for adoption, while implementation refers to the usage. With that process Rogers (2003) points out where information searches and processing foster the motivation for the individual to reduce any uncertainty about the innovation while outweighing the advantages and disadvantages of the innovation. Facing the initiation, the pre-adoption steps are crucial since that is where the attitude is formed, and the decision is made. To clarify, (1) knowledge is the first process step where the awareness about the innovation is raised whereas information access is key to nurture the attitude towards adoption. Followed by the (2) persuasion stage, the cognitive attraction through the awareness becomes affectively shaped where individuals create a sensitive attitude whether it is favorable or not. While the awareness is more about the cognitive endorsement, the persuasion stage is more affectively encouraged,

thus, the individuals’ feelings and beliefs become essential. Subsequently, the (3) decision stage is where the individual decides whether to adopt or reject the innovation. A decision becomes more likely to be favorable if a trial is included as individuals first want to try it before adopting/rejecting it (Rogers, 2003). While Rogers (2003) implies behavioral commitment as adoption, Antil (1988) states that behavioral as well as psychological commitment will lead to adoption. Therefore, the product evaluation after the first purchase/trial is an essential step within the initial phase before adoption; more precisely the consequence of the product experience will be confirmed to prior expectations and shape the psychological commitment that will be either rejected or adopted within the confirmation step as illustrated in figure 1. The concept by Antil (1988) is still important today as it has been mentioned in recent research papers (Abayomi, et al., 2019; Pan & Tao, 2011).

To conclude, the initial phase before adoption is indispensable where the attitude towards technology is shaped. While Rogers (2003) and Antil (1988) both agree on the importance of the initiation within the adoption process, Antil (1988) incorporates two process steps, mainly consequences, and confirmation, since he argues that behavioral as well as psychological commitment leads to adoption. On the contrary, Rogers (2003) lacks the psychological view while just focusing on the behavior.

For this study, we will not build upon this process and distinguish the different phases. The framework is used to create a deeper understanding to identify the driving motivators that emerge within the initial phase of adoption introduced by Antil (1988) as seen in figure 1.

Figure 1: Proposed Trial-to-Adoption Process Note. Adapted from “New product or service adoption: When does it happen?”. J.H. Antil, 1988, The Journal of Consumer Marketing, 5(2), p.9 (https://doi.org/10.1108/eb008221).

2.3 Scarcity in Digital Marketing To encourage the initial adoption of digital technologies, and products in general, marketing strategies are used to persuade the user to adopt an app. In the case of mobile apps, these marketing strategies can be even more important as most new apps are created by unknown smaller businesses that have not established a reputation yet (Arora et al., 2017). Therefore, besides low awareness, potential users have high levels of uncertainty about the quality of the new app, making them more hesitant to adopt (Arora et al., 2017). Thus, companies utilize marketing strategies when launching new apps to create awareness and reduce customer uncertainty (Arora et al., 2017). The invite-only strategy is based on the concept of product scarcity, which is a commonly used practice in product marketing. Therefore, in the next chapter, product scarcity in marketing, and the underlying concept of commodity theory will be elaborated.

2.3.1 Product Scarcity in Marketing

The concept of using product scarcity in marketing is based on the Commodity Theory that was introduced by Brock in 1968. In commodity theory, the psychological effect of scarcity is evaluated. More precisely, the impact factor of scarcity on the value of a commodity is pointed out. In this context, a commodity is defined as something useful, like messages, objects, or experiences. Whereas value described the perceived utility or desirability created for the receiver. Essentially, the theory describes that any unavailable commodity will increase in value. (Brock & Brannon, 1992)

In 1991, Lynn introduced commodity theory into the field of marketing research (Lynn, 1991). Although product scarcity was already widely used in various terms like “limited to one per customer”, “this is the last one”, and “limited release”, Lynn (1991) used a quantitative review to bridge the gap between existing marketing literature and Brock’s Commodity Theory. First, Lynn (1991) identified that all marketable goods and services can be considered commodities as they meet the criteria to have utility to a person, are transferable, and can be possessed. Second, the concept of value is also transferable to marketing as marketers are mainly interested in increasing the desirability of their products and services, so the influence of scarcity on value creates a relevant goal for marketers (Lynn, 1991). Lastly, Lynn (1991) transferred the concept of unavailability to existing marketing practices including the production of limited editions, maximum order

sizes, or exclusive distribution outlets. The introduction to marketing is mainly based on the implication in Brock’s commodity theory that suggests that the possession of scarce commodities can be more desirable and convey a feeling of uniqueness or distinctiveness (Lynn, 1991). To analyze the applicability for marketing the author re-evaluated conducted quantitative studies concerning commodity theory and focused on economic commodities and the importance of value (Lynn, 1991). There was strong evidence suggesting that the marketers can “increase the perceived value of products, services, and promotions by manipulating the perceived scarcity of those products, services, and promotions” (Lynn, 1991, p. 52). Another correlation Lynn (1991) identified was that consumers with a greater need for uniqueness are more affected by scarcity tactics.

The literature on product scarcity in marketing has not been much further elaborated. Shi et al. (2020) identified that literature about product scarcity in marketing requires further attention to distinguish between the different types of scarcity and to transfer the knowledge into the digital world. One example they are using is the Single’s Day promotion introduced by online retailer Alibaba, which is considered a time-limited promotional scarcity, which indicates the relevancy of scarcity also for the digital marketing context (Shi, Li, & Chumnumpan, 2020). Additionally, Shi et al. (2020) require a specific understanding of the underlying motivations of consumers concerning different product scarcity methods.

2.3.2 Artificial Scarcity of Digital Resources

After outlining product scarcity in marketing, we will now distinguish the scarcity of digital goods. Generally, digital goods are defined as intangible and non-excludable meaning that the exclusion from consuming is impossible without any purposeful barrier (Rayna, 2008; Toledano, 2018; Schwartz, 2017). Further, digital goods are non-rival and recombinant. In other words, digital goods do not inhibit the consumption by others while facilitating recombination in several ways (Raya, 2008; Nylén, 2015).

Prior to the digital era, the analog world was dominated by physical goods that were being characterized by rival resources. With the transition to the digital world, the transformation of digital artifacts was fostered, thus, being defined as intangible, non- excludable, non-rivalrous, and recombinant by its nature (Toledano, 2018; Schwartz,

2017). Due to the limitless re-production, consuming digital goods is stated as neither declining the utilization nor inhibiting others during the usage. As an example, consuming music as a form of digital media does not inhibit the enjoyment of others as it is accessible for everyone simultaneously (Sullivan, 2016; Schwartz, 2017). Nevertheless, it raises concerns about intellectual property rights as the internet enables the unlimited reproduction of digital goods, such as digital distribution and storage (Toledano, 2018; Harper, 2009). In fact, through the rise of digital media, software became ubiquitous which is an essential intermediate between end-users and the content that enables users to access media content independently whether it is being run on a mobile phone, desktop computer, or another portable device. Due to the open architecture of the digital environment, access to information became simpler compared to the analog world (Sullivan, 2016). By that means, the reproduction costs for consumption are nearly zero due to the digital nature. However, the initial production costs remain for producing digital media content. In that case, scarcity as a form of barrier gains importance to justify the ease of re-production as the digital occurrence is highly replicable by nature (Schwartz, 2017).

Controversially, digital goods also represent a challenge in terms of scarcity. It is argued that digital goods are beyond non-rival resources. In other words, it is discussed that the circulation even increases value due to the so-called network effect. That means the value increases depending on the user rate whereas switching costs are created. Hence, the importance of open access is pointed out (Schwartz, 2017; Jetha et al., 2017). Nevertheless, fully open access concerns the intellectual property of the owner, thus restrictions are justified (O’Dwyer, 2020; Toledano, 2018). By that means, the creation of an artificial scarcity enables digital media distribution to a limited extent. To clarify, artificial scarcity is understood as:

“(...) technical restrictions purposefully designed into software structures that hinder or otherwise degrade the core functionality of the software (...)” (Sullivan, 2016, p.72).

In such instances, artificial scarcity can be established by either the government, software developers, or any other corporation (Sullivan, 2016). Implementing barriers to aim at scarcity can be achieved by restricting access through regulating the production, the establishment of a centralized control instance, or the facilitation of copyright which means juridically exclusion of others (O’Dwyer, 2020). Besides, applying subscription

models, or other payment walls support an artificially created scarcity (Sullivan, 2016). To clarify, the streaming platform Netflix utilizes a paid subscription model to permit the usage to ensure scarcity to protect any copyrights. However, also a freemium approach that aims at maximizing the user base is another method referred to as scarcity as users can limitedly use the app for free, however, essential functionalities are excluded. Thus, only after upgrading for example through any payment system, the full range of functionalities can be applied (Sullivan, 2016).

All in all, considering the ubiquitous digital era, artificial scarcity is an essential topic to overcome digital abundance by limiting access (Toledano, 2018). To justify the relevance, the above-mentioned literature discusses artificial digital scarcity from the perspective of the owner, meaning how to exclude others from consuming digital resources and protecting them. However, the literature lacks to conceptualize the meaning of digital scarcity from the marketing perspective. More precisely, the effects of artificial scarcity from a users’ perspective. Thus, we will elaborate on the digital marketing side based on the invite-only strategy.

2.3.3 Artificial Scarcity Through Invite-only

The literature on specific types of digital product scarcity marketing strategies is limited (Shi, Li, & Chumnumpan, 2020), as in the case of the invite-only strategy. To introduce the mechanics of the strategy and provide usage examples, grey literature in the form of websites and other blogs was used. The specific motivations triggered by the invite-only are the subject of this study, and therefore the gap in literature identified here is in line with the purpose we are trying to provide.

In the case of apps, the production of a limited quantity is not possible, so developers must find other measures to simulate a product scarcity in this case, or only for specific operating systems. Invite-only is stated as a strategy that aims at an increase in the desirability to access a certain product or service by restricting access to a limited group of people (Isaac, 2021). In that case, the entrance for usage is only possible through an exclusive invitation, strengthening the aspiration to access the app (Kraaijenbrink, 2019). The invitation strategy is utilized by inviting others to join their social network or specific groups, yet the invitation is anchored as a part of the product (Pabarcus, 2011). This

strategy is not new and has been used by even one of the first social networks, Facebook. While being launched in 2004 as Facbeook.com, it targeted the Harvard College students to serve as a virtual space to meet and communicate. In 2006, Facebook opened its social networking beyond the Harvard-only membership to the public which exponentially grew up to 110 million users within approximately two years (Evans & Schmalensee, 2010). Also, Gmail which is publicly open today used to be guided by the invite-only entry strategy. In 2004, Google launched its e-mail service Gmail which could only be accessed by an invitation (Tatlow, 2017). However, there are also concerns associated with the perception of invite-only apps. By that means, utilizing the invite-only strategy by fully restricting access to others without an invitation can be counterproductive. In that case, it can be risky to strive for the invite-only strategy as everyone who wants to join should be able to join rather than being excluded (Kraaijenbrink, 2019).

As at that time, the examples of Facebook and Gmail were mainly used as desktop versions, we will now have a more precise look at the mobile app context. We created knowledge about the adoption of mobile apps using the invite-only approach by pointing out three different mobile apps within the social networking context.

Firstly, the mobile dating app called Raya which was launched in 2015 and focuses on the exclusivity of its members stresses the acquisition of like-minded people who can join through an exclusive invitation (Macke, 2020). Secondly, Ello the ad-free social networking app with a launch in 2014 (Herbison, 2014; Newcomb, 2014). Thirdly, Clubhouse the social networking app accelerated with the invite-only network a major growth within four months since September 2020, this one was the predominant invite- only app for the German market. Clubhouse represents the latest social networking app that uses the invite-only strategy. The download rate has shortly doubled from one million to over two million downloads within two weeks after Elon Musk has held his talk on the app in February 2021 (Michaeli, 2021; Isaac, 2021). Besides, within the app, different “rooms” are represented where like-minded people gather to talk about different topics that are being hosted by an expert within this field (O'Connor, 2021). However, to join Clubhouse, an exclusive invitation from an existing member is necessary. As Clubhouse offers the opportunity to engage with celebrities such as singer Drake, Facebook CEO Mark Zuckerberg, or Tesla CEO Elon Musk who executed a talk, the exclusivity for

entering increases which in parallel gives also certain security for such “high-profiles” to attend as only limited people can join (Gilbert, 2021; Bursztynsky, 2021).

To conclude, the invite-only strategy is a possibility to apply the digital product scarcity to the app landscape and has been used especially in the introduction phase of social networking platforms as in the case of Facebook or Gmail. Although the invite-only strategy has been used by several SNS, there is very limited literature. Therefore, we had to include also grey literature in this part but see this as an opportunity to contribute to this field. To elaborate the connection with social networks in more detail, we will elaborate the peculiarities of social networking apps in the next chapters.

2.4 Virtual Social Networking Apps In this chapter, we will first look at social networks in general and the impact social networking apps currently have. Then, we will elaborate the underlying assumption of fear of missing out as motivation for users to join and associate with social networks. Lastly, the literature on closed social networks is reviewed to describe the type of social networking app that is created by using the invite-only strategy.

2.4.1 Social Networking Background

To get an understanding of how to classify social networking mobile apps, we will first briefly outline the significance of virtual communities while focusing on the social space and narrowing it down to mobile applications.

Generally, virtual communities are anchored within the digital environment. They represent different types such as personal interests, a demographic and geographic type of virtual community, or as business-to-business. The key element of virtual communities is communication which includes user attention and building a relationship. From a business perspective this is beneficial for product placement and receiving product improvement ideas from users. (Hagel, 1999)

To adopt virtual communities towards the social space is rooted within social media where users can virtually engage within a social surrounding to create content but also to network with each other (Hossain et al., 2020). Therefore, businesses can engage to

increase the popularity and trust by letting users interact and communicate with each other which strengthens the reliability and value of the products. The communication and engagement of social communities become essential from the business context to interact with the audience (Hossain et al., 2020; Bailey et al., 2021).

