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How AI agents & Claude skills work (Clearly Explained)

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How AI agents & Claude skills work (Clearly Explained)

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1061 segments

0:00

Ross, Mike, welcome back to the pod. By

0:01

the end of this episode, what are people

0:03

going to learn?

0:04

>> I hope I'm going to share some wisdom on

0:06

how you can use the agents better.

0:08

There's a lot of information going on

0:10

right now. I disagree with most of it,

0:13

and that's what we're going to talk

0:14

about. So, at the end, whether you're

0:15

building something, [music] using an

0:17

agent for some sort of work, you have

0:19

the best outcome possible.

0:20

>> And is this going [music] to be a

0:21

technical dive or, you know,

0:23

non-technical person can

0:25

>> Anyone can watch this. There's going to

0:26

be a lot of diagrams. That's all.

0:28

>> [laughter]

0:29

>> You're going to make it clear to

0:30

understand the concepts, right?

0:31

>> Easy.

0:32

>> Okay.

0:33

>> Basics.

0:33

>> Let's go.

0:33

>> So,

0:37

>> [music]

0:42

>> the first thing that I want to announce,

0:44

previous episodes, we probably disagree

0:46

with this point, but now

0:48

what's true is the models are good.

0:50

The models are exceptionally good. Opus

0:52

4.6 is amazing. GPT 5.4 is amazing. I

0:55

know there's like two sets of camp

0:56

where, especially when it comes to

0:58

programming, people are like, "Oh, Opus

1:00

is the better UI designer. GPT 5.4 is

1:02

the better back end." Generally

1:04

speaking, we've reached a point We're

1:06

not at AGI yet. Well, we reached a point

1:08

where the models are good.

1:10

But, context still matters, and you have

1:13

the power to steer the models in a

1:15

direction where you can get quality or

1:17

you can get slop. And that's what I

1:19

really want to talk about. But, before

1:21

we get into all that, and feel free to

1:22

cut me off cuz this topic excites me. Um

1:25

we need to learn how context works. And

1:28

context is the model assembling

1:31

information that it needs to execute an

1:33

action. And the way the context is

1:36

assembled, let's say in a coding agent,

1:37

but really in any sort of agent, is

1:40

there's this general system prompt,

1:41

usually by the model provider. So, for

1:43

example, Claude code leaked recently,

1:46

and one of the cool things that, um

1:48

especially as a developer, I got to do

1:49

is I got to read the system prompt. So,

1:51

they have this general system prompt

1:52

that guides the model on how to act,

1:54

what to do, what not to do. The system

1:56

prompt is very important. And then you

1:58

have a lot of people have agent.md files

2:01

or cloud.md files. Now, I'm just going

2:03

to say off rip,

2:04

95% of people don't need this.

2:07

The reason being is, again, you have to

2:09

assume that the models are already good,

2:12

right? Now, imagine I told you, Greg,

2:14

every time we're about to shoot a

2:15

podcast, Greg, you need a microphone.

2:19

You know you need a microphone, right?

2:20

You've done this plenty of times, right?

2:21

So, if I'm building, like, let's say a

2:24

website with, uh, cloud code, and I'm

2:27

telling cloud code, "This code base uses

2:29

React." I don't need to, because it has

2:32

the code base in context. It can check

2:33

the code, right? So, there is this

2:36

disparity where a lot of people are

2:38

putting a lot of onus on the harness and

2:41

the context building, and I'm low-key

2:43

starting to strip things off. Like, I'm

2:45

going super, super minimal, because,

2:48

again, not to sound like a Anthropic or

2:50

OpenAI shill. Unfortunately, I have not

2:52

been acquired. None of them are paying

2:53

me.

2:54

Um, but the models are really, really

2:56

good.

2:57

>> Wait, so 95% of the time I don't even

2:59

need a bot bother with an agent.md file?

3:02

>> You don't. Like, it unless this is some

3:03

sort of proprietary information.

