"The Cognitive Revolution" | AI Builders, Researchers, and Live Player Analysis

How Hugging Face raised $235M

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Aug 31, 2023

A deep dive into Hugging Face's recent $235 million fundraising sheds light on its valuation and community-driven approach. The hosts explore the challenges of scaling online communities while maintaining engagement and utility. They contrast Hugging Face's strategies with competitors like Replit and Runway, discussing the significance of user retention and content curation. Additionally, insights into the evolving landscape of machine learning tools highlight the balance between open-source principles and monetization.

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INSIGHT

Community Defensibility

Online communities alone are not defensible and can quickly shift.
To create defensibility, encourage users to create valuable data and connections, increasing switching costs.

ANECDOTE

Digg vs. Reddit

Digg, once a dominant online community, lost users to Reddit due to user dissatisfaction.
This highlights the vulnerability of communities lacking user-generated value and lock-in.

ADVICE

Leveraging Community Data

Community-driven businesses should leverage their community to generate valuable data.
This data should make the website valuable independent of daily user activity, increasing stickiness.

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In this episode, Nathan and Erik sit down to analyze Hugging Face in light of its recent $235M Series D round. They analyze Hugging Face’s community and defensibility through the lens of other community businesses like ProductHunt and Yelp, assess its ability to fulfill its $4.5 billion valuation, and assess competitors and other notable companies in the space like Replit, Character, and Runway. If you're looking for an ERP platform, check out our sponsor, NetSuite: http://netsuite.com/cognitive

We're hiring across the board at Turpentine and for Erik's personal team on other projects he's incubating. He's hiring a Chief of Staff, EA, Head of Special Projects, Investment Associate, and more. For a list of JDs, check out: eriktorenberg.com.

TIMESTAMPS:

(00:00:57) Episode Preview

(00:01:52) Nathan’s Introduction

(00:04:57) Overview of Hugging Face and recent fundraising announcement

(00:08:13) Hugging Face’s product line

(00:16:47) Sponsors: Netsuite | Omneky

(00:18:36) Community driven businesses and HuggingFace’s moat

(00:23:23) Discovery and inference

(00:28:04) Hugging Face’s ideological nature

(00:31:31) Curation is key

(00:33:46) Keeping content fresh when AI moves so fast

(00:35:44) If Hugging Face is a $50 billion company one day, what would it look like?

(00:48:08) Hugging Face vs Replit

(00:57:19) Contrasting Hugging Face with other companies like Character and Runway

LINKS MENTIONED:

Hugging Face's LLM leaderboard

X/TWITTER:

@labenz (Nathan)

@eriktorenberg

@CogRev_Podcast

SPONSORS: Shopify | NetSuite | Omneky

Shopify is the global commerce platform that helps you sell at every stage of your business. Shopify powers 10% of ALL eCommerce in the US. And Shopify's the global force behind Allbirds, Rothy's, and Brooklinen, and 1,000,000s of other entrepreneurs across 175 countries.From their all-in-one e-commerce platform, to their in-person POS system – wherever and whatever you're selling, Shopify's got you covered. With free Shopify Magic, sell more with less effort by whipping up captivating content that converts – from blog posts to product descriptions using AI. Sign up for $1/month trial period: https://shopify.com/cognitive

NetSuite has 25 years of providing financial software for all your business needs. More than 36,000 businesses have already upgraded to NetSuite by Oracle, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ head to NetSuite: http://netsuite.com/cognitive and download your own customized KPI checklist.

Omneky is an omnichannel creative generation platform that lets you launch hundreds of thousands of ad iterations that actually work customized across all platforms, with a click of a button. Omneky combines generative AI and real-time advertising data. Mention "Cog Rev" for 10% off.

Music Credit: GoogleLM