One of the first approaches to a social networking site was SixDegrees.com with a launch in 1996 (Press, 2018). The website was open for everyone to join; thus, it gained a growth rate of three million users within three years. However, since the content was not serving the users’ expectations and features were limited, the participation declined and the network shut down in 2000 (Evans & Schmalensee, 2010). In 2003, MySpace.com was launched as another social networking site which was overtaken by the launch of Facebook.com which shortly became the most used network (Press, 2018).

Social Networks benefit from the network effect, meaning that their value increases the more people participate (Katz & Shapiro, 1994). Therefore, the more people engage within a social network, the more interesting it gets for the public. Thus, the number of users is indispensable to gain exponential growth and to make the network run from a business perspective (Katz & Shapiro, 1994). To adopt social networking sites, it has been investigated that besides the perceived playfulness also the perceived critical mass is a major driver (Sledgianowski & Kulviwat, 2009). Hence, the critical mass from a user perspective is perceived when a certain number of users participate one can associate with, e.g. based on common interests or friendship (Sledgianowski & Kulviwat, 2009).

2.4.2 Social Networking Mobile Applications

In the year 2020, over 50% of the global population possessed a smartphone (Rotar, 2020). Hence, one purpose of using a smartphone is participating in social media, more precisely social networks. To illustrate, the social media user rate was identified as 4.2 billion in January 2021 users which shows an increase of 13% compared to the previous year. To put this into relation to the world’s total population which was evaluated as about 7.83 billion at the beginning of 2021, the social media user rate makes approximately 53% of the total population. Narrowing it down, 1.3 million users joined social media every day during 2020. Compared to previous years, we can see a major growth rate of social media users as the user rate has doubled compared to 2016. Besides, users spend

about 1 hour 24 minutes on social networking sites such as Facebook, Twitter, or WhatsApp. Further, the reasons for using social media were mainly to stay up-to-date regarding events or news, but also to experience entertaining content or to keep up with friends and stay in touch with them. (Kemp, 2021)

Thus, we identified social media as a crucial platform where users meet and engage with each other which has tremendously increased throughout the last year, yet the mobile application is an essential medium for the execution. However, since social media is a medium for broadcasting information that includes various forms such as social networks, blogs, media-sharing, forums, etc., we identified that social media integrates even more than just the connection among the users that refers to social networks (Saravanakumar & Sugantha Lakshmi, 2012; Conti et al., 2013). Therefore, we narrow it down to focus on social networking among each other. More precisely, social networks are a form of social media that is particularly focusing on connecting the users (Kuss & Griffiths, 2017). Conti et al. (2013) define social networking sites as:

“(…) Internet-based applications that allow for user-generated content to be published and accessed easily by a global audience.” (p.2).

Social networking apps are the most common and fast-growing within social media (Conti et al., 2013), examples are Facebook, Instagram, or WhatsApp (Abril, 2007; Kemp, 2021). To connect in such a network, an invitation needs to be sent out to others to add them into the own personal network which is the key driver to enhance the social network (Abril, 2007; Trusov et al., 2009).

With the introduction of social networking apps also new forms of social awareness were created. Nowadays, all online and offline activities of social contacts can be monitored with ease (Przybylski et al., 2013). This creates the crucial motivation for users to engage in social networking apps based on the fear of missing out (FoMO). This concept will therefore be discussed in the following chapter.

2.4.3 Fear of Missing Out (FoMO)

In this chapter, FoMO is discussed as a motivator for users to engage in social networking apps. To understand FoMO, the concept of social contagion in the context of social networking apps is essential to understand. This is the case because FoMO is mainly created by the perception of society and the fear of missing out on belonging to a social group. Both will be introduced in the following paragraphs.

Social networking apps are generally impacted by the consumption of others. This is explained by the concept of social contagion (Langley et al., 2012). In this concept the impact of others on an individual’s consumption is elaborated (Langley et al., 2012). This is especially influential in the case of social networks, as the consumption by others in form of user-generated content is mainly why users are adopting a social networking app. Furthermore, the feeling of belonging to a social group, as is the case for social networking apps, is essential for individuals (Abrams & Hogg, 2006). The social identity a person has in a group is quite different from the individual personal identity of a person (Abrams & Hogg, 2006). Social identity is, however, an enhancing factor on self-esteem (Abrams & Hogg, 2006). People use social group belongings to decrease their uncertainty on how they should behave by accepting the norms of the groups (Abrams & Hogg, 2006). This level of identification with the group makes the individual want to be involved in the social groups (Abrams & Hogg, 2006). Furthermore, group members are likely to feel more secure with others perceived to be in the same group (Hogg et al., 2004).

In the digital age, with the increasing importance of SNS, the social association is broadened from just the immediate circle of contact. Additionally, SNS made it easier to know about all online and offline activities one is missing out on (Przybylski et al., 2013). Therefore, people increasingly have FoMO. FoMO is already being used as a commercial tactic, especially to increase product and service sales (Hodkinson, 2019). Although it is a common practice in advertisement there is limited literature attention which creates a lack of understanding of the precise effects on the customers (Hodkinson, 2019; Przybylski et al., 2013). Przylbylski et al. (2013) define FoMO as:

“a pervasive apprehension that others might be having rewarding experiences from which one is absent, FoMO is characterized by the desire to stay continually connected with what others are doing.” (p.1841).

The interest in FOMO developed simultaneously with the rise of mobile phones and social media and is often connected to the overuse of interconnectivity due to the extensive use of smartphones (Hodkinson, 2019). One important contribution in literature was the robust difference measure derived by Przylbylski et al. (2013) that made the levels of FoMO more accessible and understandable. Therefore, the main items reflecting FoMO were identified and clustered to receive a more in-depth insight on the motivators created by FoMO (Przybylski et al., 2013). The study found that the main factors impacting FoMO are the perception (fears, anxieties, worries) associated with missing out on conversations, experiences, and events of their social environment (Przybylski et al., 2013).

To conclude, FoMO and generally the social impact described in social contagion theory can have an impact on the willingness of users to adopt social networking apps. This has not been discussed in the literature for the specific case of closed social networks that the invite-only strategy is creating. To understand the peculiarities of closed social networks and the relation to the invite-only strategy more in-depth the topic will be discussed in the next chapter.

2.4.4 Closed Social Networks

To understand the impact of the invite-only strategy on the social networking app, we will now continue the literature review with closed social networks. The term closed social networks is not uniformly defined in literature with authors using it for different purposes. In the following paragraphs, we will evaluate the different levels of closedness, and the impact it has on the perception of the user.

One level of closed social networks is the private profiles and conversations users can have on existing social networking sites such as Facebook (Carpenter et al., 2018). This entails for example private messages between two individual members of a social networking site in contrast to sharing content as a status update for all users (Carpenter et al., 2018). Additionally, to some extent, private profiles that only display information like age or location to direct followers are sometimes also considered closed (Zheleva & Getoor, 2009). There are two factors connected to this type of closed communication between individual members of a social network. First, users feel some sort of special value if messages are shared exclusively with them or before others (Carpenter et al.,

2018). Additionally, exclusive messages also increase the perception of connection with the other user (Carpenter et al., 2018).

The second level is closed social networks in the sense of smaller groups that share content as a community. These types of closed social networks can be accessed by invitation or other forms like membership applications. The lower user numbers of closed SNS increase the perceived connection between users. They are argued to be an important alternative to open SNS in the future as privacy concerns are increasing. Although marketers can address fewer users on closed SNS Choi & Lee (2017) identified that marketer-generated content (MGC) receives a higher level of trust on closed SNS. This is mainly driven by the perception that these marketers also need to be invited to join the group, increasing their credibility. (Choi & Lee, 2017)

Lastly, Virtual Private Social Networks (VPSNs) are another form of closed SNS with the highest degree of closedness. In this type of network, the architecture of the existing SNS is used but no information is shared with the provider. Additionally, no minimum of personal information, e.g. name or profile picture, is shared with the whole community but privacy settings allow only specific users to view personal content. The main motivation to use VSPNs are privacy concerns, mainly that users do not want their information to be used or distributed by the provider of the SNS or accessed by any user of the network. (Conti et al., 2013)

One interesting distinction is that closed social networks are perceived to have a higher group identification as in all cases the relationship through the selective membership increases the sense of privacy and trust described by the authors. Invite-only apps are part of the second-level closed social networks where a limited number of users interact in a social group that has some access criteria. This type of closed social network has been used successfully by several SNS, like Clubhouse, Google Gmail, or Facebook. In the case of this study, we will only evaluate the access option of invite-only by investigating the motivators to initially adopt social networking apps.

2.5 Connection of the Literature Topics To conclude our literature review, we identified a literature gap by connecting the three fields of technology acceptance, scarcity in digital marketing, and virtual social networking apps literature. Understanding these three theoretical fields is important to derive the justification of our research gap. This gap is investigated as to why users initially adopt social networking mobile applications using an invite-only strategy, which can be found at the center of figure 2 below.

To get a holistic understanding of our research gap, we firstly focused on the initial adoption of an app, considering the technology acceptance literature that refers to the first field of literature found at the upper left of figure 2. More precisely, we identified the initial phase of adoption to be crucial since it is put as an antecedent of actual adoption. In other words, it is the essential stage to define whether users remain using the app, thus adopting it or not (Antil, 1988; Rogers, 2003). The invite-only strategy is mainly affecting this initial stage of adoption because it enables users to enter the social networking app. One field that has been researched is the general adoption of technology, of which models have often been adopted to research the adoption of mobile applications (Davis, 1989; Venkatesh et al., 2003). However, these models are largely focusing on the continuance intention to use apps and not the initial attraction that is created by a strategy like invitation-only while lacking the holistic view on the initial phase.

Secondly, the invite-only strategy was identified to be a form of product scarcity marketing. This field of product scarcity in marketing was studied to create a more profound understanding. Further, the impact of digital goods, creating artificial scarcity was elaborated. All these connecting fields are illustrated at the upper right of figure 2. The concept of increasing value for an unavailable product applies to marketing in general according to Lynn (1991). Although the impact of digital goods is discussed, there is no transition made explicitly for apps. Furthermore, there is a gap identified in the current literature to generate a better understanding of the specific approaches of digital product scarcity marketing (Shi et al., 2020). The literature of artificial scarcity is currently focusing on the owner’s rights perspective (Toledano, 2018; Sullivan, 2016), not the user perspective. The insights why users initially adopt products using these approaches will also generate more insights into how to use them more effectively and especially how this strategy can be used as a digital marketing tool.

Thirdly, by using the invite-only strategy, a closed social network is created and due to the importance of the social contagion concept, we are looking for a general understanding of this connection referring to the field of virtual social networking apps found at the bottom of figure 2. Therefore, closed social networks (Choi & Lee, 2017), and the feeling of belonging referring to the social contagion theory (Langley et al., 2012) but also the fear of missing out (Przybylski et al., 2013) are a relevant case for the invite- only strategy. Furthermore, there is diverse literature on the various forms of closed social networks that exists, but it is largely focusing on the interaction and participation within these networks and not the initial attraction associated with them that needs to be distinguished by the invite-only strategy (Choi & Lee, 2017).

Figure 2: Illustration of the Research Gap (own elaboration).

3 Methodology

______The purpose of this chapter is to provide the philosophical assumption for this study to assess the nature of reality and how knowledge is developed to highlight the role of our research. Further, it represents the methods and techniques of how data is being collected and analyzed.

3.1 Research Philosophy The philosophical assumption for this study is important to distinguish since it defines how the nature of reality is being created (ontology) and how knowledge is developed to inquire into the nature of reality (epistemology) (Easterby-Smith et al., 2018). To follow the suitable research philosophy for our study, we need to be in line with the way we assess the research and give meaning to it (Easterby-Smith et al., 2018). Therefore, it is essential to choose a suitable philosophical approach, mainly ontology and epistemology which will be elaborated in the following (Saunders et al., 2016).

In the first place, we need to define ontology to face the nature of reality. Since the aim of this study is to investigate why users initially adopt invite-only social networking mobile applications to understand the relevance of the field of scarcity within digital marketing our chosen ontology is Relativism. To clarify, with the nature of reality defined to be the relativism approach, multiple truths exist while it depends on different observations being made by the individuals (Easterby-Smith et al., 2018). Therefore, we want to evaluate different opinions by the individuals to gain heterogeneity to get deep insights into different perspectives. Hence, we believe different truths exist depending on how the individuals experience the initial adoption of invite-only social networking mobile apps, thus including the driver to initially adopt it. Yet, we are convinced that individuals experience the initial adoption differently while representing diverse key drivers and motivation. In that case, we want to acquire different standpoints, which makes the relativist ontology the most suitable approach (Saunders et al., 2016). On the contrary, we discard the Realism and Internal Realism as there does not just exist one reality. Besides, meanings and experiences are significant to access the nature of reality rather than approaching a theory-testing where numbers are predominant (Easterby-Smith et al., 2018; Saunders et al., 2016).

In the second place, we need to face the nature of knowledge creation (epistemology), which we defined as Social Constructionism. This is in line with our chosen ontology of Relativism. To justify, the human interaction rather than objectivity becomes essential to follow our purpose of this study. The users perceive the initial adoption of invite-only social networking apps differently. To foster the individual experiences and let users express their differing opinions on invite-only social networking apps, social constructionism is the most appropriate epistemology to serve our purpose. The epistemology assumption is important as it leads the research on how to obtain the knowledge to face the reality and how to make sense of the collected data (Easterby- Smith et al., 2018). Therefore, our focus is mainly on words whereas different interpretations and perspectives were evaluated to obtain the corresponding nature of reality. Thus, we decided to take an explorative interpretation of different observations.

3.2 Research Approach Following our research philosophy, we are now discussing the research approach to define the way and method the study is conducted. We need to distinguish the following three approaches: deductive, abductive, and inductive (Easterby-Smith et al., 2018; Saunders et al., 2016).

Since our research purpose relies upon different observations whereas words are predominant to give meaning, we rejected a deductive approach as we are not testing any theory nor assessing one reality rather several realities depending on the observer. Although we identified the UTAUT and TAM model as predominant within the technology adoption literature, we assessed that these models lack specific motivators in terms of the invite-only strategy. Besides, the focus on the initial phase for adoption is crucial for this study which these models do not evaluate holistically. Therefore, we decided against the deductive approach for this study.

