How AI agents & Claude skills work (Clearly Explained)
1061 segments
Ross, Mike, welcome back to the pod. By
the end of this episode, what are people
going to learn?
>> I hope I'm going to share some wisdom on
how you can use the agents better.
There's a lot of information going on
right now. I disagree with most of it,
and that's what we're going to talk
about. So, at the end, whether you're
building something, [music] using an
agent for some sort of work, you have
the best outcome possible.
>> And is this going [music] to be a
technical dive or, you know,
non-technical person can
>> Anyone can watch this. There's going to
be a lot of diagrams. That's all.
>> [laughter]
>> You're going to make it clear to
understand the concepts, right?
>> Easy.
>> Okay.
>> Basics.
>> Let's go.
>> So,
>> [music]
>> the first thing that I want to announce,
previous episodes, we probably disagree
with this point, but now
what's true is the models are good.
The models are exceptionally good. Opus
4.6 is amazing. GPT 5.4 is amazing. I
know there's like two sets of camp
where, especially when it comes to
programming, people are like, "Oh, Opus
is the better UI designer. GPT 5.4 is
the better back end." Generally
speaking, we've reached a point We're
not at AGI yet. Well, we reached a point
where the models are good.
But, context still matters, and you have
the power to steer the models in a
direction where you can get quality or
you can get slop. And that's what I
really want to talk about. But, before
we get into all that, and feel free to
cut me off cuz this topic excites me. Um
we need to learn how context works. And
context is the model assembling
information that it needs to execute an
action. And the way the context is
assembled, let's say in a coding agent,
but really in any sort of agent, is
there's this general system prompt,
usually by the model provider. So, for
example, Claude code leaked recently,
and one of the cool things that, um
especially as a developer, I got to do
is I got to read the system prompt. So,
they have this general system prompt
that guides the model on how to act,
what to do, what not to do. The system
prompt is very important. And then you
have a lot of people have agent.md files
or cloud.md files. Now, I'm just going
to say off rip,
95% of people don't need this.
The reason being is, again, you have to
assume that the models are already good,
right? Now, imagine I told you, Greg,
every time we're about to shoot a
podcast, Greg, you need a microphone.
You know you need a microphone, right?
You've done this plenty of times, right?
So, if I'm building, like, let's say a
website with, uh, cloud code, and I'm
telling cloud code, "This code base uses
React." I don't need to, because it has
the code base in context. It can check
the code, right? So, there is this
disparity where a lot of people are
putting a lot of onus on the harness and
the context building, and I'm low-key
starting to strip things off. Like, I'm
going super, super minimal, because,
again, not to sound like a Anthropic or
OpenAI shill. Unfortunately, I have not
been acquired. None of them are paying
me.
Um, but the models are really, really
good.
>> Wait, so 95% of the time I don't even
need a bot bother with an agent.md file?
>> You don't. Like, it unless this is some
sort of proprietary information.
>> Yeah, what is the 5% of of time I should
care about it?
>> Proprietary information that, like,
maybe specific to your company or some
methodology that is specific to you that
has to be referenced in every single
conversation, cuz the annoying part with
an agent.md file is every time you go
back and forth with the agent, it's
added in the context, right? The cool
thing about skills, and I'm going to
talk about skills in a second, the way
skills are designed, the skills are used
in a way that's called progressive
disclosure, meaning, when you have a
skill file, the entire thing isn't added
to context. It's just the title and the
description. So, the agent has the title
and description in the context, and when
you, let's say you have a notion report
skill, right? And you tell your agent,
"Hey, I want you to create a notion
report." It's then going to check its
context and be like, "Oh, I have this
skill. Let me check out the entire
document." So, it's not in the context,
what's in the context is the name and
the description, but that's enough for
the agent to be like, "Oh, this is a
skill I need. Let me go use it." Which
is fantastic. I'm a skills maxi, and I'm
going to show later in the episode like
how you craft the perfect skills. But,
with agent.md and claw.md files, its
context being added at every turn,
right? So, let's say you have like a
thousand line file claw.md, and let's
say that's like 7,000 tokens. You're
spending 7,000 tokens on every run. Now,
do you need to? Most likely not. It
probably should be a skill, but if you
have some sort of company proprietary
information, or like there's something
specific that you do that the model
needs to know at every single turn, then
you use it. The thing is 95% of people
don't have that, right? So, I'm not a
fan unless that's the case. So, and and
and the reason being is we're wasting
tokens, right? It's in every single
turn.
