Saw the shift, missed it: Borthwick on Hugging Face and Poncho

Key points

Key takeaways from a How I Invest with David Weisburd interview with John Borthwick, founder and CEO of betaworks (October 2026):

An AI-friend bet before it was plausible. Hugging Face's version one was a chatbot for middle schoolers, built on the vision that people would one day have AI friends the way they have pets — a contrarian wager at a time when NLP technology could not yet answer general questions.

The narrow-product hedge. betaworks reasoned the same technology was best suited to a narrow, vertical experience, which led it to Poncho, its weather chatbot.

BERT changed the board. When the transformer paper dropped and BERT arrived as the first transformer-based language model the team could work with, Hugging Face shipped an open-source version of BERT and "were off and running", Borthwick recalls.

Seeing the shift is the job. The Hugging Face founders recognised the technology shift; "we over at Poncho didn't see", he says — the divergence that made the difference between the two bets.

The investing lesson. A team can keep improving its existing product while a larger technology shift changes the opportunity around it; recognising that shift matters as much as execution.

Where each road led. Hugging Face went on to ride the platform shift to become the open-source hub for AI models, while Poncho stayed with weather — the contrast Borthwick frames as the core takeaway for founders and investors.

Read more: How I Invest with David Weisburd