Facing the abduction which is between the deduction and induction that refers to going back and forth between the theory and data starts with the “surprising facts” derived from the data analysis (Saunders et al., 2016). We concluded that abduction would not be a suitable approach because no obtained theory is facing the context of social networking apps within the closed setting as mentioned within our literature review. Therefore, we

did not want to be limited on existing theories that are not anchored within our contextual approach, thus, would not answer our research question in-depth.

In consequence, we decided to explore our research purpose to identify emerging patterns to establish a grounded theory. Hence, we decided to take upon an inductive research approach which is anchored as qualitative research to define new patterns and establish new insights and knowledge into the socially constructed reality. This is being created by the individual views of the research participants and the researcher (Easterby-Smith et al., 2018). As presented in the literature review, this study combines different fields of research that have not been connected before. Therefore, there is no established framework concerning this research gap leading us to start an inductive approach to generate knowledge on this topic. One example is Hui et al. (2018) who used a qualitative and inductive research design to evaluate why specifically users are, or are not, adopting a health-supporting app.

3.3 Research Design As we are following the qualitative research, we identified the need to investigate deeper about our research purpose because literature is scarce. Therefore, we identified a high demand to foster primary data based in an exploratory manner. With the aim of a grounded theory, we want to understand the socially constructed reality to answer our research purpose in-depth. While grounded theory occurs in a different version, such as the Classic, Straussian, or Constructivist Grounded Theory (Kenny & Fourie, 2015), we assessed the Constructivist Grounded Theory approach as the most suitable one. While all versions have the same goal of identifying a theory grounded in data, they differ in diverse aspects. To highlight, the major differentiation we identified while rejecting both other approaches, was the philosophical approach and the prerequisite theory. To justify, the Classic approach by Glaser & Strauss requires to fully ignore prior literature while the Straussian version of grounded theory opposes prior knowledge gained from the literature but facing it with skepticism (Mills et al., 2006). However, both versions of grounded theory support a more positivist view. Therefore, as we fostered a constructivist paradigm where reality depends on a different perspective to follow the manifold social realities is aligned with Charmaz's (2014) view. She argues that the researcher is within the research process rather than being separately, thus gaining experience of all data rather

than just data fragments (Easterby-Smith et al., 2018). In that case, bias was not created by prior knowledge through the literature review. The prior literature review helped to generate knowledge about the study’s research purpose to aim for grounded theory.

Aligned with the approach by Charmaz (2008) of the constructionist grounded theory, we conducted semi-structured interviews to discover meanings of the individual’s experiences, therefore quality is predominant to quantity to give in-depth meanings to the individual's experience (Kenny & Fourie, 2015). Besides, it is argued that the interview execution needs to be more open-ended and rather conversational whereas fewer interviewees enable rigor and intensive interview. Therefore, the interviewee rate is rather low compared to quantitative and statistical research approaches (Alemu et al., 2017; Saunders et al., 2016).

3.4 Data Collection In the following chapter, the collection process of the data for this study is explained. More precisely, in the following, we will focus on the sample composition and the design of the interview.

3.4.1 Sample Composition

To serve the purpose of the study, we followed a purposive sampling which refers to a non-probability sampling. Hence, predetermined criteria define the choice of the sample composition (Easterby-Smith et al., 2018). This specific sampling enables us to define the samples that fit best to investigate our research purpose. Samples that did not suit our research purpose were rejected. To give an example, we rejected non-social networking app users since we want to investigate the initial adoption and these users have not gone through the process of initial adoption. Consequently, non-users could not serve the research purpose. Therefore, the prerequisite criteria which needed to be fulfilled for this study were first users of social networking apps in general. In the beginning, we also included social networking app users that did not yet adopt invite-only social networking apps to get a holistic view if the effect on them differs and if we are missing relevant insight that could contribute to the study. After interviewing three users who had not previously initially adopted an invite-only social networking app we did not see any major benefits to generate insights according to our research question, which is why we then

focused only on invite-only social networking app initial adopters. The most recent invite- only social networking app in Germany is the app Clubhouse, which was previously introduced. The participants which were initial invite-only social networking adopters all used this app. However, they also transferred insights from previous invite-only social networking apps like Facebook or SchuelerVZ. The SNS SchuelerVZ was intended to connect students, primarily focusing on the German market. As they stated that their motivation is similar, and they also were able to transfer the invite-only strategy to other social networking apps in general we decided against limiting this study to the scope of Clubhouse. Besides, our selection was also predefined users based in Germany due to the high familiarity of the researcher with the country. Additionally, to ensure a higher comparability Germany was selected, as the social networking landscape differs between most countries. Further on, we want to acquire in-depth impacts about different perspectives, opinions, and attitudes whereas the convenience in talking in the mother tongue reduced any obstacle to talk open and freely by the users. Another prerequisite criterion was a diversified age range. Thus, we determined users between the age of 18 and 34 as this occurred to be the largest demographics using social networking apps (Karasek & Hysa, 2020). Besides, to ensure a higher diversity that would give us deeper insights was an equal gender distribution, therefore both males and females were selected. No other genders were excluded, however, using snowball- and convenience sampling led our derived sample sizes to consist of females and males only. Moreover, different occupations were focused when choosing the sample to gain even more insights since different backgrounds support different points of view.

As we started with a purposive sampling with the above-mentioned criteria, we reached out to the potential users based on the convenience sampling which is part of the non- probability sampling. This form of non-probability enables a convenient approach to contact and acquire, thus we decided to acquire users from our circle of acquaintances based on the above-mentioned criteria (Easterby-Smith et al., 2018). After we started to select users who were using any social networking apps, we found out that some never interacted with an invite-only social networking app. Once we interviewed one suitable candidate, we followed in parallel convenience and snowball sampling. While still acquiring potential users within our circle of acquaintance, we also fostered the snowball technique and asked the participants if they knew suitable interviewees of their network that would fulfill our prerequisite criteria. In general, the snowball sampling strategy

entails asking suitable participants for further recommendations, thus enabling us a mixed approach of the sampling strategy (Easterby-Smith et al., 2018). We did not specify the number of participants beforehand, because we aimed at data saturation which we, to the best of our knowledge, achieved after our 13th interview. However, to ensure that we did not miss out on any important information we executed a 14th interview which emphasized that data saturation was achieved as no new knowledge was generated. Further, below in table 1, an overview of our sample composition can be found. The interviews were conducted between March 29th and April 24th, resulting in a total interview time of almost 13 hours.

Number Gender Age Occupation Invite-only SN App used Interview Time 1 Female 17 High School Student no 55 min 2 Female 29 Business Economist no 64 min 3 Male 31 Head of Security Operation Center no 52 min 4 Male 28 Employee within the Public Sector yes 57 min 5 Female 26 Business Student yes 59 min 6 Male 23 Architerctural Student + Working Student yes 50 min 7 Male 32 CEO yes 50 min 8 Male 25 Junior Product Manager yes 55 min 9 Female 29 Change Communication Expert yes 63 min 10 Female 25 Consultant yes 50 min 11 Female 25 Early Stage Startup Consultant yes 64 min 12 Male 28 Project Manager yes 49 min 13 Female 26 Psychology Student yes 66 min 14 Female 25 IT Consultant yes 39 min 776 min Total Time: 13 hours

Table 1: Participant Overview

3.4.2 Interview Design

As previously discussed, to follow an exploratory research approach we decided on gathering primary data. Primary data is newly collected data, specifically for the research (Easterby-Smith et al., 2018). In line with our research methodology, we conducted semi- structured interviews. The purpose of using a semi-structured interview is to have guiding questions, but simultaneously leaving the interview open for new directions and topics (Easterby-Smith et al., 2018).

Therefore, we constructed a semi-structured interview guide. As suggested by Charmaz, (2006) we focused on designing open-ended questions that permit the interviewees to share all their opinions. In accordance with Charmaz (2006), we informed ourselves of

possible motivators through the literature review but left the interviews open for new topics (Charmaz, 2006). This will ensure that no obvious points will be missed by asking too detailed questions of what we as interviewers think influences the interviewee (Charmaz, 2006). Furthermore, topics were adjusted as the interviews proceeded (Easterby-Smith et al., 2018). To follow up the general topics opened by the interviewees, the interview guide also contains intermediate questions to generate more in-depth knowledge on the topics addressed. Finally, the questionnaire ends with ending questions to conclude the interview. Both intermediate and ending questions are also suggested by Charmaz (2006) to generate in-depth knowledge on a topic by simultaneously allowing the interviewee to address the topics of their concern. The interview guide can be found in appendix 9.1. The purpose of the interview guide is to encourage the interviewees to talk about their motivators to initially adopt invite-only social networking apps. Initially, we also asked them about their social networking usage motivations in general to identify specifications for the invite-only social networking apps. Then, the interview was guided towards the initial phase of adopting invite-only apps and all impacts the interviewee experienced during that time. We included several potential impacts, like the interviewee’s social environment and specifications concerning the invitation and discussed those in more detail if they were mentioned by the interviewee to ensure an open approach of the interview. Lastly, we used the closing questions of the interview guide to summarize the perception of the interviewee regarding the invite-only strategy and guide the interview towards an end.

Although interview guidelines are usually adjusted after generating some insights, we ensured that the key topics stayed overall the same to ensure comparability (Easterby- Smith et al., 2018). To ensure this, we conducted two pre-test interviews and one focus group with six participants to ensure a broad knowledge base before conducting the first interview. Further information on the pre-tests will be explained in chapter 3.6, Research Quality.

3.5 Data Analysis In this chapter, the method of grounded analysis is introduced that is used to analyze the gathered data. Additionally, the grounded analysis procedure is described to explain how the coding of the data was conducted.

3.5.1 Grounded Analysis

The data analysis is closely linked to the data collection approach and the general philosophy of the study. In this study, we are following a relativistic, social constructivist research philosophy and identified the grounded theory by Charmaz (2006) to be best suited. To follow the research approach of grounded theory, our data analysis method referred to the grounded analysis.

This study aims at generating in-depth knowledge about the personal motivators for the initial adoption of invite-only social networking apps. More precisely, we identified a gap that needs to be answered by taking into consideration various perspectives from users. To study the various motivations and personal experiences of the participants it is important to analyze the interviews in context. A grounded analysis is a suitable combination as it allows an open exploration of the data while staying close to the text in creating codes (Easterby-Smith et al., 2018).

The constructivist grounded analysis consists of initial or open coding, followed by refocused coding which then constructs a grounded theory (Charmaz, 2008). Charmaz resists the rule-bound approach of analysis and enhances the impact of the researcher on the derived theory (Charmaz, 2008). This form of grounded analysis has a focus on specific generic grounded analysis techniques like memo writing, constant comparison, and data saturation (Charmaz, 2008). The more open approach by Charmaz was mainly criticized for the impact the researcher has on the construction of the theory (Glaser, 2007). Glaser (2007) rejects the complete underlying assumption of constructivism in grounded theory. He argues that this approach is not a faithful representation of the participant’s experiences (Glaser, 2007). Moreover, Glaser (2007) sees abstraction as a principal of grounded analysis which he perceives to be neglected due to the moderation function of the researcher.

However, for the data analysis of this study, the constructivist grounded analysis of Charmaz (2008) is the most appropriate form. To justify, it follows the methodological

frame of this study. Furthermore, the data collection in form of open questions during the in-depth interviews is in line with the more flexible coding approach that enables new discoveries (Charmaz, 2006). Lastly, the constructivist grounded theory approach of Charmaz (2006) allows a literature review before the research. The researchers ares an active part in the construction of the theory leveraging the previous knowledge of the literature review.

Consequently, we identified that the grounded analysis technique bears certain risks. On the one side, the researcher needs to evaluate a big chunk of data that not only takes time but also certain skills to ensure the most valuable data is evaluated. On the other side, it highly relies on the subjective interpretations of the researcher to comprehend the gathered data properly. (Easterby-Smith et al., 2018). Nevertheless, we chose this technique as it gave us the possibility to acquire in-depth insights about the individual experiences and motivations to initially adopt social networking apps. Generally, the coding process according to Charmaz (2008) enabled us to stick as close to data as possible while not losing track of the big data chunk. Besides, to reduce any subjective bias of this analysis process, we used the memo-writing function to discuss and reflect on the emerging codes and patterns according to Charmaz (2008). The following will point out how the coding process was executed.

3.5.2 Grounded Analysis Procedure

To highlight the way we collected and analyzed our data, we followed the seven steps of Familiarization, Reflection, Open Coding, Conceptualization, Focused Re-Coding, Linking, and Re-Evaluation that will be discussed in the following (Easterby-Smith et al., 2018).

In the first step, after gathering the data, we got familiar with the raw data we obtained. Thus, data from the interview transcripts which was performed with a transcription software called Trint, but also recordings, and notes taken were considered. In the next step, we dug into the data more closely by highlighting crucial information whereas specific quotes were evaluated. We executed this step with a data analysis software called Atlas.ti which enabled both of us researchers to work hand-in-hand, not only to avoid bias but also to work together efficiently as we could screen the documents in parallel, thus

no information went missing. We went back and forth within the transcripts, but also our written notes to make sure we do not miss out on any essential information while simultaneously taking memos to ensure all information is maintained. This led to the open-coding step, where we started to align the quotes to open codes. These codes were mainly descriptive while ensuring that we are as close to the data as possible. However, the codes were kept to a short phrase to emphasize the raw data with simple words. As Charmaz emphasizes to align the huge chunk of data in a systematic way to maintain a good overview (Charmaz, 2008). Followed by the open coding, we conceptualized specific patterns such as similarities, but also frequencies and differences among the codes to create the belonging categories. Charmaz (2008) underlines the essence of writing memos to support the emergence of the categories that need to be as close as possible to the gathered data. Further, we executed the re-coding. This step was crucial to limit and focus the open codes to a limited amount to strive for an in-depth understanding. It is deemed to be highly iterative, thus we went back and forth between the codes and data to acquire re-codes as specific as possible to the raw data. Therefore, we established beside the categories even sub-categories to ensure that we refer to the raw data in the closest way. As an example, we found several codes connected to the initial reaction to the invitation, like “euphoria for invitation”, “happiness for invitation”, or “positive reaction to invitation”. As these are similar and concern the same topic of excitement for the invitation, we re-coded them into one category together with additional other pre-codes.