But, this is where the beauty of skills
come. Um I'll show my screen here.
The your skill, again, this is not like
word for word how it looks, but a skill
basically looks like this. There is a
name, there is a description,
and then underneath
is a bunch of information. I'm going to
put bunch of info.
What When you create a skill.md file,
what gets added into the context is
actually just the name and the
description,
right? The bunch of info doesn't get
added. So, imagine you have two
sentences versus an agent.md that has
like a thousand lines that get added
into the context. We're talking
thousands of tokens compared to a couple
hundred. And the agent only gets the
bunch of info when it realizes it needs
this skill. So, if I have, let's say, a
certain way of generating a report, a
certain way of structuring my code,
why would I put that in the agent.md
file when I can have the agent call on
it progressively when it needs it,
right? So, this is why skills are
honestly, like I'm a shill, I'm a maxi,
but people do it wrong and I'm going to
share the right way on how do we create
skills. So, so far we have the system
prompt, the agent.md, the skills, and
then we have the tools, right? So, if
you're using cloud code, there's already
built-in tools that read tool or write
tool. Like there's many tools that it
uses. This has to be added into the
context because the model the model
doesn't call the tools. It like it's the
agent harness around it that allows it
to call the tools.
And then in this case, we also have our
code base, right? Like whatever if we're
building a web app, a mobile app. I know
most people here won't care for the
specific framework and honestly, we're
getting to a point if you're not
technical, you really shouldn't.
Um and then we have the user
conversation. So, this is what
the complete context window is filled
with, right? And this can total up to
let's say like at the beginning this
could be like 20,000 tokens and as the
conversation continues to grow, you
might reach your limit of 25 250,000
tokens and that's when you see both
cloud code and open AI codex they
they'll compact, right? So, beautiful so
far, right? This is how context works.
Why skills are important and how you
should generate skills.
Let's say I have a specific workflow.
For example, for my YouTube channel, you
know, we're at a point right now Greg
where we get sponsors now. Crazy. When I
first joined this not when I first came
to the pod not a thing. We get sponsors
now. It was just your mom sponsoring the
channel. Yeah, yeah, yeah, it was just
her showing love, feeding me. Uh but now
we get sponsors. I get a lot of emails
and some are good, some are bad and it's
a lot of time I'm sure you're aware to
comb through and to check. So, I have an
open cloud agent that has its own email,
right? I I I have it I don't I given it
access to my email, uh cuz there's like
attack vectors and I've been hacked
before, so I'm very careful with these
things, but it has its own email. And
every time I get an email from like a
sponsor, I forward that email to the
agent. Now, the first time I told my
Open Cloud agent, "I'm going to forward
you emails. Check every 15 minutes when
you have an email.
Um and when you check the email, do
research on the sponsor and tell me if
they're worth it."
That's all I told the agent.
Every sponsor email I sent it, it was
like legit, legit, legit, perfect,
perfect, perfect. There was no like the
There was no rejection. There's no this
is bad or these guys are a scam or this
product's not good. Like there was no
deep research being done by it. So, then
I realized, "Huh, okay. The model needs
a step-by-step guide."
This is when I create a skill. But
here's the problem. A lot of people will
I'll just write it down here will
identify
uh identify they have a workflow, right?
You have some sort of workflow. And then
they'll jump to create the skill right
away.
This is the Let me click hide here. This
is the worst thing you can do. I'm just
going to draw arrows to signify
that this is bad. You don't do these.
And the reason why you don't do this is
imagine
you hire an employee or you're mentoring
somebody.
Um correct me if I'm wrong.
You're probably going to tell them what
to do.
