This study examines online meme-investing communities as emergent sources of outsider innovation. Using an abductive qualitative design to analyze 41 interviews with meme community members and 33,700 forum posts, we identify five core dynamics: (1) outsider identity, (2) digital affordances, (3) memetic coordination, (4) distributed learning, and (5) market disruption. These dynamics are integrated into a process model of outsider financial innovation, organized around three phases: enabling conditions, coordination mechanisms, and innovation outcomes. Our findings challenge traditional innovation frameworks that prioritize formal institutions by showing how grassroots, digitally coordinated communities can introduce new financial processes and forms of market participation. In the model, a shared outsider identity binds community members to a countercultural mission that challenges traditional market norms. Digital platforms enable the rapid dissemination of memetic content, which community members use as a Schelling-point coordination device for collective investment decisions. Distributed learning processes, meanwhile, allow participants to share knowledge and expertise, gradually professionalizing their strategies. These factors together precipitate episodes of market disruption, as seen in recent meme asset rallies that defy conventional valuation logic. The study contributes to innovation theory by introducing the concept of outsider financial innovation, extending user-driven innovation models to financial markets. We define the two types of innovation documented, process innovation (novel coordination mechanisms) and social innovation (new forms of collective market participation), and distinguish them from traditional product-level financial innovation. Practical policy implications include recognizing digitally mediated investor communities as significant market actors that require updated regulatory frameworks, as well as addressing the systemic risks these communities pose to financial stability.
Lennart Ante (Mon,) studied this question.