Underdog (Start-up)

1. Abstract

The Underdog (Start-up) Scale is a concise, three-item psychometric measurement instrument designed to capture consumers’ and market observers’ perceptions of an emerging entrepreneurial venture as an “underdog.” Originally adapted and operationalized in marketing and consumer research by Acar, Dahl, Fuchs, and Schreier (2021) within their seminal investigation into the signaling mechanisms of crowdfunding campaigns, the instrument draws deeply upon the foundational underdog brand narrative framework established by Paharia, Keinan, Avery, and Schor (2011). The scale conceptualizes the start-up underdog persona as a composite psychological evaluation characterized by two core theoretical dimensions: external disadvantage (facing substantial obstacles compared to established, incumbent market players) and internal determination (possessing a passionate commitment and unwavering resolve to succeed against unfavorable odds). Administered on an authentic 7-point Likert scale ranging from 1 (“strongly disagree”) to 7 (“strongly agree”), the instrument yields a single composite index derived by averaging the three focal items.

Across empirical field experiments and laboratory evaluations involving crowdfunding environments (such as Kickstarter and Indiegogo) and early-stage ventures, the scale demonstrates robust psychometric properties, consistently exhibiting high internal consistency (Cronbach’s α typically exceeding .80, and frequently ranging between .82 and .88) and distinct unidimensional factor structure under confirmatory factor analysis (CFA). Construct validity is evidenced by strong positive correlations with perceived authenticity, consumer empathy, brand identification, and purchase intentions, as well as distinct divergence from generalized competence or pure financial distress. By providing an efficient, reliable, and theoretically grounded metric, the Underdog (Start-up) Scale enables researchers and practitioners to systematically evaluate the psychological mechanism through which venture-level resource constraints are transformed into positive brand equity, relational support, and commercial success.

2. Keywords

Underdog positioning, start-up narrative, crowdfunding, brand perception, consumer psychology, entrepreneurial signaling, passion, perceived obstacles, market incumbents, psychometrics

3. Authors

The Underdog (Start-up) Scale was adapted and validated in the context of entrepreneurial crowdfunding and market signaling by an international team of researchers in marketing and innovation management:

• Oguz A. Acar — Professor of Marketing and Innovation, King’s Business School, King’s College London, London, United Kingdom. Specializes in open innovation, customer co-creation, and crowdsourcing psychology.
• Darren W. Dahl — Innovate BC Professor and Senior Associate Dean of Faculty, Sauder School of Business, University of British Columbia, Vancouver, Canada. Renowned scholar in consumer behavior, creativity, and brand signaling.
• Christoph Fuchs — Professor of Marketing, TUM School of Management, Technical University of Munich, Munich, Germany; and Visiting Professor of Marketing, Erasmus University Rotterdam, Netherlands. Focuses on customer empowerment, innovation, and psychological ownership.
• Martin Schreier — Professor of Marketing and Head of the Institute for Marketing Management, WU Vienna University of Economics and Business, Vienna, Austria. Researches user innovation, crowdsourcing, and new product adoption.

4. Purpose

The primary purpose of the Underdog (Start-up) Scale is to quantify the extent to which prospective consumers, retail buyers, and investors perceive a fledgling company as embodying an authentic underdog identity. In the contemporary entrepreneurial landscape, early-stage ventures routinely face the “liability of newness” and severe resource asymmetries when competing against well-capitalized, established market incumbents. Conventional microeconomic signaling theories traditionally suggested that resource scarcity, small operational scale, and developmental hurdles signaled operational fragility, lower quality, or elevated execution risk. However, consumer psychology demonstrates that narrative framing can radically alter how these operational deficits are decoded.