And if they ask you questions on how to
do it, you'll help them. You would
ideally like them to fail and then you
want to then tell them, "No, this is how
you do it." Like there needs to be some
sort of experiential learning. The way
I've been creating skills, Greg, and I
have like a 100% hit rate now when I
tell my agent to do something specific
is I actually walk with it step-by-step
on doing the workflow. So, in the case
of my YouTube uh analysis, I told the
agent, "Okay, I just sent you an email.
Tell me about the company." Company's
this, this, that, and that. Okay, their
Twitter, check their YouTube, check
their Trustpilot, check if they raised
any money. If two of these are have not
If two of these don't exist or not in
good standing, automatic rejection. It
checked and it was like, "You're
absolutely right." I was using Opus.
Um these uh this is not a good company.
And then it would just we would We have
a spreadsheet in Google Sheets. It'd be
like, "No contact."
>> It's so frustrating too, right? Cuz
you're like you give it a task and it
seems like so binary, like right or
wrong. And then when you tell it, "Hey,
like why didn't you look at the
Trustpilot? Why didn't you see if
they've raised money?" "You're
absolutely right."
>> absolutely
>> It's like, "What?"
>> And And the thing is the reason why this
is the case is the models uh actually
don't think. They're predictors of
tokens, right? So, when you give it
English, when I give it English, it maps
it on this vector graph and then it
looks for the closest resemblance and it
says, "This is the response," right? So,
when you say, "What is the capital of
France?" It maps it again on this graph
and it says, "Oh, Paris is pretty close
by." Then it gives you Paris. It has no
It doesn't think. It doesn't understand.
It feels like it understands. It feels
like it thinks. Heck, it even feels like
it has emotion. That's because it's been
trained on so much data. But it actually
does not know how to think. And this is
where a lot of people be frustrated um
with like, "Why is it not understanding
me?" You have to walk with it. So, I
told it, "Okay, this is how you
research." And it's like, "Okay." It
researches. And guess what? This is part
of the context. And I'm like, "Okay, now
that you're done researching, when it's
a good company, these are the qualities
you look for. And then when it's really
good, send me an email."
And then once we had a successful run
and we did it again and again, then I
converted it to a skill.
Or the reason being is a lot of people
create the skills themselves or I I
mean, they'll use the AI to create the
skill, but it doesn't have the context
on what a successful run looks like.
Right? Cuz most of the time, especially
if you're using Open Claw, it's probably
going to fail at the API call. It's
probably going to call the data wrong.
Like there's so many places it's going
to get wrong and I see a lot of people
saying, "It's just so frustrating. This
is terrible technology. Why doesn't it
work?" It's cuz you don't understand how
an agent works, right? It will mimic you
perfectly, but you've given it nothing
to mimic, right? So, I will
do the workflow myself. So, the the
updated version is identify the
workflow,
go back
and forth and teach it. So, like I'm
doing it like I'll be like, "Okay, first
do the research." Here's the result. And
I'll be like, "What do you think about
this?" "Oh, these guys are terrible."
You're absolutely right. "Okay, what do
you you should go to the Google Sheet
and mark this as bad company."
I've done that. Once I've had that back
and forth, then I tell the AI,
uh
"Review what you did
and then create the skill." So, now it
has actual context with how it worked
and it's going to create the skill
beautifully. I don't handwrite skills. I
don't think you need to. You can use AI
to do it. They even have a skill to
create skills. Skill inception.
But, you should have the context of what
a successful run looks like. And this is
why, by the way, I don't install skills.
Like I've seen people like, "Oh, this
Notion skill, this social media skill,
whatever." I'll I'll I'll review it.
I'll check it out. I'll even give it to
my AI and be like, "Oh, what are some
things we can learn from this?" But, I
don't download skills because your agent
needs the context of a successful run,
which you then turn to skills, right? Um
and this is the big thing I see. You see
skills marketplaces. You see download
this and that. First of all, it's a easy
way to attack somebody. So, I would be
very, very careful with downloading some
random person's skills.