To explain the grounded analysis procedure, we started with 76 initial open codes and ended up having 19 re-codes. To give insights, how we developed the re-codes, sub- categories, and finally, categories, the screenshot below shows an excerpt of the excel file of how we performed the linkage to find similarities that refer to our categories. However, the full data of this excel file can be found in appendix 9.2.

Table 2: Excerpt of the Coding Process (full table in appendix 9.2).

To conclude, we aligned the open codes and linked them into the re-codes where specific patterns were identified. Facing the next step, we narrowed the codes down into 6 sub- categories that link into 4 categories to aim for an in-depth understanding as proposed by Charmaz (2008). Executing the last step, we re-evaluated and concluded that some factors were missing, thus we went back and screened the re-codes again. Finally, we concluded our derived Coding Tree. The process is depicted in figure 3. It can be seen that codes emerged into sub-categories, and further how the sub-categories build the categories. Sub-categories were only established if necessary, and codes could also directly emerge into a category. The established categories with the belonging sub-categories will formulate our framework which can be seen in chapter 4.5, Invite-Only Social Networking App Initial Adoption Framework, to fulfill our research purpose.

Figure 3: Overview of the Emerging Categories (own elaboration).

3.6 Research Quality The quality of research is decisively influenced by the beliefs and decisions of the authors. To ensure high quality, Guba (1981) established a framework to ensure the comparability and trustworthiness of a study and limit the impact of the authors. The framework mainly considers the credibility, transferability, dependability, and confirmability of a study. These categories will be discussed individually regarding this study in the paragraphs below.

The credibility of a study can be ensured by a thoughtful sampling process and an accurate statement of information (Guba, 1981). It mainly refers to the confidence in the correctness and the truthfulness of research (Guba, 1981). In this study, the participants

were selected using actual social networking app user criteria, which were established before conducting the study. By conducting interviews with participants who were not users of invite-only social networking apps we also made sure to evaluate if their insights about their perception of invite-only apps are beneficial to answering the research question. Non-social networking app users were excluded from the study, but since this was not the main concern of the study, it therefore does not lower the credibility of the study. However, before conducting the interviews we also conducted a focus group, including non-social networking app users, ensuring we are not missing relevant insights to our topic and re-assessing our sampling criteria. Although Guba (1981) argues that, in general, sampling is not always perfect, but it can be credible if the sampling participants are representative. We considered creating a representative sample crowd by ensuring to have a diverse sample within our relevant criteria, as the age, gender, occupation, and interaction with invite-only social networking apps varied.

Another important factor increasing the credibility of our study is triangulation. Two researchers were involved in the study which allows different observations and conclusions enriching the credibility of the study (Anney, 2014). To analyze the study, the perception of both authors was considered and discussed to derive conclusions. A helpful method to save our observation was the Memo Manager of Atlas.ti, the program that was used to code the gathered data. The triangulation strengthens the credibility of the data as the findings are based on multiple perspectives (Anney, 2014).

Lastly, peer debriefings in the form of seminars were conducted to ensure a high credibility of the procedure. During peer debriefings, the researchers are open to feedback from other researchers and peers to enhance the quality of the study (Anney, 2014). For this study, we participated in regular seminars that had the intention to challenge our procedure and identify potential factors decreasing the credibility. The participation ensured to be aware of these factors and incorporate feedback in all steps of the research to increase the credibility.

The transferability of a study is mostly related to the ability to refer the findings of a study to a broader context and larger population (Guba, 1981). Firstly, the thorough description of the methodology, including data collection, increases the transferability to similar settings and to draw conclusions. In our study, there are some limitations in terms of the background of the participants and sample size. More precisely, we are only

focusing on the German market and a specific age group, making it less transferable to other social groups. However, the largest demographic using social networking apps is within this age group (Karasek & Hysa, 2020), and therefore our selected criteria ensure to depict the most relevant group for a higher transferability. Another limitation is the predominance of Clubhouse as the subject of the study. However, as most participants also had experience with other invite-only social networks they were able to transfer some of the motivators regarding the invite-only strategy. This transfer done by the participants also shows the transferability of the concept to other apps using the invite-only strategy. To further increase the transferability of this study we also conducted a focus group to investigate the perception of other groups, for example, non-social networking users. Additionally, at the beginning of our study, we included the opinion of social networking users who have not participated in an invite-only social networking app to evaluate if their perception of the concept differs or if motivators could also be transferred, even if partially, to this group.

In terms of dependability, the selected research method is assessed and evaluated if it has an impact on the outcome of the study (Guba, 1981). To our best knowledge, we selected the research method most appropriate to our research methodology and the purpose of answering our research question. This is explained in detail in the previous chapters of 3.1, Research Philosophy, and 3.3, Research Design. Furthermore, the dependability is influenced by the replicability of the study, meaning if the same results would be achieved using the same approach (Guba, 1981). As this is a qualitative study focusing on the opinion of individuals, the findings of the individual interviews will vary. However, the number of our participants and their diverse backgrounds ensured higher dependability as we limited the risk to miss important insights. Additionally, we provided a thorough instruction in the methodology of this study of all actions taken and criteria considered that allows other researchers to replicate the study. Therefore, we argue that dependability is ensured as a study in a similar setting will most likely achieve similar results.

Lastly, confirmability refers to the limited influence of the opinion of the researchers on the research, which is a subject of nature (Guba, 1981). To ensure this, we took several actions to limit the impact of our opinions and beliefs. After designing the interview guideline, we consulted a professional user experience researcher who had a background

of almost 10 years in the field, specializing in conducting qualitative, in-depth user interviews. Furthermore, the researcher was knowledgeable in the design of interview guidelines and semi-structured interviewing techniques. The consultation had the purpose of testing the general understandability of our interview guide and making sure we are not biasing the interviewee with our questions. Additionally, we received feedback on our interviewing techniques and how to engage the interviewee. Thereafter, we adjusted the interview guideline and conducted another pretest interview to practice the interviewing techniques and further enhance the understandability of our interview guideline. For example, one topic we identified was that the term “invite-only closed social network” is biasing the user using the word “closed”. Therefore, we changed it to “invite-only social network” which implies the closed nature of the network but creates less bias by the interviewee. Additionally, independent coding was conducted by both researchers and a high degree of confirmability of the findings was identified. Furthermore, following Charmaz (2008) in our data analysis approach the researcher is an active part of the research, allowing us to have some guiding impact by previously created knowledge for example.

3.7 Ethical Implication Ethical implications are indispensable when researching to not just protect the integrity of this research, but also the well-being of our research participants (Bell & Bryman, 2007). Therefore, depending on the research context, it is important to respect the ethical aspects so that no harm occurs (Easterby-Smith et al., 2018). In that case, we followed the eleven ethical principles by Bell and Bryman (2007) to execute our research ethically supported. In the following, we will outline how we ensured the ethical principles to avoid any issues within all steps of our research. Since we researched in pairs, we followed the ethical aspects by self-controlling each other.

(1) While conducting our research and executing our interviews, we cared about the well- being and comfort of our research participants to avoid any harm. Therefore, our interview guide was created without creating any discomfort or embarrassment for the research participants. In such belonging, we created an open culture of free speaking with providing the free choice to end the interview process in case of any issue or discomfort.

Also, we made sure that all personal data and identity of our research participants are kept confidential without forwarding them to any 3rd party. (2) Further, the research participants’ dignity was highly valued whereas we respected all opinions and answers without trying to manipulate or influence them. Additionally, we continuously observed the emotional level while interviewing to prevent any distress. (3) While approaching the research participant for the interviews, we sent out the GDPR consent form (appendix 9.3) within our interview invitation via e-mail to ensure the participant's role and purpose of our research becomes transparent. Further, the consent form highlighted all relevant personal rights aligned with the GDPR such as the right to be forgotten or to withdraw, etc., but also about the data processing, so that all personal data will be kept anonymous and processed highly confidential. Further, we collected the signed consent form to ensure everyone gives clear permission and has read the consent form. Hence, before the interview started, we highlighted again the interview details such as asking about consent for the audio recording while stating again the personal data processing with a focus on anonymity. We further asked about any concerns or questions before the interview started. (4) While interviewing we did not intervene at any private level of the participants, rather we asked about general experiences and motivations which the participants were willing to share, thus, are topically related. Besides, we left out any personal statements such as the name of the hometown or any company name the participant works for to make sure the privacy is highly respected. For the data analysis, we overcame any personal linkage by complying with anonymity. (5) All data the participants provided to us were stored and processed highly confidential without giving any 3rd party access to it. (6) To ensure the participants’ anonymity, we did not ask about personal data except for age and gender. However, this was kept anonymous so that no linkage to the personal identity can be made. If the participant mentioned some personal details, we left them out within our data analysis to guarantee anonymity. (7) No deception was attempted by clearly illustrating the research purpose. Therefore, honesty and transparent communication within the research process were indispensable to further stress the participant's role within our research. (8) Affiliation does not apply to our research as we did not get any funding nor was the research purpose assigned to us, therefore we researched without any conflicts of

interests. However, the affiliation to Jönköping University was mentioned within our GDPR consent form, nevertheless, we did not obtain any knowledge about negative affiliations of the participants with Jönköping University, thus, do not expect any bias by mentioning the Jönköping University. (9) Honesty and transparency were ensured by continuous communication openly and transparently about what and why we will execute certain research steps which we e.g. did within our methodology chapter 3. But also, when interacting with the research participants to state what is expected and what their role is. Therefore, we obtained trust so that the research participants were willing to open and share their opinion which gives valuable insights for our research. (10) Reciprocity is important for our research as we will include the participants’ opinions and perspectives within our findings that will have an essential impact for further app market entry strategies. Since all of our research participants are users of social networking apps, our research result will have a positive influence. (11) To avoid any misleading information or misinterpretation of the results, we conducted the research process by two researchers. Therefore, different capabilities and perspectives were complemented. By audio recording and simultaneously taking notes, any bias or misguidance was prevented. This was even strengthened within the data analysis process by cross-checking and coding in pairs. Additionally, by working together with three other opposition groups including our supervisor, any bias or misinterpretation was circumvented.

4 Empirical Findings and Analysis ______The purpose of this chapter is to point out our findings. In that case, we will state our evaluated categories including the sub-categories visualized as a tree diagram. Each category will be described in-depth to face our research purpose.

In this chapter, the findings of the grounded analysis of all interviews will be presented. To provide an overview to the reader, the structure and connections of the categories are presented in a tree diagram in figure 4 below.

Since we develop a grounded theory, our identified categories were not prerequisites due to theory but derived by the participants themselves from semi-structured interviews. Additionally, during the analysis, we regularly took memos, whenever suitable, as suggested by Charmaz (2008) to help to make categories in accordance with our perception while reading the interviews. After conducting 14 interviews, we evaluated the following categories as the essential ones to investigate in-depth why users initially adopt invite-only social networking mobile apps and to understand the relevance for new social networking app market entrants. To get a holistic overview to answer our research question, the following will outline our findings grounded in the gathered data.

Figure 4: Coding Tree (own elaboration)

After collecting and analyzing our data, we evaluated three main categories which we defined as Artificial Scarcity, Closed Network, and Social Influence. The Contributing Factors are identified as another influence for the phenomenon of our research; however, they are not influenced by the invite-only strategy but impacted the initial adoption overall. Therefore, the main categories are essential for an in-depth understanding of our research question. Before we present and analyze the empirical data, we will shortly highlight the main categories and the implication for the initial adoption of the social networking apps based on the invite-only strategy derived from our findings.

Artificial Scarcity can be divided into the Desire of the Invitation and Limitation of Invitation. This category describes the ambivalent attitude to receive an invitation driven by the desire, but also the limited availability, that impacts the initiation for adoption.

Closed Network can be divided into Perceived Exclusivity and Community Perception. This category describes the perceived closed setting derived due to the invite-only strategy including the initial exclusivity but also the specific community perception that influences the initial adoption.

Social Influence can be divided into the Impact by Others and Fear of Missing Out. This category describes the social influence that fosters the initial adoption, thus being driven by others while a hype was initiated, but also by the fear of missing out that increases due to the invite-only access.

Contributing Factors were found as another category, however, that is rather indirectly influenced by the invite-only strategy, but indeed influencing the initial adoption. Therefore, it is rather stated as a contributing force to the invite-only strategy. Hence, influences such as the App Purpose, Sources of Attention, Covid-19 pandemic, and the Perception of Companies will be discussed.

To note, all quotes in the following chapters were originally stated in German but translated into English for this study.

4.1 Artificial Scarcity The main trigger of the invite-only strategy and the first point of reference for the user is the invitation. The strategy of the invitation limits the ability of the user to freely sign-up to a new social networking app and therefore has several impacts on the initial adoption. Artificial Scarcity resulted to be one motivator that influenced users to initially adopt the invite-only social networking app. To get a thorough understanding, the following distinction of Desire for Invitation and Limitation of Invitation will be made.

4.1.1 Desire for the Invitation

According to our findings, the Desire for the Invitation is influenced by three main motivators, namely the Excitement for the Invitation, the Perceived Obligation, and the Invitation Request. These will be discussed in detail in this chapter.

One aspect regarding the invitation was the Excitement for the Invitation. There were many emotions tied to receiving an invitation to a closed social network. We identified this aspect to be of relevance as the reaction to the invitation also reflects the anticipation the potential users had. Furthermore, the content feeling because of the invitation increases the positivity towards the initial adoption.

“Yes, I was happy that I got one now and it wasn't the best thing that ever happened to me, but I was happy about it, I'd say.”- Interviewee 14

Mostly, the emotions were positive and could be described as content, but also happiness or even euphoria.

“At Clubhouse I think I was kind of a bit euphoric, I thought, wow this is mega cool.”

- Interviewee 11

One risk that the initial excitement bears is the decreasing feeling of excitement during the trial phase within the initial phase of adoption.

