How Hugging Face’s Investor Spots Winners

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Bet on founders who understand the technology, because their first idea probably won’t be the one that sticks.

That’s the view of Matt Hartman, founder and managing partner of Factorial Capital. In 2016, as a partner at Betaworks, Hartman was part of the team that wrote the first check into Hugging Face, which was then a chatbot app for teenagers. Today it’s the largest hub for open-source AI, and Nvidia has agreed to buy it for about $13 billion.

On this week’s episode of The Every Podcast, Hartman tells Natalia Quintero how backing Hugging Face shaped his investment thesis, how Factorial grew into a “family tree” of technical founders who help him scout deals, and why vibe-coding his own app gave him a new respect for SaaS.

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Links to resources mentioned in the episode:

Factorial Capital: https://factorialcap.com

Ghost Pepper, Matt's open-source voice-to-text app: https://github.com/matthartman/ghost-pepper

Superpowers, Jesse Vincent's skill for Claude Code: https://github.com/obra/superpowers

Hugging Face: https://huggingface.co

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Follow Natalia Quintero: https://x.com/NataliaZarina

Follow Matt Hartman: https://x.com/MattHartman

0:00 Introduction
5:06 How Hugging Face went from a teen chatbot to the home of open-source AI
9:52 The three decisions that set Hugging Face on its path
12:49 Hartman’s approach to finding the newly technically possible
18:10 Why Hartman backs technical founders
21:10 How Factorial’s portfolio founders source its next deals
27:09 Why faster iteration makes product insight the most valuable skill
34:28 What Hartman learned building Ghost Pepper, an open-source voice-to-text app
40:02 Hartman’s current theses, from non-language models to full-stack AI apps
44:14 Why the best founders right now are experimenting