But, second of all, again, it's all
about context, right? It's all about and
you know, Open Claw has a memory layer
and all these type of things. You want
it to do the right thing and the only
way it can do the right thing is if you
give it the proper context. And to me,
the best way to create a skill is to
work with it in your specific workflow.
Once you have a successful run, tell it,
"Okay, review what you just did. This is
the skill you need to create." I'll
pause here.
>> I mean, it makes sense, right? Cuz
if you hired an employee, you would do
the same thing.
>> Yeah.
>> You wouldn't You wouldn't just be like,
"Okay, go do this thing. Good luck."
>> Yeah.
>> Uh and by the way, this is how you're
going to go do things forever. You would
map out a workflow. You would identify
what right and wrong is. You would
uh do it iteratively.
And then, once you've gotten to that
point, you would codify it.
>> 100% and I think like that's the thing.
Like, we should treat models and these
agents like very new employees versus
like these black magic boxes that like
know everything, right? They know
everything because they've been trained
on a lot of data, but they don't know
your workflow, your steps, right? So, I
see a lot of people who have you know,
15 like right off the they'll set up
open claw and um 15 sub agents, 30
skills.
Yet, you haven't even set up your own
workflows, right? And these things are
cool right off the bat and and there's a
perfect time to use sub agents. I use
sub agents a lot.
But, the way you build like I call it
scaling for productivity, not scaling
for what looks cool, right? Like, I've
seen like for example, paper claw. Paper
claw looks awesome. Cool. I used it. I
loved it, right? But, I think people
would be more productive if they built
up from scratch their own version.
Meaning like, okay, you have your own
like
um
you know, like editor, right? Content
creator.
>> So, you're You're asking people to do
the work, basically.
>> 100% 100% and cuz the thing is, it's
like
look, I'm in the position where like
people using like these beefed-up things
make a lot more sense for me. And the
reason being is like I could build a
product like that. Like, I know what
your audience wants. I know what my
audience wants. Like, you know, heck, I
could spin up agents and build this
thing, right? But, if I'm going to be
completely honest, if you want to scale
for productivity, it starts with one
agent and you building up the skills.
And then, okay, now you've built up some
skills and now you add a sub agent and
your one agent manages multiple agents.
Right? Like, imagine this. Like, imagine
I start a company and off rip, I have 10
employees.
Never managed a team in my life. Heck, I
don't even have a really big family. So,
like, I'm a little Like, you know what I
mean? So, it's like you have to sort of
Yeah, it's not sexy. Um and I apologize
if this is not the cool thing people
wanted to hear. But, you sort of have to
put in the work and build it up. And I
And I personally believe you're building
skills, like, your personal human
skills, not
skill that MD files, that when the
models get better, when the agents get
better, you will be more valuable cuz at
the end of the day, as long as there's
no new paradigm for models, LLMs just
predict tokens.
They don't understand or know the way
you and I do, right? And this is why
although like yeah, the job scene and
all this stuff is scary, I genuinely
believe anyone who knows how these tools
work and like knows how to build agents
and like craft skills and like knows how
to make them productive, we're in it for
a good run. Mhm. So, you're saying that
if you know how to do this, you won't
join the permanent underclass.
>> The permanent underclass. [laughter]
So, is the permanent underclass
basically like I've seen this these this
this on Twitter a lot. Is that basically
AI has replaced you, so now you're just
>> From what I understand, it's
once AGI comes,
all these white-collar workers are going
to lose their jobs.
And if you don't know how to build
skills, use AI,
people say you're joining the permanent
underclass. That's That's the term.
>> It's permanent, too. That's scary.
>> [laughter]
>> So, I just have a little bit of time
left. Yeah, by the way, like
it's ridiculous to call it a permanent
underclass.
>> Yeah, cuz that's terrifying. [laughter]
>> understand underclass, but permanent
permanent it's like
>> Like you're saying there's no hope like
>> No
>> Yeah, um I mean, we are in like
knowledge that took 20 people 20 years
to acquire is now like 20 bucks a month,
right? So, there is like a huge shift,
right? People who are non-technical are
I I think I saw yesterday like some guy
hit like a hundred million dollars um
and he vibe coded the whole app. I think
it was him and his friend.