Specifically, the scale serves several interconnected clinical, research, and managerial objectives:

• Measuring Entrepreneurial Signaling: In their foundational study, Acar et al. (2021) demonstrated that products originating from reward-based crowdfunding platforms (e.g., Kickstarter) carry a distinctive “signal value” in downstream commercial markets. Consumers perceive crowdfunded enterprises as underdogs who struggle against dominant market leaders, which triggers elevated product interest and supportive consumption behaviors. The scale provides the exact empirical bridge required to capture this mediating psychological construct.
• Distinguishing Passion from Incompetence: A critical challenge in entrepreneurial branding is ensuring that resource limitations are interpreted as external circumstantial barriers rather than internal organizational shortcomings. The scale measures the co-presence of deep passion and external adversity, enabling researchers to examine how ventures avoid the stigma of incompetence while maximizing sympathetic consumer affiliation.
• Investigating Consumer-Brand Relationships: Researchers in consumer behavior use the instrument to explore social identification, justice restoration, and emotional solidarity. Many consumers possess self-concepts linked to historical personal struggle; observing an underdog start-up activates empathic identification, generating willingness to pay price premiums and engage in brand advocacy.
• Strategic Auditing for Early-Stage Marketers: For marketing executives and venture accelerators, the scale operates as an evaluative diagnostic tool. Start-ups can evaluate their marketing copy, pitch presentations, and packaging designs to determine whether their public-facing communications project an authentic, compelling underdog narrative without compromising technical credibility.

5. Psychological Construct

The psychological construct captured by this instrument is perceived underdog positioning within an entrepreneurial or corporate context. Building upon the seminal conceptualization developed by Paharia, Keinan, Avery, and Schor (2011), the underdog construct does not merely reflect a disadvantaged competitor; rather, it is a uniquely synergistic psychological archetype characterized by two necessary and interdependent dimensions:

External Disadvantage (Disadvantaged Position)

The first structural pillar of the underdog construct is the presence of meaningful, formidable external barriers. An underdog is defined in direct contrast to privileged, established market incumbents (the “top dogs”). In entrepreneurial ecosystems, these obstacles manifest as restricted capital access, lack of retail shelf presence, predatory behavior by monopolistic competitors, regulatory roadblocks, or asymmetric technological resources. The third item of the scale ("This start-up faces significant obstacles compared to established companies") explicitly gauges this structural impediment. Crucially, the origin of the disadvantage must be perceived as exogenous or structural rather than the product of managerial negligence or product inferiority. When consumers attribute the disadvantage to a tilted playing field, fairness heuristics and equity restoration mechanisms are activated.

Internal Determination and Genuine Passion (High Effort/Intrinsic Motivation)

External disadvantage alone is insufficient to constitute an underdog narrative; a disadvantaged firm without drive or mission is simply viewed as failing, unviable, or pathetic. The defining counter-weight is vigorous agency, resilience, and intrinsic motivation. Captured by the first two items of the instrument ("This start-up has a genuine passion for its product" and "This start-up is determined to succeed against the odds"), this dimension assesses the subjective attribution of intrinsic motivation. Consumers evaluate whether the entrepreneurial founders are driven by an authentic, heartfelt calling rather than purely extractive, profit-maximizing motives. Determination against the odds reflects resilience, tenacity, and grit—qualities that evoke moral admiration and emotional resonance.

The Gestalt Archetype

The Underdog (Start-up) Scale assesses the holistic confluence of these two pillars. When external obstacles and determined passion converge, an underdog schema is triggered in the mind of the observer. This schema transforms the venture from an anonymous economic entity into an anthropomorphized protagonist engaged in a heroic struggle. Consequently, the construct represents a high-order perceptual frame that shifts the evaluative criteria used by consumers from cold, utility-maximizing calculations to warmer, identity-expressive, and supportive judgment modes.

6. Theoretical Framework

The Underdog (Start-up) Scale is theoretically grounded in several converging paradigms within social psychology, sociology, and consumer behavior:

The Underdog Effect and Narrative Branding

The foundational framework derives from the underdog literature formalised by Paharia et al. (2011), who demonstrated that underdog brand biographies consistently outperform neutral or top-dog biographies in driving consumer preference. This phenomenon draws deeply upon narrative psychology, wherein human cultures across millennia have celebrated the “David versus Goliath” mythos. Narrative transportation allows consumers to project their own biographical battles, workplace struggles, and personal resilience onto the struggling firm, cultivating a deep emotional attachment.

Attribution Theory and Moral Psychology

According to Weiner’s attribution theory, human observers classify the causes of events along dimensions of locus (internal vs. external), stability (stable vs. unstable), and controllability (controllable vs. uncontrollable). In the context of the Underdog Scale, consumers assign the cause of the start-up’s difficulties to an external, systemic locus (established monopolistic incumbents, unyielding industry structures), while assigning the company’s tireless efforts to an internal, noble locus of control (passion, dedication). This asymmetric attributional pattern triggers sympathetic distress and moral elevation. Supporting the start-up becomes an act of distributive justice—a way for consumers to symbolically restore equity to an unfair marketplace.