“It was really cool then, I spent a lot of time with it, was very happy, and at some point, this euphoria died down a bit.”- Interviewee 11

Another reaction that is sometimes created by receiving an invitation is the Perceived Obligation to follow the invitation.

“(…) it would be super awkward if I didn't use it (the app) now.”- Interviewee 9

The perception that invitations are limited, and the inviter has granted it to the recipient specifically, not only creates desire for an invitation but also increases the chances that an invitation is also used.

“You know they gave up the invitation especially for you because you only have two invitations somehow.”- Interviewee 9

In the specific case of Clubhouse, the more invitations were granted the longer and the more intense users acted on the social networking app. Therefore, we identified another type of obligation as the users felt more pressured to use the app to be able to invite more users.

“So the activity is kind of pressured, you definitely have to be online so you can invite more people, that's not so cool then.”- Interviewee 5

Although this was not necessarily perceived positive, this increases the interaction and familiarity with the app in the initial adoption phase. This type of obligation is also connected to the proximity to the inviter, which will be discussed in chapter 4.3.1, Impact by Others, as the users sometimes wanted to discuss social networking apps with their friends and could not do so because of the limitation through invitations.

In general, in terms of initial adoption, the feeling of obligation enhances the actual trial of the app and decreases the chance of invitations not used. Also, none of the participants have associated a negative perception with the feeling of obligation towards the invitation.

Additionally, the Invitation Request was an action expressing the desire for the invitation. It was common for the participants to also request an invitation from someone that they knew was an active member on the social networking app. This was often connected to the fear of missing out which is further discussed in 4.3.2.

“(…) it was then just spilling over from the U.S., quite fascinating and exciting so I wanted an invitation as well.”- Interviewee 4

Requesting an invitation or signing up for a waiting list, which was available in the case of Clubhouse, demonstrates the additional effort users take to be part of the social networking app. This connected them on one hand with existing contacts, which serves the purpose of a social network but also portrays their interest in the app. Additionally, combined with the perceived obligation requesting an invitation increases the likeliness of the potential user to initially adopting the social networking app.

“So I said, ‘yes, I'm already on the waiting list’ (...) and then she said, ‘oh, I still have an invitation’.” - Interviewee 11

The request for the invitation has also an impact on the reaction of the user. In that case, the users were already expecting the invitation and it created not the same feeling of being considered, rather it served their purpose of wanting to belong to the network.

“I mean, I was expecting it [the invitation], so just normal like that.” - Interviewee 12

4.1.2 Limitation of Invitation

According to our findings, the Limitation of Invitation is influenced by two main influences, namely the Initial Barrier by the Invitation and the Simulated Shortage. These will be discussed in detail in this chapter.

In some cases, the participants perceived an Initial Barrier created by the Invitation. On one hand, as explained in the previous sub-chapters, the invitation established a barrier that created anticipation and excitement once overcome. The invitation is a barrier that the users must overcome, and it triggers some effort in that they have to request an invitation and take initiative. However, on the other hand, the perception of requiring an invitation is also perceived to be a barrier, which is not in all cases understood or appreciated. The participants mostly discussed those different aspects separately.

“So part of what I think of that is kind of exclusivity and on the other hand, a pretty high barrier to joining or participating in that.”- Interviewee 12

This is an example, where the participants described their journey overcoming the barrier of the invitation, but simultaneously criticized the limitation towards others. We found out that the participants had a different view of the barrier when they talked about the barrier that was hindering them to get on the app, compared to the barrier hindering others

to get on the app. More precisely, when talking about their journey to overcome the invitation as the barrier it was more associated with excitement, as outlined in chapter 4.1.1, Desire for the Invitation. On the other hand, when discussing the barrier towards others, the invitation is more seen as a limitation instead of a factor creating excitement.

Although the invitation is an essential motivator of the invite-only strategy, the perception can also bear risks.

“(…) the name is called social network, which actually implies that every social person should participate in it or at least have the chance to participate in it, so of course from the point of view it’s better if everything is open because everyone has the same chances to participate (…).” - Interviewee 8

This quote even brings the example that the differentiation is not only made between “me and others” but is also impacted by the overall perception of the app. Although the participants criticized the general barrier for an app created by an invitation, they rarely connected it back to the specific social networking apps they were active on. To elaborate, they described the concept of requiring an invitation as a limitation as it creates a barrier, however, they do not specifically mention it concerning a specific app they had experience with.

The main concerns by the participants, besides the concept being unfair in general, was a limited diversity and exchange of only limited opinions on the social networking app.

“So I think if there was an app that you needed an invitation for, it would not be so diverse (...).” - Interviewee 1

An additional concern is also that all apps, or at least a larger number, will eventually require an invitation. These multiple occurrences would bother the users and, according to their statement, would reduce their interest and desire for invite-only social network apps.

“I don’t like the hype of having an invitation for every new app that comes onto the market, because that’s no longer authentic.”- Interviewee 11

Also, the introduction of the invitation was sometimes perceived to be a Simulated Shortage. This induced several types of reactions from the users. Most frequently, the shortage was questioned as it was perceived that, if wanted, everyone can get an invitation. This also equated that it has to be an artificial shortage, as potentially if invitations are distributed with a higher frequency eventually the same amount as on an open social networking apps could sign up.

“So I don’t think it’s really the case that you’re standing there and can’t get in. And that means that, at the end of the day, just about anyone can go there.”- Interviewee 13

“Because I think it’s an artificial shortage of this app or of what you would like to have.”- Interviewee 3

This opinion was in most cases presented quite indifferent by the participants. However, some participants had a negative association with the limitation through invitations. In these cases, it was assumed that the simulated shortage of invitations was only to attract more users and no added value was seen to the social network app. This created a suspicion that in some cases prevented them from initially adopting the app.

”So it’s relatively obvious that the social network actually wants to have many users, but that’s why there’s actually no reason why it’s closed, so to speak, for the time being. I guess there’s no added value that makes it worth closing, because then the network would want to maintain that it only remains an exclusively selected circle.”- Interviewee 7

“I’m more of a fan of open networks because this artificial scarcity to be part of something I don’t think is so good.”- Interviewee 12

To conclude, Artificial Scarcity is created by the limited accessibility of the invitation. On one side, the scarcity creates a desire for the invitation. This is impacted by the excitement that is created by the invitation and the obligation that is perceived because another user is offering an invitation. This leads the participants to oftentimes request invitations from active users. On the other side, the scarcity of the invitation creates a limitation. This is perceived by the participants as a barrier to initially adopting the social networking app. In some cases, the shortage is perceived to be simulated, which was in most cases not negatively affecting the initial adoption.

4.2 Closed Networks As discussed in the previous chapter, the invite-only strategy creates a surrounding of a closed setting of the social networking app which was one reason why users initially adopted it. To get a thorough understanding, the following distinction of Perceived Exclusivity and Community Perception will be made.

4.2.1 Perceived Exclusivity

According to our findings, Perceived Exclusivity is influenced by three main influences, namely the Initial Exclusivity, the Perceived Privilege, and the Suspicion of Exclusivity. These will be discussed in detail in this chapter.

The findings show a feeling of Initial Exclusivity which was one reason that led the interviewees to initially adopt the invite-only social networking app.

“(...) that is, in any case, a bit more exclusive (...).”- Interviewee 5

Further, the findings show that due to the closed network most of the interviewees declared that they experienced a certain degree of exclusivity while participating and trying out the app. In that case, the group dynamic occurred to be more exclusive compared to an open social network, where everyone can join.

“(...) on such social networks with the invitation is simply that the group dynamic feels more exclusive at the beginning.” - Interviewee 11

Associated with the Initial Exclusivity, another impact why users initially adopted the invite-only social network was a sense of Perceived Privilege which was further strengthened during the trial of the app.

“I already felt a bit privileged”- Interviewee 5

“(...) is now perhaps such a small privilege to be there and to see how it has built up in such a way.” - Interviewee 9

Nevertheless, the findings show that the interviewees uphold a contradictory attitude, as they did not specifically mention at first that perceived privilege was the trigger to initially adopting the closed network. To clarify, the interviewees did not confidently point out to perceive privilege, but rather indirectly or in an underrated manner. Therefore, they rather

pointed out a comparison to other social networks without mentioning a difference. However, consciously the interviewees were driven by the perceived privilege that occurred due to the closed context.

“So of course you felt a bit, you were privileged, but I didn’t feel any different than if I were on Instagram now.”- Interviewee 6

Due to the initial exclusivity and feeling of privilege, the perception was equalized of entering a cool club that was highlighted by one interviewee.

“I would say that you already have the feeling that you are somehow in a cool club.”

- Interviewee 4

Hence, as previously discussed in chapter 4.1.2, Limitation of Invitation, the invitation itself represents an entry barrier. However, the perception of the closed networking shows another boundary that creates a certain barrier to join this “cool club” that is not directly accessible to everyone, thus makes it more appealing to join.

“You always want to get into the club where it’s hard to get in.” - Interviewee 8

Further, while the perception of entering this closed network was found out to be ambivalent, some interviewees mentioned it to be an unfair concept with restrictions. Nevertheless, we found out that they also appreciated this closed environment since it was perceived as a higher protection barrier that gives the feeling of a limited user rate, so not everyone is participating within the closed app.

“Yes, because logically you are a bit more protected in the apps that are by invitation.”

- Interviewee 6

Although some interviewees mentioned that they are aware that the closed network is just to a limited extend closed since everyone can access it through the invitation that is discussed more in-depth in chapter 4.1.2, Limitation of Invitation, the interviewees outbalance the Suspicion of Exclusivity by the feeling of the protection barrier and privilege due to the closed network.

“But I think inside there’s a feeling of privilege and somehow a bit of protection that not everyone has this app, even if you know indirectly, of course, that the invitation can still be sent to everyone.” - Interviewee 6

In alignment with the higher benefits perceived that decrease any suspicious attitude, we found out that the closed setting only works to some extent. In fact, we found out that the virality of the closed app loses attraction if the entry barrier becomes too simple to overcome. Thus, the perception of the closed setting will decline, as one interviewee stated:

“So if it is obvious that virality is to be generated with it. So come in, then you get 2 invitations yourself, so multiplication effect or potentiation effect is generated with it, if that is relatively obvious, then that immediately loses a lot of appeal for me.”

- Interviewee 7

4.2.2 Community Perception

According to our findings, Community Perception is influenced by three main influences, namely the Elite Community Perception, the Like-Minded Community, and the Community Affiliation. These will be discussed in detail in this chapter.

The findings show that besides the exclusivity perception also the perceived community- led users to initially adopt. In that case, most interviewees obtained the feeling of an Elite Community since it is not directly accessible to everyone, thus, it impacted the desire for an invitation.

“That’s why it’s more of an elitist circle for me.”- Interviewee 2

To give more insights into the perception of the elite community, the findings show that due to the perceived closed setting the interviewees acquired the feeling of a sort of filtration of people which created a sense of elite.

“So it’s definitely just nicer when people are filtered. Because then this community is somehow so much stronger at the moment, because you can really choose peers with whom you can talk and communicate (...).”- Interviewee 5

Besides, the interviewees also experienced the filtration of people as an exclusive selection of people that led the interviewees to gain excitement to initially adopt.

“Where I know (…) it’s an exclusive selection of members and then that’s exciting to get in there then.”- Interviewee 7

In addition to the exclusive selection of users, the findings show that the interviewees experienced an interaction with a Like-Minded Community. Through like-minded people, the findings show that some interviewees experienced that the community matches, meaning that the interaction among each other was perceived as positive since the users consciously decided to join. Thus, the interviewees perceived somehow higher benefits rather than potential conflicts within traditional open social networks.

“(...) and that the people who are there decide more consciously to be there and also feel the benefit for themselves, and on the other hand, with an open network, I think the potential for conflict per se is a bit higher.” - Interviewee 12

As the findings show, the perception of the like-minded and elite community perception was not just positively driven, some concerns were also brought up. To illustrate, some interviewees experienced the impression of a conceited community due to the selected circle, however, which was neglected in the same thought after realizing that everyone who wants to join can enter. Therefore, the conceited suspicion decreased while equalizing the community to other open social networking apps.

“So that I just think maybe they are somehow conceited or so... Whereby I now also think those will also already be clear that there, in the end, everyone can go. Therefore, I do not know now whether the community is then really different.”

- Interviewee 13

Nevertheless, the findings show that there is a difference compared to open social networks as the Community Affiliation is higher due to the tight connection to the people. Hence, the feeling of affiliation is perceived since the interviewees could identify themselves with the social network, hence one interviewee equalized this feeling as a cooler community base.

“(...) on the one hand, to connect with people I already know and, on the other hand, to be able to perceive information, content that is mainly on this networking app.”

- Interviewee 12

“(...) if I invite them (…) it's kind of a little bit more supportive and a little bit just cooler community base somehow.” - Interviewee 5

On the contrary, one interviewee mentioned the opposite of the community of closed networks consisting rather of strangers. Traditional social media include more known people. This was also perceived as a looser community without much control. Further, this made some interviewees create a negative perception that subsequentially declined the usage. To clarify, in the end, more people ended up joining the app, which was perceived even more distracting than traditional open social networking apps supported.

“(...) so it's more strangers that you don't know. Otherwise, in other social media, it's more people you know.”- Interviewee 10

“(…) because now it's more like ‘I'm in a room with 7000 people’ (…) and somehow also more on a one-on-one basis and more personal and therefore that was a reason for me to also say that it's just not the same anymore simply because the quality has suffered a lot because of that.”- Interviewee 11

To conclude, the findings show that one motivator that led the interviewee try out the invite-only social networking app was driven by the closed network. In that case, the interviewees experienced the invite-only as limited access that increases the perception of an initial exclusivity but also the feeling of privilege as not everyone can access it directly. However, the interviewees raised also concerns as the virality of the closed network loses the exclusive and closed character if more and more users can enter. Nevertheless, the perceived elite and like-minded community made users feel affiliated to the closed community that motivated them to initially adopt this app.

4.3 Social Influence Another influence that we found out which made users initially adopt the invite-only social networking app was the Social Influence. To get a thorough understanding, the following distinction of Impact by Others and the Fear of Missing Out will be made.