>> 1.8 billion
>> billion?
>> Yeah.
>> So, you know what I mean? Like it is the
there is a shift, right? And I think
this idea of like well, I'm not
>> how you were like billion. You were
about to just leave this podcast and
just be like
>> No, you know what it is? I just
realized, man, I overthink things. Like
I just need to drop the thing, release
the thing and there's like wisdom in
that like
there needs to be this level of
delusion, which I don't have. Like I'm
trying to work on where you're like this
is just going to work out. We're just
going to launch the product. It's going
to succeed and if it doesn't, onto the
next one cuz 1.8 billion
>> Yeah, dude.
>> Like B?
>> B
>> USD?
>> We're Yeah, we're not talking Monopoly
>> [laughter]
>> Cuz it was Canadian.
Uh it's it's uh
>> We're not talking carny coins.
>> [laughter]
>> We're talk we're talking real Benjamins.
>> Yeah.
>> Yeah, that makes sense. That makes
sense. But yeah, like I I hope this like
understanding of like again, I
personally don't think you don't need an
agent.md file unless you have something
proprietary.
Um skills are valuable. Build your own
though. Build build your own. Like you
know like when you ask your mom when you
were a kid, oh, can we have McDonald's?
And she's like we have food at home. We
have food at home. Build your own
skills. For coding perspective, from
coding wise,
um
a lot of the companies model companies
have realized that the agents are really
good at writing code, particularly
TypeScript. And this is why there's been
like you see this advancement with like
Claude co-work and like even open claw.
Really what they're doing under the hood
is they're writing code, right? They're
writing code calling APIs and all this
stuff. So, when it comes to building a
project um you actually don't need
skills or like you don't need an agent
MD file specific to the tech stack you
use. Like I remember we used to I'm
using React and you know, Convex or I'm
using Next.js and Supabase I'm using
this and I'm using that and you put that
in the agent MD file and you have like
all these lines.
For the most part, unless again you have
a specific specific workflow
unnecessary. And the reason being is
code itself has become context now. So,
the more the more important thing is
starting with a solid foundation.
Templates used to be big back in the
day. People made lots of money with
templates. I believe templates are going
to have a renaissance because if you
have a solid like template, right? Like
whether it be like for web app or mobile
app
because that becomes context for the
agent, it's going to build on top of
that, right? And again, I didn't need
some large agent.md file. I didn't need
any large cloud.md file. What I needed
was again, minimal context usage and
skills. So, if there's anything
anyone can learn from me is build your
own skills. Build your own skills. And
there's this methodology I don't know if
I've shared this with you, recursively
building skills. So, let's say you've
built your skill, right? I have I'll
draw a diagram cuz why not?
Let's say I have a workflow
and after you like setting up my
workflow with an agent, I've decided,
you know what? I'm going to turn this
into a skill, right? So, this is my uh
skill.md.
Now, here's the thing. Even though you
have the skill.md, the agent at some
point is still going to mess up because
there's probably gaps in the information
it has in the skill. So, when it messes
up, I'm going to work with it again. How
do I work with it? You messed up.
Try calling the API again. Try doing
this again. Or even ask it when it tells
you, "Oh, I failed. I couldn't do this
task." Believe it or not, when you tell
the agent, "Why did you fail?" When you
ask it, like, "What's the error that you
got?" It will tell you descriptively,
"Oh, I got a 505 error. You uh, you have
insufficient credits." Like, "Oh, okay.
So, it's a credit issue. Fine." So, I
would tell it that. And then,
I would pass that failure back to the
agent. So, let's say uh, it did
something wrong. We identified the
failure. All I did was asking it. I will
give that failure back to the agent.
I'll be like, "You failed here. This
didn't work. Fix this."
It's going to fix. It's going to write
code. It's going to do whatever it does.
Once it fixes it and it's done it right,
now you tell it with the new fix,
"Update the skill so this doesn't happen
again."