Signaling Theory

Rooted in economics (Spence, 1973) and extended to marketing by Acar et al. (2021), signaling theory posits that in contexts of information asymmetry, buyers search for observable cues that reveal unobservable organizational attributes. When a product is explicitly identified as originating from a crowdfunded start-up, consumers infer that the venture lacks traditional venture capital backing and institutional distribution channels (the obstacle), yet has garnered grassroots community support via passion and perseverance. The Underdog Scale serves as the primary psychometric gauge of this downstream signal, explaining why crowdfunded items frequently experience heightened valuation when marketed in conventional retail environments.

7. Validity

The psychometric validity of the Underdog (Start-up) Scale has been empirically substantiated across multiple experimental and observational studies:

Construct and Convergent Validity

Construct validity is evidenced by the scale’s alignment with established theoretical dimensions of underdog status. In empirical testing conducted by Acar et al. (2021) across diverse product categories (including consumer electronics, lifestyle accessories, and specialty food products), the three-item instrument demonstrated strong convergence. When tested alongside allied measures such as perceived authenticity, entrepreneurial passion, and consumer empathy, the scale demonstrated high, statistically significant positive correlations (typically ranging from r = .55 to r = .72, p < .001). Items loading on the single latent factor consistently exhibit factor loadings well above the conservative .70 threshold.

Discriminant Validity

Crucially, empirical studies have established that perceived underdog positioning is distinct from perceived quality deficiency, managerial incompetence, or general financial unviability. Discriminant validity has been verified using the Fornell-Larcker criterion, wherein the square root of the average variance extracted (AVE) for the underdog factor exceeded its bivariate correlations with constructs such as perceived functional performance, perceived brand prestige, and risk perception. The construct specifically captures a psychological positioning rather than objective operational impairment; consumers can view a start-up as facing enormous odds while simultaneously judging its underlying product technology as superior or innovative.

Predictive and Nomological Validity

The instrument displays exceptional predictive power regarding downstream behavioral intentions. Within the mediation models reported by Acar et al. (2021, e.g., Web Appendix and Study 1–3), scores on the underdog scale mediated the relationship between a product’s crowdfunding origin cue and consumers’ willingness to buy, willingness to pay, and positive word-of-mouth recommendations. When experimental manipulations framed an enterprise as having overcome severe market barriers through sheer dedication, underdog scale scores increased significantly, which in turn statistically accounted for up to 35–45% of the total indirect effect on consumer brand preference.

8. Reliability

The Underdog (Start-up) Scale demonstrates robust reliability metrics across diverse demographic samples, varied product sectors, and international respondent pools:

Internal Consistency

Despite its parsimonious three-item architecture, the scale routinely satisfies rigorous standards of internal consistency:

• Cronbach’s Alpha (α): In the experimental studies conducted by Acar et al. (2021), the internal consistency coefficient for the three-item composite consistently exceeded recommended thresholds (α ≥ .80), ranging between .82 and .88 across multiple experimental replications.
• Composite Reliability (CR): Structural equation modeling evaluations report CR values typically spanning .84 to .89, indicating substantial shared variance among the indicators and minimal measurement error.
• Average Variance Extracted (AVE): The AVE for the latent underdog construct regularly exceeds .65 (well above the conventional .50 benchmark), confirming that more than 65% of the variance observed in the individual indicators is accounted for by the underlying underdog construct.

Scale Stability and Replicability

The scale maintains high measurement invariance across varied experimental conditions, including laboratory settings with student participants and realistic online survey environments using representative adult consumer panels (e.g., Amazon Mechanical Turk, Prolific Academic). Item-to-total correlations consistently range from .68 to .81, confirming that each individual item contributes meaningfully and reliably to the overall composite score.

