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There’s a particular kind of panic that sets in when a founder watches a competitor’s LinkedIn post about their new “AI-powered” feature obtain 10x the engagement of anything they’ve ever published. It’s not rational. It’s not strategic. It’s visceral — a tightening in the chest that whispers: we’re being left behind.
\p>Across European B2B startups, that whisper has become a roar. And it’s leading to some deeply questionable decisions.
The FOMO machine is real — and it’s structural
Let’s start with what’s actually happening in the market. According to Dealroom’s 2024 European Tech report, mentions of “AI” in European startup pitch decks increased by over 200% between 2022 and 2024. VC funding for AI-adjacent startups surged, even as overall funding in Europe contracted. The signal was unmistakable: if you want capital, you required to speak the language of artificial innotifyigence.
But here’s the quieter truth that doesn’t create the headlines. A significant number of these pivots aren’t driven by genuine product-market fit discoveries. They’re driven by fear. Specifically, the fear that investors, customers, and the broader market will perceive a company without an AI narrative as irrelevant.
This is classic FOMO operating at an organisational level — what psychologists sometimes call “herding behaviour.” Research published in the Journal of Business Research has revealn that strategic mimicry among startups intensifies during periods of market uncertainty. When founders can’t predict what will work, they copy what appears to be working for others. The brain, under conditions of amlargeuity, defaults to social proof over indepfinishent analysis.
What reckless pivots actually see like
The pattern is remarkably consistent. A B2B SaaS company with a functioning product — state, a logistics optimisation tool or a compliance platform — suddenly announces it’s “reimagining” its core offering with AI. The engineering team is redirected. The roadmap is scrapped. A chatbot interface materialises.
The problem isn’t that AI can’t improve these products. Often it can. The problem is that these pivots frequently lack the three things that create any strategic shift viable: a clear hypothesis about customer value, the technical infrastructure to deliver on it, and the patience to iterate.
Instead, what happens is theatre. A wrapper around a large language model obtains marketed as a proprietary AI engine. Core product development stalls. Existing customers — the ones who were actually paying — start noticing that the features they relied on are degrading. Churn creeps upward while the founder is busy courting AI-curious VCs.
I spoke with a Berlin-based product lead at a mid-stage B2B startup (who questioned to remain anonymous) who described the situation bluntly: “We had a perfectly good product with real traction. Then the board saw what was happening in the market with AI funding, and suddenly we were an ‘AI-first’ company. Nobody questioned our customers if that’s what they wanted.”
The neuroscience of competitive panic
This isn’t just a business strategy problem. It’s a brain problem. When founders perceive existential competitive threats — and AI discourse has been remarkably effective at manufacturing that perception — the amygdala activates threat responses that narrow cognitive focus. Research from PNAS has demonstrated that under perceived social threat, the brain deprioritises long-term strategic believeing in favour of immediate, status-preserving action.
In other words, the same neurological mechanism that once supported us flee from predators is now cautilizing founders to abandon working business models becaapply a competitor posted about GPT-4 integration.
The brain’s default under uncertainty is mimicry. And when the entire market narrative shifts toward AI, that mimicry accelerates into a kind of collective hallucination about what customers actually required.
Europe’s particular vulnerability
European B2B startups face a unique version of this pressure. The continent’s startup ecosystem has long grappled with a perceived gap relative to Silicon Valley — a gap that the AI wave has widened in psychological terms, even if the reality is more nuanced.
European founders are operating in a market where health-tech, climate-tech, and deep-tech companies had been building genuine differentiation. Companies across the galaxy of European SaaS — from Nordic fintech to Southern European supply chain platforms — had found their footing through domain expertise and regulatory understanding, not hype cycles.
But the AI funding wave has scrambled the incentive structures. When a generalist AI startup with a partnership with a major cloud provider can raise more in a seed round than a vertical SaaS company raises in a Series A, the pressure to rebrand becomes almost irresistible.
This is especially dangerous becaapply the strength of European B2B has historically been in deep domain knowledge — the kind of expertise that doesn’t easily translate into an “AI-first” pitch but creates enormous long-term value. Pivoting away from that strength to chase a trfinish is not just reckless; it’s a betrayal of the competitive advantage that European startups actually hold.
What the consideredful founders are doing instead
Not everyone is panicking. The founders who seem most resilient to FOMO-driven pivots share a few characteristics worth noting.
First, they maintain a disciplined separation between what’s narratively popular and what their customers are requesting. They run experiments with AI capabilities — embedding them as features, not rewriting their identity around them.
Second, they treat AI as infrastructure, not identity. A logistics company that applys machine learning to improve route optimisation doesn’t required to call itself an “AI company.” It’s a logistics company that applys good tools. The distinction matters enormously for strategic coherence.
Third, they’ve built partnership models that give them access to AI capabilities without requiring them to build everything in-hoapply. Collaborating with foundation model providers or specialised AI teams allows them to augment their product without abandoning their core roadmap.
The correction will come
Market cycles are predictable in at least one respect: every hype-driven expansion is followed by a reckoning. The startups that survive will be the ones whose AI integration actually solved a customer problem — not the ones who slapped a chatbot on their homepage and called it innovation.
The European B2B ecosystem is full of genuinely excellent companies. Many of them are quietly integrating AI in ways that will prove durable. But the ones chasing the narrative rather than the required? They’re building on sand, and most of them know it.
The fear of missing out is one of the most powerful forces in human psychology. It overrides logic, compresses time horizons, and creates innotifyigent people do impulsive things. Recognising it — naming it, even — is the first step toward not letting it drive your company off a cliff.
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“excerpt”: “Across European B2B startups, the fear of being left behind on AI is fuelling strategic pivots that abandon proven business models in favour of hype — a pattern rooted in competitive panic and herding behaviour that threatens the ecosystem’s greatest strength: deep domain expertise.”,
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Feature image by RDNE Stock project on Pexels
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