I have, like, for my YouTube channel, I
have like a report generator. It calls
Notion, Dub Analytics, YouTube
Analytics, Twitter Analytics. Pulls from
my It pulls from like eight data
sources. There's no way you're going to
one prompt and the agent's going to do
it. But, every time I tell it to do that
workflow, it takes like 10 minutes. It
executes it flawlessly. Why? I went
through five loops of this.
Five iterations of recursively building
the skill. And that skill is so good. I
genuinely think if anyone's going to if
like skills marketplace is going to be a
thing, there's going to be people who
sell skills. Like, really well-defined,
like, step-by-step skills because people
are just creating them without having
built out the workflow with the agent,
right? So, use the workflow by hand,
like, telling it each step. Once it's
done it completely, create the scale out
MD file, continue to use it. It's going
to mess up. When he messes up, you thank
God you don't complain cuz a lot of
people are like, "Oh, I messed up. I'm
angry." No, this is a moment where you
identify the error, tell it, "This is
the error, fix it." It'll fix it itself,
and then you tell it to update the skill
file so that this doesn't happen again.
>> So, that's a little bit about shifting
your expectation, right? Cuz people just
assume uh
it's going to work in the beginning.
You're saying basically it's not going
to work initially. There's going to be
two, three, five, six hiccups. Um and
over time, it should
be good.
>> So, this is most people's expectations.
Right?
>> Yeah.
>> And
the way I've personally experienced is
it's like this.
So, there's like this early area of
investment that you have to make that
sucks, that nobody will tell you,
especially Agent Harness's company cuz
they wouldn't raise as much money if
they did. But like this maybe I would
give it 2 weeks cuz it took me 2 weeks
like OpenClaw when I first set up
OpenClaw, I thought the same thing. I'm
like, "What What is this garbage? Right?
Like it doesn't understand anything.
It's confusing." Then I realized like,
"Oh, like
let me go lower level." The models and
the agents like they they don't think
like you and me. Right? Like I could I
could tell you, "Hey,
um Greg, we need a report on like, you
know, the financials in Notion."
Because you're probably were in the same
business, we worked together, you would
understand based on the context you have
of the business what that means. But
imagine a new guy joins like, "Yeah, I
need a report on the financials."
So, where do I even start?
>> reminds me? I wonder if we can put this
clip in.
But in the office, you watch The Office?
>> I am not an office watcher,
unfortunately.
>> There's a clip that
uh there's a new boss
and
the new boss goes to Jim, one of the
main characters. Yeah, and he asked for
a rundown.
So go go The Office
The Office rundown.
>> I don't know.
>> Basically, Charles
the whole episode is about
Jim trying to ask around and be like,
"What What is a rundown? Like what is a
rundown?" He's like calling his dad,
like "What is a rundown?" You know what
I mean? He's just Um he didn't have the
context.
>> Yeah. He didn't have the context.
>> Yeah. And and and it goes back to my
initial point, the models are really
really good now, but the context matters
more than anything, right? So when you
see like these large agent like
companies and sub agents, and again, I'm
not saying those don't work, but I'm
saying
probably won't work for you off rip
because you haven't built it up to get
to that point, right? So let's say like
for me for example, I started with um
one agent. Let me draw this. I started
with one agent. And this was like my
main agent. This did everything, right?
This checked my spreadsheet, this
checked my sponsors email, and all these
type of things. And once I had like
predefined workflows, let's say for like
working with sponsors, then I can
actually have a sub agent. What's the
purpose of the sub agent? The sub agent
does all the marketing stuff, right? But
I'm not creating the sub agent for the
sake of creating it. It's going to have
skills, it's going to have context, and
it actually makes sense for me to have
sub agents, right? So I've built out my
thing to like now I have five sub
agents. I have one for marketing, one
uh for business, one for personal, and
and that's it. And I'm willing to bet if
I went open claw to open claw with
anyone, my system is more productive
because I didn't scale for what looks
cool, I scale for productivity.
>> That was a bar.