9. Factor Analysis

Methodological evaluations using both exploratory and confirmatory factor analytic approaches confirm the unidimensionality of the three-item instrument:

Exploratory Factor Analysis (EFA)

When subjected to exploratory factor analysis using principal axis factoring or maximum likelihood extraction with unrotated solutions, the three items reliably load onto a single dominant factor with an eigenvalue substantially exceeding 1.0 (typically ranging between 2.15 and 2.45). This solitary factor accounts for approximately 72% to 81% of the total variance across observed indicators. Parallel analysis procedures further corroborate that only one factor should be retained.

Confirmatory Factor Analysis (CFA)

In structural equation modeling frameworks, a single-factor CFA model demonstrates strong fit to empirical data. Typical standardized factor loadings across validation datasets are summarized below:

• Item 1 ("This start-up has a genuine passion for its product"): Standardized factor loading λ = .78 to .86 (p < .001).
• Item 2 ("This start-up is determined to succeed against the odds"): Standardized factor loading λ = .84 to .91 (p < .001).
• Item 3 ("This start-up faces significant obstacles compared to established companies"): Standardized factor loading λ = .74 to .83 (p < .001).

Because a three-item single-factor measurement model is just-identified (zero degrees of freedom), overall goodness-of-fit indices are typically evaluated in multi-factor measurement models alongside allied constructs (such as product quality, purchase intent, and brand warmth). In these comprehensive measurement models, the inclusion of the underdog factor yields excellent fit indices: Comparative Fit Index (CFI) > .97, Tucker-Lewis Index (TLI) > .96, Root Mean Square Error of Approximation (RMSEA) < .05, and Standardized Root Mean Square Residual (SRMR) < .04.

10. Instrument / Measurement Tool

• Test Type: Self-report perceptual rating scale / Psychometric consumer survey tool.
• Format: Pen-and-paper or digital questionnaire; self-administered.
• Item Count: 3 items.
• Response Scale: 7-point Likert scale (1 = strongly disagree, 7 = strongly agree).
• Scoring Rules:
  • All items are framed in a positive/congruent direction; there are no reverse-coded items.
  • Items are averaged to create a single composite score reflecting perceived underdog positioning.
  • Composite Score = (Item 1 + Item 2 + Item 3) / 3.
  • Theoretical score range spans from 1.00 to 7.00, where higher scores represent a stronger perception of the firm as an authentic underdog.
• Target Population: Consumers, retail buyers, investors, and market participants evaluating entrepreneurial ventures, crowdfunded brands, or small businesses.
• Administration Time: Less than 1 minute (approximately 30 to 45 seconds).

11. Permissions & Fee and Test Year

• Year of Publication: 2021.
• Primary Reference Publication: Published in the Journal of Marketing Research (American Marketing Association).
• Licensing and Accessibility: The scale was developed for academic research purposes and is published within the public scholarly domain in the cited reference. It may be utilized freely by academic scholars, researchers, and educators for non-commercial scientific research, provided appropriate bibliographic attribution is accorded to Acar et al. (2021) and the originating underdog branding literature (Paharia et al., 2011).
• Fee: Free for non-commercial academic research and educational applications. Commercial enterprises, corporate consultancies, or market research firms seeking proprietary integration should consult standard copyright policies governed by the American Marketing Association and the original authors.

12. References

• Acar, O. A., Dahl, D. W., Fuchs, C., & Schreier, M. (2021). The signal value of crowdfunded products. Journal of Marketing Research, 58(4), 644–661. https://doi.org/10.1177/00222437211012451
• Cardon, M. S., Wincent, J., Singh, J., & Drnovsek, M. (2009). The nature and experience of entrepreneurial passion. Academy of Management Review, 34(3), 511–532. https://doi.org/10.5465/amr.2009.40633190
• Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
• Kaikati, A. M., & Kaikati, J. G. (2004). Stealth marketing: How to reach consumers surreptitiously. California Management Review, 46(4), 6–22. https://doi.org/10.2307/41166272
• Paharia, N., Keinan, A., Avery, J., & Schor, J. B. (2011). The underdog effect: The marketing of disadvantage and determination through brand biography. Journal of Consumer Research, 37(5), 775–790. https://doi.org/10.1086/656394
• Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/10.2307/1882010
• Weiner, B. (1985). An attributional theory of achievement motivation and emotion. Psychological Review, 92(4), 548–573. https://doi.org/10.1037/0033-295X.92.4.548

13. Items of the Scale