4.3.1 Impact by Others

According to our findings, the Impact by Others is influenced by two main influences, namely the Initial Hype and the Proximity to the Inviter. These will be discussed in detail in this chapter.

The impact by others generated an Initial Hype that occurred through the new concept of having an invite-only social networking app. Therefore, the promotion was widely facilitated especially because it was talked about it everywhere. Thus, the impact by others initiated the willingness to try out the social networking app.

“Because I wanted to try it out and because it was talked about everywhere.”

- Interviewee 10

The findings highlight that the social influence impacted users, however, it influenced them subconsciously more than they were aware of or even would have admitted it.

“In any case, best example with Clubhouse, I just read somewhere that it's a hype and then I also have the desire to have it. And I think subconsciously, even if you rarely admit it, it influences you very strongly.” - Interviewee 8

Once everyone talked about it a hype was created as the findings show that nearly all interviewees were influenced by it.

“The hype also, in the beginning, no question at all.”- Interviewee 11

The essence to spread an initial hype at the beginning is indispensable as this makes users gain awareness and desire to try it out, otherwise, they would not have tried it.

“Yes, probably this hype, so probably if Clubhouse had not been so super on everyone's lips, I would not have signed up there.”- Interviewee 4

Hence, one interviewee supports the perspective of an invite-only strategy to foster the strategic establishment of a new network which leads to the creation of such a hype.

“I understand that tactically, strategically, it's so for building networks if you want to give it a bit of an exclusive thing that you can only get in by invitation, that certainly contributed to that hype at the beginning.”- Interviewee 4

In addition to the strategic establishment, some concerns were brought up in terms of the Initial Hype that influences potential users to adopt since it remains strong just at the beginning but declines during the initial phase.

”So I think it's the hype that's strong at the beginning, that it also increases the motivation in all the people to use the app. But then I think it tends to be rejected.”

- Interviewee 10

While the initial hype strongly influenced almost all the interviewees, the findings show a distinction of the Proximity to Inviter. While some interviewees pointed out to show a tight connection to a close circle of acquaintances, others just pointed out the essence in a trusted person.

“(...) but if it is a close friend or someone from the family, then it will already make a difference and I would rather look at it. Just depends on how I stand to the person.”- Interviewee 2

”Yes, in any case, so if it comes through a trusted person, then my willingness to look at it more intensively is naturally greater.” - Interviewee 7

Besides, the Proximity of the Inviter was discussed ambivalently. Thus, one interviewee stated that the close connection to his social surrounding of being best friends created a stronger influence through talking about the app and raising their interest to join. In that case, the concern was mentioned of feeling a sort of obligation to include them into this social networking app, which can be counterproductive if no invites are left.

“(…) Of course, it's stupid if you want to tell your best friends, but they're not in yet or don't have an invitation yet and you don't have any left.”- Interviewee 8

Controversially, one interviewee mentioned that the proximity to the inviter did not matter, rather the content was crucial that impacted the interviewee to try it out. Nevertheless, the initial impact by others to hear from the app was essential to establish interest to try the app that though influenced the interviewee.

”No, I think I was relatively indifferent. So I thought I would just like to try it out, that is, to join. But it didn't matter who it came from.”- Interviewee 14

”But then some of my friends (…) we just talked about it and then (…) I thought to myself yes would be quite interesting.” - Interviewee 14

While the proximity to the social influence especially the inviter impacted the respondents, the significance of the app content needs to fit the users’ expectations to try out the app which will be further discussed in 4.4.1, App Purpose.

”Yes, so if I get an invitation for the app from anyone, I wouldn't even consider it. So then it has to be someone from my circle of acquaintances and of course, I have to know the app, otherwise, I wouldn't just sign up now.”- Interviewee 12

The findings show that almost all interviewees declared the perceived hype made them try out the invite-only social networking app, some interviewees put this even further by mentioning the force as the fear of missing out due to the impact of the social influence that will be further discussed in the next chapter.

“Already that I have the feeling that I'm missing something. So and also because she told me as a friend that she uses that.” - Interviewee 13

4.3.2 Fear of Missing Out

According to our findings, the Fear of Missing Out is influenced by two main influences, namely the Desire of the Unreachable, and the Curiosity. These will be discussed in detail in this chapter.

Our findings show that due to the invite-only strategy that limits the direct access whereas a certain exclusivity was perceived, the interviewees highlighted a stronger fear to miss out if they do not participate. Some Interviewees perceived the feeling to acquire something which is not easy to get that refers to the Desire of the Unreachable.

“Yes I think it is actually so, if you cannot have something then you want to have it super badly.” - Interviewee 9

Besides, the findings show that the attitude to be the first mover was another influence why users initially adopted the app. In fact, the desire to get first insights before anyone else raised the appeal to try it out.

” (...) and that you are among the first to use it, that you get a little sneak peek before everyone else can see it.” - Interviewee 9

Aligned with the desire to be the first mover, the Curiosity to try the new occurrence of social networking app based on an invitation was increased which led the interviewees not wanting to miss out rather be part of it.

”Yes, because I want to be part of something and I'm just very curious about how things develop, what's going on and I don't want to miss anything.” - Interviewee 4

The feeling of missing out was closely connected to the curiosity in gaining insights but also the desire to be able to talk about it with others which led the interviewees to try out the app.

”But it was so the curiosity and also true feeling of missing something because there are some exciting things happening.”- Interviewee 4

Besides, we found out that the feeling of missing out led to peer pressure. Taking this even one step further, we found out that some interviewees even felt the fear of becoming an outsider if they do not try it.

”But I think (…) that one succumbs so a bit to the peer pressure.”- Interviewee 13

“As I said, I think exclusivity is naturally a bit appealing - you want to belong, you almost feel a bit like an outsider if you don't get an invitation.”- Interviewee 8

To conclude, the findings show that one motivator that led the interviewee try out the invite-only social networking app was driven by their social influence. In that case, because the interviewees were impacted by others and everyone talked about it, a perceived initial hype was created. Furthermore, all interviewees declared the initial hype made them try out the invite-only social networking app. Besides, the interviewees also mentioned it as the force of the fear of missing out that was equalized as becoming an outsider. However, also concerns were brought up where the initial hype was perceived only for a short time that quickly declined during the initial phase of adoption.

4.4 Contributing Factors The success during the initial adoption of an app is, of course, not solely linked to the marketing strategy. This is also the case for the invite-only strategy. There are additional factors relevant that potential users base their decision on to initially adopt a social networking app or to reject it after trial. According to our findings, the Contributing Factors are affected by four influences, namely the App Purpose, the Sources of Attention, the Perception of Companies, and the Covid-19 Pandemic. These will be discussed in detail in this chapter.

4.4.1 App Purpose

One aspect for potential users, acquired from our findings, is the App Purpose it is aspiring to fill. More precisely, the content, the type of presentation, and, in general, the purpose of what users intend to use the app for needs to be appealing to potential users.

“That I'm somehow purpose-driven there, too, so that it's about a topic where I also somehow see added value and where I can also contribute something, but also somewhere I take something out of it, so where I myself am also inspired.”

- Interviewee 11

This is in some cases even enhanced by the fact that the social networking app requires an invitation, as the previously discussed effort to get into the network needs to be justified in some way.

“The fact that the process is obviously a bit more time-consuming, that you have to somehow interact with people independently of the app beforehand, I would say that it has to give me an added value, so I have to be able to recognize an added value for me at least at first glance.”- Interviewee 12

4.4.2 Sources of Attention

The Sources of Attention are another relevant influence factor on the decision to initially adopt an app that was identified during the study. Potential users need to hear about the app in diverse channels to foster their attention. This is a decisive influence also on the initial hype for an app, but it is also an external factor as this is not only influenced by the marketing activities by the company but the word-of-mouth in combination. More precisely, it was not consistent on which types of media the participants wanted to become aware of a new app, but a majority wanted a diverse input of information through various channels.

“So in general, before I use an app, I hear a lot about it, from friends in my private life and so on. Depending on what I hear about it here or what I also hear about it through other apps, possibly yes, possibly no.”- Interviewee 1

“For Clubhouse, the press and the society just made this contribution (...).”

- Interviewee 11

4.4.3 Perception of Companies

Although the Perception of Companies can differ on invite-only closed social networking apps, it affects the willingness of the users to initially adopt the app. One form of inclusion of companies is also requiring them to have an invitation for individuals. The following factors are only relevant for this form, however, it is also possible to have companies advertise on closed social networking apps, as can be seen in the early forms of Facebook.

The representation of companies through individuals on invite-only social networking apps mostly positively affected the perception of the message of the company.

„The aspect you somehow get a closer connection, you already had the feeling that you are already part of the action and can also ask them something. Well, I never asked anything, but they always gave answers, brought people up who were allowed to ask questions, so you feel closer to the companies, so to speak, and as if you were part of the action.”- Interviewee 6

This is a contributing factor because on open social networks the participants indicated to be annoyed by the consistent targeting of brands through marketing. Therefore, enhancing the perception of companies is affecting the decision of users to initially adopt the app. Even more so during the trial phase that is spent using the app.

4.4.4 Covid-19 Pandemic

Although the Covid-19 Pandemic is not a direct variable in the initial adoption process of a social networking app, the pandemic was mentioned as a positive influence. The study was not only subject to the social networking app Clubhouse, however, the majority of participants had recent experiences with the app that were also subject of the study. We did not want to neglect the mentioning of the social life situation during the global pandemic as an influencing factor on why the app was used. This can be regarded as an enhancing factor and was even more relevant as the pandemic increased the desire of people for social interaction. This desire was on one hand fulfilled by the social networking possibility on the app itself.

“(…) but then, of course, Corona has also supported it a bit where you have nothing to do anyway because I just thought, look at the fun times.”- Interviewee 8

However, other social networking apps also benefited from the invite-only strategy and were not launched during a global pandemic. Therefore, we regard this social situation as an enhancing external factor, but not a decisive one.

To conclude, we identified four contributing factors to the initial adoption of social networking apps, namely App Purpose, the Sources of Attention, the Perception of Companies, and the Covid-19 Pandemic. These factors are not affected by the invite-only strategy directly, but we identified them to still be relevant for the initial adoption of invite-only social networking apps.

4.5 Invite-Only Social Networking App Initial Adoption Framework Based on the previously presented findings, we derived a framework that is shown below in figure 5. We identified that all motivators to initially adopt an invite-only social networking app are based on the dimensions of Closed Network, Artificial Scarcity, and Social Influence. However, our findings show that Artificial Scarcity and Social Influence represent a stronger influence on the initial adoption than the Closed Network, nevertheless, all three dimensions impact the initial adoption of the invite-only social networking apps. Furthermore, our framework also includes the contributing factors illustrated at the bottom that are depicted not to be influenced by the application of the invite-only strategy. However, they still have an impact on the initial adoption of invite- only social networking apps.

To generate a more in-depth understanding and to create meaning from the findings, we identified connections between the attributes that will be discussed below.

Figure 5: Invite-Only Social Networking App Initial Adoption Framework (own elaboration).

The main goal and outcome of the framework are the motivators to investigate why users initially adopt the invite-only social networking app. Therefore, the motivators resulted to be the antecedents of the initial adoption. To give an overview of the framework, the three bars represent the identified categories of our study, namely Closed Network, Artificial Scarcity, and Social Influence. These three main categories represent the antecedents of the initial adoption. All antecedents have two main motivators that are either influencing the desire to initially adopt a social networking app or influencing the fear to miss out which leads the user to adopt the app. What can be seen by the arrows between the boxes is the interrelation. In general, we argue that the main motivators are ambivalent. On the one hand, one main motivator can be triggered by the fear created by the invite-only limitation to initially adopt the invite-only social networking app. On the other hand, the initial adoption is created from the desire-driven perspective. Both main motivators will be more elaborated in the following by pointing out the different arrow streams.

The two most influential streams between the sub-categories pointed out by the arrow connections one and two will be clarified in the following.

Facing the first arrow stream, the Limitation of the Invitation affects the Impact by Others because of this limited perception of invitations through which an initial hype and high word-of-mouth communication are created. The interaction with their circle of acquaintances or general trusted people increased the strive for engagement of the invite- only social networking apps. This being said, because of the Impact by Others, the desire was evaluated higher to receive an invitation to try out the app. Hence, the excitement rose to pursuit such an invitation while even an invitation request was facilitated. Besides, it led to the obligation for a further invitation that strengthens the Desire for an Invitation. We argue that this factor itself influences the initial adoption due to the Artificial Scarcity, however, we also noted that there was another interconnection with the Community Perception. Therefore, the interconnection is both-sided. To clarify, we assessed that the Desire for Invitation correlates with the perception of the social network app community based on the invite-only strategy. To highlight, some interviewees stressed the more elite community perception with the expectation of a like-minded community with the community affiliation as an essential force to initially adopt. In return, the perception of such a community also impacted the Desire for the Invitation, thus leading to the initial adoption. Since there is a higher interconnectedness to the Desire for Invitation, we concluded this category as one strong influential category on the initial adoption.

The second arrow stream also starts at the Limitation of Invitation which impacts the Perceived Exclusivity created by the invite-only strategy. As the closed network is perceived to be exclusive this impacts the Fear of Missing Out, as potential users do not only want to feel exclusive but have the feeling they are missing out on the discussions or content of the exclusive community. As the findings already mentioned, fear of missing out is not a rare factor that occurred based on the invite-only strategy since this can be a general attitude, however, we argue that this fear was strongly increased due to the perception of exclusivity that occurred due to the limited invites needed. Besides, the perception of feeling privileged due to the elite surrounding was ambivalently discussed. On the one side, it was an aspirational factor to feel privilege impacting the initial adoption. On the other side, it was also negatively attached by stating the conceited attitude of those networks. Nevertheless, these impacts stressed the initial adoption from the fear and pressure to miss out, thus becoming an outsider. Hence, we derived that Fear of Missing Out is strongly interconnected and directly influencing the initial adoption,

increasing its relevance. Therefore, the Social Influence category can also be considered to have a higher effect on the initial adoption.