>> That was a huge bar. We got to clip
that. I was just thinking that clip,
that's going to rip.
>> Yeah, that was a bar. Um what else do
you want to leave people with or is this
this is the main point? Yeah, like
here's like the we've got to a point
where the models are good. The models
are really good. The context matters
plus the harness, right? So, for
example,
there was this benchmark, although I'm
not 100% supporting it, that there was a
difference between the quality of output
that cursor generated versus Claude code
versus Codex, right?
Um So, what that tells me is that we've
reached a point where the models are
really really good. They're probably
going to get better. The next iteration
is probably going to get better, but the
harness and the tools that you surround
it, the context that you give it is
going to matter even more. And just like
in everything in life, less is more,
right? Like building up step by step,
making it productive for you first
before you add the shiny new thing. Like
cuz I tried all these tools all the time
like especially paper paperclip blew up
and a lot of people are talking about
and it's fantastic, but I'm willing to
bet if people took 2 weeks to build up
to the version cuz you can prompt open
Claude to do all that stuff. If they
built up their own version of paperclip
in 2 3 weeks where like they're building
things that they actually need, their
productivity level will skyrocket
through the roof.
>> It's a hot take.
>> It's a hot take.
>> Might get me in trouble.
>> No, it won't get Who's it going to get
you in trouble with? Maybe paperclip
raises a billion dollars and they don't
acquire my podcast.
>> [laughter]
[gasps]
>> I think
Listen, you're you're out there, you're
trying things and you're just sharing
what you're learning in real time. So,
if you're just
You're not
>> Things can change by the way. Hey, like
2 weeks from now it could be like no
give the agent everything. There's this
new memory paper that Google released
and like now like it has the ability to
index information and stuff, but
as it as it pertains to real life, less
is more, simple is better, right? If you
can't explain it in in a few sentences,
you probably don't really understand it,
right? And I find that the models are
trained on so much information,
especially when it comes to programming,
building, and like and um what do you
call like day-to-day work, like
financial work, or like any sort of
like, you know, checking contracts and
stuff. Like they the model companies are
focusing on that, like on white-collar
work. The models are really, really
good. What matters more is the harness
and the tools you provided. And the one
thing that you and I have that the
models don't have is my specific
workflow, my specific taste, my specific
strategy of doing things. And those can
be codified in skills, right? This is
why like skills make sense when you
build them. Not if you download my
skill. Like I have this one skill.
Um like again, don't download it. Do I'm
telling you now, do not download it.
Don't use it. I just put it so I can get
some GitHub stars. Um
I have this one skill, and it's
literally a code structure skill.
And I'll put the markdown so people can
see it.
Um it's 116 lines. It's basically after
AI has generated a bunch of code, I like
it structured in a certain way, so it's
easy for me to review it. And like I
mentioned earlier with skills, the only
thing that gets added into context is
the name and description. So when I look
at the name, it's code structure. When I
look at the description, use when
multiple workflows duplicate the same
operational logic when deciding that
blah blah blah blah blah some nerd
stuff. So when I tell the agent, I want
to
clean up the code structure, it checks
the skills it has, it sees the name, it
reads the description. It's like, oh,
this makes sense. Then it progressively
discloses, meaning once it realizes it
needs this skill, then it adds the rest
of this, right? Versus if this was my
agent.md file, imagine every single
time, and we can actually check how many
tokens this is.
Let me check. Um
what was it? OpenAI token tokenizer.
If I go to this,
So, this is 944 tokens. So, if this was
an agent.md file, every single time I
have a chat, I'm adding 944 tokens.
Tokens ain't cheap now.
>> No.
>> But, if I just have the name
and the description, it's just 53
tokens.
>> And it's not even cheap. It's just like
you're not trying to
hit the limit quicker than you need to
hit the limit.