3:05

>> Yeah, what is the 5% of of time I should

3:08

care about it?

3:08

>> Proprietary information that, like,

3:10

maybe specific to your company or some

3:12

methodology that is specific to you that

3:14

has to be referenced in every single

3:16

conversation, cuz the annoying part with

3:18

an agent.md file is every time you go

3:21

back and forth with the agent, it's

3:22

added in the context, right? The cool

3:25

thing about skills, and I'm going to

3:26

talk about skills in a second, the way

3:28

skills are designed, the skills are used

3:32

in a way that's called progressive

3:34

disclosure, meaning, when you have a

3:35

skill file, the entire thing isn't added

3:37

to context. It's just the title and the

3:39

description. So, the agent has the title

3:42

and description in the context, and when

3:45

you, let's say you have a notion report

3:47

skill, right? And you tell your agent,

3:49

"Hey, I want you to create a notion

3:50

report." It's then going to check its

3:53

context and be like, "Oh, I have this

3:55

skill. Let me check out the entire

3:57

document." So, it's not in the context,

4:00

what's in the context is the name and

4:02

the description, but that's enough for

4:04

the agent to be like, "Oh, this is a

4:05

skill I need. Let me go use it." Which

4:07

is fantastic. I'm a skills maxi, and I'm

4:09

going to show later in the episode like

4:11

how you craft the perfect skills. But,

4:14

with agent.md and claw.md files, its

4:16

context being added at every turn,

4:19

right? So, let's say you have like a

4:20

thousand line file claw.md, and let's

4:24

say that's like 7,000 tokens. You're

4:26

spending 7,000 tokens on every run. Now,

4:29

do you need to? Most likely not. It

4:32

probably should be a skill, but if you

4:33

have some sort of company proprietary

4:35

information, or like there's something

4:37

specific that you do that the model

4:40

needs to know at every single turn, then

4:41

you use it. The thing is 95% of people

4:44

don't have that, right? So, I'm not a

4:47

fan unless that's the case. So, and and

4:50

and the reason being is we're wasting

4:52

tokens, right? It's in every single

4:55

turn.

4:56

But, this is where the beauty of skills

4:57

come. Um I'll show my screen here.

5:00

The your skill, again, this is not like

5:02

word for word how it looks, but a skill

5:05

basically looks like this. There is a

5:07

name, there is a description,

5:10

and then underneath

5:12

is a bunch of information. I'm going to

5:14

put bunch of info.

5:16

What When you create a skill.md file,

5:19

what gets added into the context is

5:22

actually just the name and the

5:23

description,

5:24

right? The bunch of info doesn't get

5:27

added. So, imagine you have two

5:29

sentences versus an agent.md that has

5:32

like a thousand lines that get added

5:34

into the context. We're talking

5:36

thousands of tokens compared to a couple

5:38

hundred. And the agent only gets the

5:40

bunch of info when it realizes it needs

5:43

this skill. So, if I have, let's say, a

5:46

certain way of generating a report, a

5:48

certain way of structuring my code,

5:50

why would I put that in the agent.md

5:52

file when I can have the agent call on

5:55

it progressively when it needs it,

5:57

right? So, this is why skills are

5:59

honestly, like I'm a shill, I'm a maxi,

6:02

but people do it wrong and I'm going to

6:03

share the right way on how do we create

6:06

skills. So, so far we have the system

6:08

prompt, the agent.md, the skills, and

6:10

then we have the tools, right? So, if

6:12

you're using cloud code, there's already

6:14

built-in tools that read tool or write

6:15

tool. Like there's many tools that it

6:17

uses. This has to be added into the

6:19

context because the model the model

6:21

doesn't call the tools. It like it's the

6:23

agent harness around it that allows it

6:25

to call the tools.

6:26

And then in this case, we also have our

6:28

code base, right? Like whatever if we're

6:30

building a web app, a mobile app. I know

6:32

most people here won't care for the

6:33

specific framework and honestly, we're

6:35

getting to a point if you're not

6:36

technical, you really shouldn't.

