Purpose: This paper aims to explore how digital technologies have forced small- to medium-sized enterprises (SMEs) to reconsider and experiment with their business models (BMs) and how this contributes to their innovativeness and performance. Design/methodology/approach: An empirical study has been conducted on 338 European SMEs actively using social media and big data to innovate their BMs. Four in-depth case studies of companies involved in BM innovation have also been carried out. Findings: Findings show that the use of social media and big data in BMI is mainly driven by strategic and innovation-related internal motives. External technology turbulence plays a role too. BMI driven by social media and big data has a positive impact on business performance. Analysis of the case studies shows that BM is driven by big data rather than by social media. Research limitations/implications: Research into big data- and social media-driven BMs needs more insight into how components are affected and how SMEs are experimenting with adjusting their BMs, specifically in terms of human and organizational factors. Practical implications: Findings of this study can be used by managers and top-level executives to better understand how firms experiment with BMI, what affects business model components and how implementation might affect BMI performance. Originality/value: This paper is one of the first research contributions to analyse the impact of digitalization, specifically the impact of social media and big data on a large number of European SMEs.