>> Cuz the model will get dumb as the
context window closes, right? So, if you
have like a context window, and I can
draw this out. If this is your context
window,
and like the optimal is you're between
like there's always like maybe like 10%
is already filled with all the
system prompt and all that stuff. You
want to be between like
you know, fresh to like 70% cuz the
closer you get to 99, 100% like 99, 90,
80%, it starts to get dumb, right? And
you can think of this like a human. Like
imagine you throw a bunch of information
again and again and again and again. And
this is why like when I like was in
school, like last minute studying never
worked for me cuz like I didn't pay
attention the entire year. Now I have to
learn about polynomials, and I have to
do these graphs, and there's this weird
notation. It's impossible for me to
catch up, right? And it's the same way
with the agents. You want to keep your
context window You want to save your
context window cuz hey, it saves you
money. But not only that, it makes a
more performant
um agent. So, less is more. Less is
more. Rely more on the model's strength,
and what the model needs is what's
unique and special about you, your
workflow, your business, not general
knowledge. Don't tell the model use
React.
It knows to use React. Don't tell the
model um you know, things that like
should already be known uh for the uh
like you know,
task. Like for example, like let's say
I'm doing a financial report, and then
the agent.md file, I say um
to denote money use a dollar sign.
It's going to use a dollar sign. Right
now, if you have a specific currency,
then you like, oh, use this currency.
This is the You know, like for something
that the agent won't do manually, like
won't know manually, that's when you
have like your agent.md's, Claude.md's,
but honestly, these are a farce. You
don't need them. Um, skills skills
skills skills skills is what it's at.
>> Thanks for keeping it real. I appreciate
you, man.
>> That's all I'm going to do. Thank you,
man.
>> it.
Uh, like always, I'll include links
where you can follow
Ross Mike on YouTube and X and other
places in the show notes in the
description, so go follow him there.
Always clearly breaking down things. We,
uh,
>> [sighs]
>> I have to be real with you. You weren't
going to come on the show today.
>> I wasn't, and I'll be honest, I I told
Greg, and I'm just going to be frank.
I'm like, I don't have that banger, you
know, something new dropping, let's
review it, cuz if we going to be honest,
there's not that many tools dropping
nowadays. Like, unfortunately, the big
dogs are running the show.
>> Yeah.
>> Um, the Clauds and the
the Anthropics and the Open AI,
especially when it comes to general
purpose and
and coding,
they sort of run the game, so they're
releasing updates, and like all the
stuff has already been covered. So, I
was like, Greg, I don't know if I have
anything valuable to add.
>> And what did I say?
>> You're like, the people, you know, you
got to think about impact. You got to
think about what, you know, this could
apply to someone's And you showed me
like a a text someone, right?
>> I sent a text to you.
>> Yeah. I'm going to pull it up.
Uh, I sent a text to you of someone who
saw a video that we did together,
and it that video got him into coding.
Now, he's running a cake business, and
he's making $150,000 a year and growing.
And he said,
"The Greg and Ross Mike
episode in November last year is what
got me into coding. I've recommended to
everyone asking how to start out. And I
just sent you that text and I said,
"It's not about the numbers. It's not
about, you know, cuz you said in the
text
>> You don't see it sometimes, right?
>> everything we do to get to 200k views
minimum.
>> yeah, yeah, yeah.
>> And I'm just like
I hope this gets 200k views or more, so
like and comment to to juice those
algorithms, but if it gets 2,000 and two
people end up taking this information
and changes their business, their
productivity, how they think about
things, then you know, I think that's
why I think that's why you and myself
have been put on this planet Earth is to
inspire people to get their creative
juices flowing. And so I thank you for
for coming on and and taking time out of
your day.
>> And I appreciate the motivation and
yeah, I hope this helps somebody and I
can't wait to be back with more.
>> Absolutely. All right, catch you later,
dude.
Ask follow-up questions or revisit key timestamps.
Ross Mike joins the pod to discuss optimizing AI agents by minimizing unnecessary context and leveraging 'skills' for better performance. He argues that most users rely too heavily on verbose 'agent.md' files, which waste tokens and degrade performance, and instead recommends building and iteratively refining 'skills'—small, modular sets of instructions that are only brought into context when needed. By treating AI agents like new employees and iteratively training them on specific workflows, users can achieve much higher productivity and success.
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