6:38

Um and then we have the user

6:40

conversation. So, this is what

6:42

the complete context window is filled

6:44

with, right? And this can total up to

6:47

let's say like at the beginning this

6:48

could be like 20,000 tokens and as the

6:51

conversation continues to grow, you

6:53

might reach your limit of 25 250,000

6:56

tokens and that's when you see both

6:59

cloud code and open AI codex they

7:01

they'll compact, right? So, beautiful so

7:03

far, right? This is how context works.

7:06

Why skills are important and how you

7:08

should generate skills.

7:10

Let's say I have a specific workflow.

7:12

For example, for my YouTube channel, you

7:14

know, we're at a point right now Greg

7:16

where we get sponsors now. Crazy. When I

7:18

first joined this not when I first came

7:20

to the pod not a thing. We get sponsors

7:22

now. It was just your mom sponsoring the

7:23

channel. Yeah, yeah, yeah, it was just

7:24

her showing love, feeding me. Uh but now

7:27

we get sponsors. I get a lot of emails

7:29

and some are good, some are bad and it's

7:32

a lot of time I'm sure you're aware to

7:33

comb through and to check. So, I have an

7:36

open cloud agent that has its own email,

7:39

right? I I I have it I don't I given it

7:41

access to my email, uh cuz there's like

7:43

attack vectors and I've been hacked

7:45

before, so I'm very careful with these

7:46

things, but it has its own email. And

7:49

every time I get an email from like a

7:50

sponsor, I forward that email to the

7:53

agent. Now, the first time I told my

7:56

Open Cloud agent, "I'm going to forward

7:57

you emails. Check every 15 minutes when

8:00

you have an email.

8:01

Um and when you check the email, do

8:02

research on the sponsor and tell me if

8:04

they're worth it."

8:05

That's all I told the agent.

8:07

Every sponsor email I sent it, it was

8:09

like legit, legit, legit, perfect,

8:11

perfect, perfect. There was no like the

8:15

There was no rejection. There's no this

8:16

is bad or these guys are a scam or this

8:18

product's not good. Like there was no

8:20

deep research being done by it. So, then

8:22

I realized, "Huh, okay. The model needs

8:25

a step-by-step guide."

8:27

This is when I create a skill. But

8:29

here's the problem. A lot of people will

8:32

I'll just write it down here will

8:34

identify

8:35

uh identify they have a workflow, right?

8:38

You have some sort of workflow. And then

8:40

they'll jump to create the skill right

8:41

away.

8:43

This is the Let me click hide here. This

8:46

is the worst thing you can do. I'm just

8:47

going to draw arrows to signify

8:50

that this is bad. You don't do these.

8:52

And the reason why you don't do this is

8:55

imagine

8:57

you hire an employee or you're mentoring

8:59

somebody.

9:00

Um correct me if I'm wrong.

9:02

You're probably going to tell them what

9:05

to do.

9:06

And if they ask you questions on how to

9:08

do it, you'll help them. You would

9:10

ideally like them to fail and then you

9:12

want to then tell them, "No, this is how

9:13

you do it." Like there needs to be some

9:15

sort of experiential learning. The way

9:17

I've been creating skills, Greg, and I

9:19

have like a 100% hit rate now when I

9:21

tell my agent to do something specific

9:23

is I actually walk with it step-by-step

9:26

on doing the workflow. So, in the case

9:29

of my YouTube uh analysis, I told the

9:32

agent, "Okay, I just sent you an email.

9:34

Tell me about the company." Company's

9:35

this, this, that, and that. Okay, their

9:37

Twitter, check their YouTube, check

9:39

their Trustpilot, check if they raised

9:41

any money. If two of these are have not

9:44

If two of these don't exist or not in

9:46

good standing, automatic rejection. It

9:48

checked and it was like, "You're

9:49

absolutely right." I was using Opus.