What can be seen in the framework is that most arrows are affecting the desire for the invitation and the fear of missing out. Also, these are the justification why these streams are evaluated as the predominant motivators to initially adopt, whereas the belonging category represents the stronger influence on the initial adoption than Closed Network.

This does not mean that the other sub-categories are less important, as they also directly influence and create fear and desire, however, the highlighted two arrow streams within the framework turned out to have an immediate impact on the initial adoption. In that case, these two arrow streams portray the main motivators Desire for Invitation and Fear of Missing Out to initially adopt an invite-only social networking app, that is influenced by the other sub-categories, all on the three dimensions of Closed Networks, Artificial Scarcity, and Social Influence.

The derived results of the sub-categories were already critically discussed within the chapter 4, Empirical Findings and Analysis. However, we identified some limitations of our established framework. In the following, we will discuss these limitations of our framework while further limitations that impact the scope of our study will be discussed in chapter 6.6, Limitations.

We identified with the Contributing Factors specific influences on the initial adoption which are not directly impacted by the invite-only strategy. Nevertheless, these contributed to users initially adopting the invite-only social networking app illustrated at the bottom of figure 5. We argue that this can be a limitation, as there might be also other contributing factors that influence the initial adoption outside the scope of the invite-only strategy. However, the ones shown in figure 5 derived from the empirical findings stated by the interviewees which turned out to be crucial for this study.

Besides, while discussing the Contributing Factors, we examined that one specific influence defined as the Covid-19 Pandemic especially occurred during the time of the study being conducted. Therefore, one can argue that this force is just temporarily, thus might not impact the initial adoption in the future. In that case, it can be seen as a limiting factor in our results. However, since we found out that the contributing factors were not

directly influenced by the invite-only strategy, which was our research purpose, instead they contributed to the initial adoption in general. Consequently, we do not see this factor as a force that could distort our findings.

5 Conclusion ______This chapter highlights the findings and analysis of this study to serve the research purpose by answering the research question and closing the identified research gap.

In this study, we aimed at an in-depth understanding of the motivators that foster the initial user adoption of social networking mobile applications based on the invite-only strategy. To follow this purpose, we proposed the following research question to guide our study:

RQ: Why do users initially adopt social networking mobile applications using an invite-only strategy? To answer this research question, we conducted inductive and exploratory research aimed at the Grounded Theory. By that means, we conducted 14 semi-structured interviews. By applying the Grounded Analysis technique, we analyzed the gathered data within an iterative process to stay as close as possible to the obtained data. With our derived findings and enriched knowledge, we are closing our identified research gap within the field of technology acceptance, scarcity in digital marketing, and virtual social networking apps. Furthermore, we developed a framework that describes the motivators of the initial adoption of social networking apps using an invite-only strategy by also discussing the most important motivators. In that case, we investigated that the motivators that lead users to initially adopt the invite-only social networking app derived from Closed Network, Social Influence, and Artificial Scarcity. However, we also evaluated that there are Contributing Factors that impact the initial adoption, but not being primarily impacted by the invite-only strategy.

Through the empirical findings we revealed an in-depth understanding that although all categories including the belonging sub-categories influence the initial adoption, we concluded that there are two main motivators. More precisely, these motivators are assessed as desire-driven, defined as the Desire for Invitation but also fear-driven as the Fear of Missing Out. As these sub-categories occurred to entail the most interconnectedness among the sub-categories, we argue that these dedicated categories are the highest motivators for the initial adoption of the invite-only social networking app.

6 Discussion

______This chapter concludes our study by contributing, challenging but also enhancing existing literature.

There are various theoretical implications to this research. To present an overview, the topic overview from chapter 2.5, Connection of the Literature Topics, in figure 6 can be seen again below. Our study is primarily contributing to the fields of Technology Acceptance, Scarcity in Digital Marketing, and Virtual Social Networking Apps. All contributions and impacts will be discussed separately in the following sub-chapters.

Figure 6: Illustration of the Research Gap (own elaboration).

6.1 Technology Acceptance The current literature in Technology Acceptance is largely focusing on the overall adoption or intention to use. In the case of mobile applications, the previously introduced models of TAM or UTAUT are predominantly used to evaluate the acceptance by users. However, for the case of the invite-only marketing strategy, we identified that particularly the initial phase of adoption is of interest, as it is a technique to initially attract the potential user.

Therefore, we referred to Antil (1988) who underlines the essence of the psychological view within the initial phase of adoption before one can discuss adoption/rejection. Our empirical findings and knowledge derived from the main motivators confirm the essence of the initial phase of adoption pointed out by Antil (1988). By that means, we assessed that during the initial phase the attitude for adoption is shaped. We incorporated not only the behavioral execution in trying out the app, but also the motivators that led the user to initially adopting the invite-only social networking app.

Further on, this leads us to challenge the view by Rogers (2003) in defining the adoption as just the behavioral execution in using the app. In other words, we generally align with Antil (1988) by distinguishing that the trial usage does not necessarily lead to the adoption. We found out that although the above-mentioned motivation streams foster the initial adoption it does not necessarily mean that the actual adoption will be developed. To clarify, our findings show that although the main motivators from the fear- and a desire-driven force led all our interviewed users to initially adopt, we could not set it equal to the actual adoption as Rogers (2003) would have argued. In such an instance we derived knowledge that not all the interviewees continued to use the app after a trial due to other reasons which go beyond our research.

Although we are particularly focusing on the initial phase of adoption in this study, the identified antecedents still have relevance for the overall technology acceptance. The initial phase is still a great influence on the overall adoption of an app, and as previously identified we are contributing to strengthening the importance of the initial phase for relevant topics impacting this particular stage, such as the invite-only strategy. Therefore, we are also contributing to the technology adoption model literature. The antecedents we identified, such as artificial scarcity and closed networks, go beyond the current antecedents of the technology adoption models. However, aligned with UTAUT we also

found social influence as another force to foster the initial adoption. Therefore, we found similar antecedents as essential, however, we also enhance the antecedents by introducing new ones. The identified antecedents of artificial scarcity and closed network do not apply to all mobile apps or even more technologies in general, but there are more forms of artificial scarcity where these antecedents could generally impact the adoption and would therefore enhance the adoption models in some cases.

Lastly, we are challenging the current technology acceptance research as we are providing a more in-depth depiction of the motivators that lead to the adoption of technology in a specific case. The more detailed framework enriches the literature with a more specific impact of the antecedents. In the case of the UTAUT model, for example, social influence was also identified as an influence on the adoption (Venkatesh et al., 2003). However, there is no distinction made what specifically motivates the potential users. In other theories, the general trial phase is considered, but it is rarely specified what influences the potential users during this time. As there are many influences for different types of apps and marketing strategies in the beginning this would be impossible to conclude in one specific theory, however, bridging the gap of the influence factors during the initial adoption is an important step.

6.2 Virtual Social Networking Apps The literature concerning Virtual Social Networking Apps is rich, which is not surprising due to the relevance in the business world. In this study, we are not focusing on the general perception of social networking apps but focus on the field of closed social networks.

The invite-only social networking apps are part of the closed social networks described by Choi & Lee (2017). Although the invite-only closed social networks have a smaller user number than open social networks, the association with the community is perceived to be higher (Choi & Lee, 2017). This is supported by our findings emphasizing the like- minded community and the community affiliation. Besides the Community Perception, we also identified Perceived Exclusivity to be an important motivator for Closed Social Networks. Although there are different ways to access the Closed Social Networks as introduced by Choi & Lee (2017) there is always a barrier to enter such a network. This leads us to believe that Perceived Exclusivity, which was mainly associated with the

barrier of the invitation in our findings, enhances the understanding of Closed Social Networks and the intention to use them. In general, we contribute to the Closed Social Network literature by focusing on the second level of closed networks and differentiating the user impact for this type. This consideration of the different types of closed social networks was already requested by Choi & Lee (2017).

The Fear of Missing Out rather outlines the fear of potential users missing out on information or conversations. This is driven by the desire to stay connected and the negative perception, including fear and anxiety, to miss meaningful conversations, events, or experiences of one’s social environment (Przybylski et al., 2013). We support the impact of FoMO with our findings as we identified it to be relevant why users initially adopt closed social networking apps. We also contribute to the FoMO literature the impact of closed social networks and the general barrier to entry with an invitation on the important impact of FoMO. As the users do not have the power to independently sign up if they want to access a closed social network but rather need to overcome some kind of barrier the FoMO was described to be higher by our participants. The impact of limited access has, to the best of our knowledge, not been discussed in the context of FoMO but has an important impact, which is another contribution of our study. Through our findings, we found out that FoMO belongs to the Social Influence that is even interrelated to the Impact by Others. The Impact by Others describes mainly the proximity of the social environment. This is supported by social contagion theory, which states that the consumption of a person, in this case the initial adoption, is impacted by the consumption of others (Langley et al., 2012). Especially, this concept underlines the social group belonging to decrease uncertainty that fosters a higher identification with the group (Abrams & Hogg, 2006; Hogg et al., 2004). Especially, in the digital age of SNS, where online and offline activities are interrelated within a circle of contact, the fear to miss out increases even more (Przybylski et al., 2013). Derived from our findings, we align with the view of the increased FoMO with the rise of SNS accessible through the mobile devices which resulted to be one of the main motivators to initially adopt the invite-only social networking app. Therefore, we align with literature stating that FoMO is influenced by the impact by others, however, we take this even further to evaluate this force as one of the strongest impacts on the initial adoption due to the limitation of invitation. Besides, while the literature states FoMO as a commercial tactic but lacking the prerequisites and consumer effects (Hodkinson, 2019), we enhance this view by stating that FoMO is being

created by the perceived exclusivity that derives from the limited invitation as part of the artificial scarcity to promote user attraction. Therefore, the effect is that users are eager to try out this app and initially adopt that is strengthened due to the artificial scarcity. This leads to our next theory contribution of Scarcity in Digital Marketing.

6.3 Scarcity in Digital Marketing While studying literature on scarcity, we obtained insights into product scarcity in marketing, however, lacking the specific context of digital resources.

In terms of product scarcity in marketing, it is an important contribution to further investigate specific types of product scarcity marketing methods, as various options are possible. As suggested by Shi et al. (2020), it is important to create more in-depth knowledge about the individual types to further understand the specific motivations of consumers. This is, in more detail, the contribution, as we are also illustrating why users specifically are impacted by the invite-only marketing strategy. This enhances the literature as it generates a deeper understanding of the marketing strategy in the digital field.

Further, while the literature on scarcity lacks the digital marketing context, literature instead argues that scarcity of digital goods is artificially created due to the characteristics of digital goods as being intangible, non-excludable, non-rival, and recombinant which we classify the invite-only strategy into (Raya, 2008; Nylén, 2015; Toledano, 2018; Schwartz, 2017). However, while literature discusses the context of artificial scarcity from the perspective of the intellectual property and barriers of paywalls (Sullivan, 2016; O’Dwyer, 2020), we enhance literature by arguing through our findings that the artificial scarcity created through the invite-only strategy leads to an essential contribution as a digital marketing strategy. By that means, we challenge the current literature context of artificial scarcity as the exclusion derived as a protection barrier, instead, we argue artificial scarcity as an essential digital marketing tool to trigger potential users’ interest through our developed framework. To enhance this perspective, we derived knowledge that artificial scarcity was one motivator to foster the initial adoption. The artificial limitation created a desire for the invitation, making it more valuable to the user. Therefore, we investigated artificial scarcity as an important digital marketing strategy.

Derived from our knowledge, the invite-only strategy is a form of limiting access by only providing access to users with an invitation. This limitation of access to digital goods is essential to overcome digital abundance (Toledano, 2018). Although current literature is predominantly focusing on the topic of copyright and other exclusion methods such as payment walls, our derived knowledge about Artificial Scarcity in the form of invite-only enhances existing literature by contextualizing this strategic digital marketing approach. Furthermore, although the definition is still in line with Sullivans' (2016) description of Artificial Scarcity as a purposefully implemented technical restriction that hinders or reduces software access. However, the introduced dimensions focus on user attraction through Artificial Scarcity as a digital marketing strategy. This is enhancing the current artificial scarcity literature that is mainly applying it to limit the usage to protect the owners’ rights.

6.4 Practical Implications The theory derived from the study depicts an overview for marketing management on what specifically affects the potential adopters of invite-only social networking apps. The individual categories and their connections can be used to create successful marketing for this type of app. It is essential to understand the underlying motivators of users and why they initially adopt the app to tailor the marketing strategy to make it most effective.

There are several decisions companies must take to design their specific invite-only strategy. The framework derived from our study can help to understand if and what effect specifically these design decisions will have on the motivation of users to initially adopt. In terms of artificial scarcity, the number of invitations granted to each new user for example has to be set. This will both affect the desire and the perception of limitation of the invitation and therefore has to be high enough, so users have the feeling they can receive an invitation and also not enhance the negative perception of a barrier for others. However, as the limitation of the invitation also directly influences the Perceived Exclusivity this should still be ensured as if too many invitations are granted to each user this perception of exclusivity will be lost which aligns with the perception of the artificial scarcity of digital goods.

Another impact would be the target group and here within the first distributors of the initial invitations. As the potential users are highly influenced by the Impact by Others, their desire will be shaped by the type of people they hear of the app about. Also, this will affect their community perception, of which an important factor is the occurrence of like- minded people. Therefore, the targeted community should be desirable, but also have a larger group of like-minded individuals that will be attracted by the concept.

Furthermore, the framework gives a reference of contributing factors that also need to be considered for the design. For example, also connected to the invite-only strategy the occurrence of companies needs to be defined if they have to receive invitations for individuals or are able to advertise as a company. These factors also influence the perception during the initial adoption process and should be aligned with the design decision of the invite-only strategy.

To conclude, there are many decisive factors to implement a successful invite-only strategy. The strategy must be consistent within itself, but several variations are possible and can be effective. This can be seen by the various previous examples that were all different in their design in terms of the number of invitations, targeting, etc. The derived framework for the initial adoption of an invite-only social networking app helps marketing managers to understand the interrelations and design a consistent marketing strategy.