9:51

Um these uh this is not a good company.

9:54

And then it would just we would We have

9:56

a spreadsheet in Google Sheets. It'd be

9:58

like, "No contact."

9:59

>> It's so frustrating too, right? Cuz

10:01

you're like you give it a task and it

10:04

seems like so binary, like right or

10:06

wrong. And then when you tell it, "Hey,

10:09

like why didn't you look at the

10:10

Trustpilot? Why didn't you see if

10:12

they've raised money?" "You're

10:13

absolutely right."

10:15

>> absolutely

10:15

>> It's like, "What?"

10:17

>> And And the thing is the reason why this

10:18

is the case is the models uh actually

10:22

don't think. They're predictors of

10:24

tokens, right? So, when you give it

10:26

English, when I give it English, it maps

10:27

it on this vector graph and then it

10:29

looks for the closest resemblance and it

10:31

says, "This is the response," right? So,

10:33

when you say, "What is the capital of

10:34

France?" It maps it again on this graph

10:37

and it says, "Oh, Paris is pretty close

10:38

by." Then it gives you Paris. It has no

10:40

It doesn't think. It doesn't understand.

10:42

It feels like it understands. It feels

10:44

like it thinks. Heck, it even feels like

10:46

it has emotion. That's because it's been

10:48

trained on so much data. But it actually

10:50

does not know how to think. And this is

10:52

where a lot of people be frustrated um

10:55

with like, "Why is it not understanding

10:56

me?" You have to walk with it. So, I

10:59

told it, "Okay, this is how you

11:00

research." And it's like, "Okay." It

11:01

researches. And guess what? This is part

11:03

of the context. And I'm like, "Okay, now

11:05

that you're done researching, when it's

11:06

a good company, these are the qualities

11:08

you look for. And then when it's really

11:09

good, send me an email."

11:12

And then once we had a successful run

11:14

and we did it again and again, then I

11:16

converted it to a skill.

11:18

Or the reason being is a lot of people

11:20

create the skills themselves or I I

11:21

mean, they'll use the AI to create the

11:23

skill, but it doesn't have the context

11:25

on what a successful run looks like.

11:27

Right? Cuz most of the time, especially

11:28

if you're using Open Claw, it's probably

11:30

going to fail at the API call. It's

11:32

probably going to call the data wrong.

11:33

Like there's so many places it's going

11:35

to get wrong and I see a lot of people

11:36

saying, "It's just so frustrating. This

11:38

is terrible technology. Why doesn't it

11:39

work?" It's cuz you don't understand how

11:41

an agent works, right? It will mimic you

11:43

perfectly, but you've given it nothing

11:45

to mimic, right? So, I will

11:48

do the workflow myself. So, the the

11:50

updated version is identify the

11:52

workflow,

11:53

go back

11:55

and forth and teach it. So, like I'm

11:58

doing it like I'll be like, "Okay, first

12:00

do the research." Here's the result. And

12:03

I'll be like, "What do you think about

12:04

this?" "Oh, these guys are terrible."

12:05

You're absolutely right. "Okay, what do

12:07

you you should go to the Google Sheet

12:09

and mark this as bad company."

12:11

I've done that. Once I've had that back

12:13

and forth, then I tell the AI,

12:16

uh

12:17

"Review what you did

12:20

and then create the skill." So, now it

12:22

has actual context with how it worked

12:26

and it's going to create the skill

12:27

beautifully. I don't handwrite skills. I

12:28

don't think you need to. You can use AI

12:30

to do it. They even have a skill to

12:32

create skills. Skill inception.

12:34

But, you should have the context of what

12:37

a successful run looks like. And this is

12:39

why, by the way, I don't install skills.

12:42

Like I've seen people like, "Oh, this

12:43

Notion skill, this social media skill,

12:45

whatever." I'll I'll I'll review it.

12:46

I'll check it out. I'll even give it to

12:48

my AI and be like, "Oh, what are some

12:49

things we can learn from this?" But, I

12:50

don't download skills because your agent

12:53

needs the context of a successful run,

12:55

which you then turn to skills, right? Um

12:58

and this is the big thing I see. You see

12:59

skills marketplaces. You see download

13:02

this and that. First of all, it's a easy

13:04

way to attack somebody. So, I would be

13:07

very, very careful with downloading some

13:10

random person's skills.

13:11

But, second of all, again, it's all

13:13

about context, right? It's all about and

13:16

you know, Open Claw has a memory layer

13:17

and all these type of things. You want

13:20

it to do the right thing and the only

13:22

way it can do the right thing is if you

13:24

give it the proper context. And to me,

13:26

the best way to create a skill is to

13:28

work with it in your specific workflow.

13:31

Once you have a successful run, tell it,

13:33

"Okay, review what you just did. This is

13:34

the skill you need to create." I'll

13:36

pause here.

13:37

>> I mean, it makes sense, right? Cuz

13:40

if you hired an employee, you would do

13:43

the same thing.

13:43

>> Yeah.

13:44

>> You wouldn't You wouldn't just be like,

13:45

"Okay, go do this thing. Good luck."

13:47

>> Yeah.

13:48

>> Uh and by the way, this is how you're

13:49

going to go do things forever. You would

13:51

map out a workflow. You would identify

13:55

what right and wrong is. You would

13:58

uh do it iteratively.

14:00

And then, once you've gotten to that

14:02

point, you would codify it.

14:03

>> 100% and I think like that's the thing.

14:05

Like, we should treat models and these

14:08

agents like very new employees versus

14:12

like these black magic boxes that like

14:15

know everything, right? They know

14:17

everything because they've been trained

14:18

on a lot of data, but they don't know

14:20

your workflow, your steps, right? So, I

14:23

see a lot of people who have you know,

14:25

15 like right off the they'll set up

14:27

open claw and um 15 sub agents, 30

14:32

skills.

14:33

Yet, you haven't even set up your own

14:34

workflows, right? And these things are

14:36

cool right off the bat and and there's a

14:37

perfect time to use sub agents. I use

14:39

sub agents a lot.

14:41

But, the way you build like I call it

14:44

scaling for productivity, not scaling

14:46

for what looks cool, right? Like, I've

14:48

seen like for example, paper claw. Paper

14:50

claw looks awesome. Cool. I used it. I

14:52

loved it, right? But, I think people

14:54

would be more productive if they built

14:56

up from scratch their own version.

14:59

Meaning like, okay, you have your own

15:01

like

15:02

um

15:03

you know, like editor, right? Content

15:05

creator.

15:05

>> So, you're You're asking people to do

15:07

the work, basically.

15:08

>> 100% 100% and cuz the thing is, it's

15:09

like

15:10

look, I'm in the position where like

15:13

people using like these beefed-up things

15:15

make a lot more sense for me. And the

15:18

reason being is like I could build a

15:19

product like that. Like, I know what

15:21

your audience wants. I know what my

15:22

audience wants. Like, you know, heck, I

15:24

could spin up agents and build this

15:25

thing, right? But, if I'm going to be

15:27

completely honest, if you want to scale

15:28

for productivity, it starts with one

15:30

agent and you building up the skills.

15:32

And then, okay, now you've built up some

15:34

skills and now you add a sub agent and

15:36

your one agent manages multiple agents.

15:38

Right? Like, imagine this. Like, imagine

15:40

I start a company and off rip, I have 10

15:43

employees.