6.5 Social Implications In current literature, social implications induced by the interaction of SNS are increasingly discussed. The usage of SNS has become the “normal” state of living (Kuss & Griffiths, 2017) and therefore impacts the social life of individuals and groups in diverse ways. In our opinion, the awareness of potential impacts on society is crucial and, therefore, we would like to discuss some of the main social concerns associated with the usage of social networking apps and how specifically our study impacts them.

The concept of social media addiction is increasingly discussed, and the effects are similarly severe as for substance addicts, including obsessive behavior, impact on mood, and effects of withdrawal (Kuss & Griffiths, 2017). Especially FoMO has been identified to have an impact on social media addiction (Hamutoglu et al., 2020). In a study,

Hamutoglu et al. (2020) found that a vicious cycle between FoMO and social media addiction exists that eventually increases the behavior of a user into addiction because of the increased FoMO that established from seeing the content available during the extended usage. In this study we found FoMO to be one of the main motivators to initially adopt closed social networks. Therefore, it is essential to be aware of the social consequences FoMO can create while adopting the social networking app. However, as this study focuses on the initial adoption, we cannot include any insights about an addictive impact that goes beyond our research. The initial phase is all about creating potential users’ interest which can be triggered by creating FoMO derived from our findings. Therefore, we did not see any direct linkage to addictive behavior that could harm the individuals.

Additionally, the requirement of an invitation could also exclude some individuals, groups, or even parts of society. SNS are targeting primarily younger generations where the use is the norm (Kuss & Griffiths, 2017). In this case, not belonging to a network could exclude people and even create mobbing for individuals not on the platforms. This should be considered in the initial distribution strategy of the invitation to include many varied social groups and individuals. However, this could limit the impact of the perception of a like-minded community. It could be considered to target a group with specific interests and vary the initial distribution between these social groups, but anyway, the exclusion and bullying of individuals should be considered in the process.

Lastly, in the case of closed networks, the created content, discussions, and opinions are most of the time not shared with the outside world, attracting an audience that otherwise would not openly share their opinion. This could potentially attract for example racist, pedophile, or violent groups organizing their activities on these platforms. On one hand, we are arguing for further research on this topic and the impact of policymakers to target this problem. On the other hand, the platform operators should be aware of their responsibility and openly address forbidden content to increase awareness and also prosecute illegal activities to ensure safety for society. However, this shielding from society can also have a positive social impact. In our study, one participant mentioned that they were more comfortable expressing their sexual orientation openly than on open social networking platforms. The closed environment enhanced the discussion for them and provided a safe environment to express themselves freely.

6.6 Limitations To strive for high transparency of our study, in the following paragraphs we will acknowledge the limitations associated with our study.

Firstly, there are some limitations associated with our research design. In general, following a qualitative research approach limits the generalizability of the findings. Therefore, we are limited in the way our participants looked at the phenomenon and presented insights (Easterby-Smith et al., 2018). However, conducting qualitative research was the most appropriate form to gather information on the explicit motivators for users. This would not have been possible to do in-depth with a quantitative study.

Another potential limitation comes from the choice of our sample composition. Since we approached the purposive sampling with prerequisite criteria, we excluded other potential samples that could have given other valuable experiences and perceptions. To limit this risk, we conducted a focus group to get an overview of a diverse group of invite-only social networking users, social networking users, and non-social networking users. However, a risk maintains that insights were not detected due to the sample composition. Additionally, the number of participants itself is a limitation to the study, as we only included 14 interviewees. Especially when considering the opinion of people differences can vary the more people are asked. Although we continued scheduling interviews until no new insights were generated there is still a risk of missing further insights.

Secondly, there are limitations to the study associated with the execution of the research. Due to the ongoing global Covid-19 Pandemic in 2021, all interviews were conducted remotely. The direct interaction with the participants and getting an impression from a face-to-face meeting could have encouraged them to share more personal opinions and thoughts. Additionally, as the Covid-19 Pandemic was a present factor during the time of the study this was even outlined as a contributing factor. It is unclear how much the pandemic impacted the findings of the study. However, taking into consideration the success of previous SNS and the experience of the participants with the invite-only concept it is likely that the concept itself is still a relevant factor. Therefore, we described it as a contributing factor influencing the initial adoption, but not as the main impact on the invite-only strategy itself.

Further on, the study is limited by the subject of the research. The findings were influenced by the predominance of the invite-only social networking app Clubhouse.

Although the participants also emphasized their knowledge of other social networking apps in general and previous invite-only social networking websites the market is limited. This limitation also arose from another limitation, our focus on the German market. The perspectives from other markets that have additional invite-only social networking apps would give a stronger in-depth understanding of the phenomenon which we excluded from this research study.

Lastly, another limitation regarding our findings refers to the initial adoption as the distinction of the initial phase from the overall adoption derived to be a blurry line which also turned out to be specific to the individual users’ perception. Therefore, it could not strictly be defined when exactly the initial phase ended. However, we were stressing the initial phase as the execution to receive an invitation to enter the app and the first times usage to try out the app. Therefore, we are convinced that we gained sufficient insights regarding the initial adoption phase. Further on, as the initial adoption is before the actual adoption phase where companies acquire value in the long run due to the established customer relationship, our derived framework is limited. In that case, it shows important antecedents on the initial adoption, however, we are aware that other antecedents will occur when striving for the overall adoption. This would go beyond our research that is worth investigating in the future. Nevertheless, we are convinced that although our framework is limited regarding the full phases of adoption, it is indeed a significant outcome that needs to be considered before discussing the next step for adoption.

7 Future Research Directions

______In this chapter, we will outline directions for future research. These would enhance the understanding and should be carried out to deepen the knowledge in the field.

Although we investigated our research purpose in-depth whereas new knowledge was created, we identified some gaps that we argue are worth investigating in the future. Therefore, we will highlight future research directions that derived from our general research, our findings, and analysis, but also our above-mentioned limitations.

To begin with, our research is based on the German market including the perspective from German users, hence it would be interesting to investigate the same setting on a different market. Aligned with the German market, we included social networking apps using an invite-only strategy that were known by the German users, however, if going beyond the German market, it would be essential to include other types of social-networking apps based on the invite-only strategy as well.

Secondly, since we conducted a qualitative study, future research should confirm the generated findings by applying a quantitative study to approach a higher generalization with larger sample size. This would enhance the confirmability and dependability of the proposed framework.

Thirdly, we investigated the social networking space, however, future research could enhance the apps beyond social networks, for example including other forms of social media whereas information broadcasting rather than just communication becomes crucial. Also, other types of apps, such as lifestyle apps, for example fashion are worth researching to see whether the impact factors on the initial adoption based on the invite- only strategy changes.

Fourthly, although we investigated the initial adoption, we cannot equalize this stage with the actual adoption. Especially, because some users who initially adopted did not transform to the adopter, instead they rejected it. Therefore, it would be worth

investigating the influences that lead to further adoption which goes beyond the antecedents of the initial adoption as answered by this study.

Lastly, the aspect of data security and the implications for policymakers should be considered in further studies. As explained in the social implications, closed social networks using an invite-only technique are not accessible to the public. These issues arising with creating a closed form of social networking app should be further studied. Furthermore, the impact on the user adoption behavior as well as the general social implications should be a topic of future research.

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9 Appendix

9.1 Interview Guide

Interview Guide – Initial Adoption of Invite-Only Social Networking Apps

Note: Questions were asked in the flow of the conversation, other related questions might have been asked as a reaction to the answers of the participants. Sub-questions are potential questions to create a more in-depth understanding of the participants view and were asked in accordance, and only if necessary, in the context of the conversation. The main purpose of the questions was to engage the participants and motivate them to state their opinions on the topic.

SN= social networks General Information: - Introduction interviewer + observer - Research Scope: Master thesis study - Note: privacy policy and recording (information provided before interview) - Note: Interviewee can stop interview at any time - Note: data will be treated anonymously (no conclusions about person possible) and recordings will not be passed on to 3rd parties - Address free speaking of opinion

Demographic information: - Age, gender, occupation

Introduction - mobile phone usage behavior. 1. Today we will deal with the topic of social networking apps. For this, can you describe which mobile phone you have and how often and for what you use it?

Part 1 - Experience with social networking apps 1. Do you use social networks? Explain: by this we mean not only social media, but social networks that are used to connect people. a. How much time do you spend on social networking apps? b. What social networking apps are you active on and for what purposes? 2. Could you please describe yourself as a social networking app user? 3. Can you describe your behavior on social networking apps for us? a. Are you more passive or active on social networking apps?

9.2 Coding Overview

Initial Code Re-Code Sub-Category Category Euphoria for Invitation Excitement for Invitation Desire for the Invitation Artificial Scarcity Euphoria for Usage Excitement for Invitation Desire for the Invitation Artificial Scarcity Feeling Inspired Excitement for Invitation Desire for the Invitation Artificial Scarcity Happiness for Invitation Excitement for Invitation Desire for the Invitation Artificial Scarcity Positive Reaction To Invitation Excitement for Invitation Desire for the Invitation Artificial Scarcity Quality Requirement because of Invitation Excitement for Invitation Desire for the Invitation Artificial Scarcity Reserved Reaction to Invitation Excitement for Invitation Desire for the Invitation Artificial Scarcity Invitation Request Invitation Request Desire for the Invitation Artificial Scarcity Pre-knowledge about Invitation Invitation Request Desire for the Invitation Artificial Scarcity Process of Initital Adoption Invitation Request Desire for the Invitation Artificial Scarcity Feeling of Obligation/Invitation Perceived Obligation Desire for the Invitation Artificial Scarcity Feeling of Obligation/Participation Perceived Obligation Desire for the Invitation Artificial Scarcity Access Barrier Invitation Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Application Model Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Concern Invitation All Apps Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Exclusion Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Feeling of Disaffiliation Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Invitation as negative Entry Barrier Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Unfair Concept of Invitation Initial Barrier by Invitation Limitation of Invitation Artificial Scarcity Decreased Feeling of Hype after Adoption Simulated Shortage Limitation of Invitation Artificial Scarcity Doubt of Exclusivity Simulated Shortage Limitation of Invitation Artificial Scarcity Feeling of Simulated Shortage Simulated Shortage Limitation of Invitation Artificial Scarcity Feeling of Unlimited Invites Simulated Shortage Limitation of Invitation Artificial Scarcity Negative Perception of Many New Entrants Simulated Shortage Limitation of Invitation Artificial Scarcity Privacy Simulated Shortage Limitation of Invitation Artificial Scarcity Content Expectation Community Affiliation Community Perception Closed Network Further Invitation Distribution Community Affiliation Community Perception Closed Network Initial Community Perception Compared to ON Community Affiliation Community Perception Closed Network Initial Perception Community Affiliation Community Perception Closed Network Privacy Worse on Closed SN Community Affiliation Community Perception Closed Network Difference O/C Elite Community Perception Community Perception Closed Network Exclusion Elite Community Perception Community Perception Closed Network Exclusive Invitation Elite Community Perception Community Perception Closed Network Closed SN Adoption Examples Like-Minded Community Community Perception Closed Network Initial Community Perception Compared to ON Like-Minded Community Community Perception Closed Network Like-minded Community Like-Minded Community Community Perception Closed Network Negative Perception of Content Like-Minded Community Community Perception Closed Network Feeling of Elite/Invitation Initial Exclusivity Perceived Exclusivity Closed Network

Initial Code Re-Code Sub-Category Category Initial Exclusivity Initial Exclusivity Perceived Exclusivity Closed Network Private and Exclusive Initial Exclusivity Perceived Exclusivity Closed Network USP Initial Exclusivity Perceived Exclusivity Closed Network Elite Community Perceived Privilege Perceived Exclusivity Closed Network Initial Privilege Perceived Privilege Perceived Exclusivity Closed Network Perception CN Perceived Privilege Perceived Exclusivity Closed Network Prestige Perceived Privilege Perceived Exclusivity Closed Network Pretended Exclusivity Suspicion of Exclusivity Perceived Exclusivity Closed Network Purpose-Driven Suspicion of Exclusivity Perceived Exclusivity Closed Network Fear of Missing Out Curiosity Fear of Missing Out Social Influence Interaction with Close People Curiosity Fear of Missing Out Social Influence Usage Motivation Curiosity Fear of Missing Out Social Influence Desire of the Unreachable Desire of the Unreachable Fear of Missing Out Social Influence Desire to be First Mover Desire of the Unreachable Fear of Missing Out Social Influence Suspicion of Initial Hype Desire of the Unreachable Fear of Missing Out Social Influence Going with the Trend Initial Hype Impact by Others Social Influence Initial Hype Initial Hype Impact by Others Social Influence initial WOM Initial Hype Impact by Others Social Influence Negative Perception of Many New Entrants Initial Hype Impact by Others Social Influence Usage Motivation Initial Hype Impact by Others Social Influence Waiting for App to Establish Initial Hype Impact by Others Social Influence Exclusive Invitation Proximity to Inviter Impact by Others Social Influence Further Invitation Distribution Proximity to Inviter Impact by Others Social Influence Invitation by Inspiring Person Proximity to Inviter Impact by Others Social Influence Invite by Like-Minded People Proximity to Inviter Impact by Others Social Influence Invited by Close Person Proximity to Inviter Impact by Others Social Influence Negative Adoption Proximity to Inviter Impact by Others Social Influence Process of Initital Adoption Proximity to Inviter Impact by Others Social Influence Inital Knowledge about App to Accept Invitation App Purpose Contributing Factors Contributing Factors New App Requirements App Purpose Contributing Factors Contributing Factors Covid-19 Covid-19 Pandemic Contributing Factors Contributing Factors Firm Perception Compared to ON Perception of Companies Contributing Factors Contributing Factors Late Entry of Companies Perception of Companies Contributing Factors Contributing Factors Positive Firm Communication Perception of Companies Contributing Factors Contributing Factors Positive Firm Perception Perception of Companies Contributing Factors Contributing Factors Type of Person from Company Perception of Companies Contributing Factors Contributing Factors Desire Created by Media Sources of Attention Contributing Factors Contributing Factors Attention from Social Circle Sources of Attention Contributing Factors Contributing Factors

9.3 GDPR Consent Form