15:44

Never managed a team in my life. Heck, I

15:47

don't even have a really big family. So,

15:49

like, I'm a little Like, you know what I

15:50

mean? So, it's like you have to sort of

15:53

Yeah, it's not sexy. Um and I apologize

15:56

if this is not the cool thing people

15:57

wanted to hear. But, you sort of have to

15:59

put in the work and build it up. And I

16:00

And I personally believe you're building

16:02

skills, like, your personal human

16:04

skills, not

16:06

skill that MD files, that when the

16:08

models get better, when the agents get

16:10

better, you will be more valuable cuz at

16:12

the end of the day, as long as there's

16:14

no new paradigm for models, LLMs just

16:16

predict tokens.

16:18

They don't understand or know the way

16:20

you and I do, right? And this is why

16:22

although like yeah, the job scene and

16:24

all this stuff is scary, I genuinely

16:26

believe anyone who knows how these tools

16:28

work and like knows how to build agents

16:30

and like craft skills and like knows how

16:33

to make them productive, we're in it for

16:35

a good run. Mhm. So, you're saying that

16:37

if you know how to do this, you won't

16:39

join the permanent underclass.

16:40

>> The permanent underclass. [laughter]

16:43

So, is the permanent underclass

16:45

basically like I've seen this these this

16:48

this on Twitter a lot. Is that basically

16:50

AI has replaced you, so now you're just

16:53

>> From what I understand, it's

16:56

once AGI comes,

16:59

all these white-collar workers are going

17:01

to lose their jobs.

17:03

And if you don't know how to build

17:06

skills, use AI,

17:08

people say you're joining the permanent

17:10

underclass. That's That's the term.

17:12

>> It's permanent, too. That's scary.

17:14

>> [laughter]

17:15

>> So, I just have a little bit of time

17:16

left. Yeah, by the way, like

17:19

it's ridiculous to call it a permanent

17:21

underclass.

17:22

>> Yeah, cuz that's terrifying. [laughter]

17:23

>> understand underclass, but permanent

17:25

permanent it's like

17:27

>> Like you're saying there's no hope like

17:28

>> No

17:29

>> Yeah, um I mean, we are in like

17:33

knowledge that took 20 people 20 years

17:35

to acquire is now like 20 bucks a month,

17:37

right? So, there is like a huge shift,

17:39

right? People who are non-technical are

17:41

I I think I saw yesterday like some guy

17:44

hit like a hundred million dollars um

17:46

and he vibe coded the whole app. I think

17:48

it was him and his friend.

17:49

>> 1.8 billion

17:51

>> billion?

17:51

>> Yeah.

17:54

>> So, you know what I mean? Like it is the

17:56

there is a shift, right? And I think

17:58

this idea of like well, I'm not

17:59

>> how you were like billion. You were

18:01

about to just leave this podcast and

18:02

just be like

18:03

>> No, you know what it is? I just

18:04

realized, man, I overthink things. Like

18:06

I just need to drop the thing, release

18:08

the thing and there's like wisdom in

18:09

that like

18:11

there needs to be this level of

18:12

delusion, which I don't have. Like I'm

18:14

trying to work on where you're like this

18:15

is just going to work out. We're just

18:17

going to launch the product. It's going

18:19

to succeed and if it doesn't, onto the

18:20

next one cuz 1.8 billion

18:23

>> Yeah, dude.

18:24

>> Like B?

18:25

>> B

18:26

>> USD?

18:27

>> We're Yeah, we're not talking Monopoly

18:30

>> [laughter]

18:30

>> Cuz it was Canadian.

18:32

Uh it's it's uh

18:34

>> We're not talking carny coins.

18:37

>> [laughter]

18:40

>> We're talk we're talking real Benjamins.

18:42

>> Yeah.

18:43

>> Yeah, that makes sense. That makes

18:44

sense. But yeah, like I I hope this like

18:46

understanding of like again, I

18:48

personally don't think you don't need an

18:50

agent.md file unless you have something

18:52

proprietary.

18:53

Um skills are valuable. Build your own

18:56

though. Build build your own. Like you

18:58

know like when you ask your mom when you

19:00

were a kid, oh, can we have McDonald's?

19:01

And she's like we have food at home. We

19:03

have food at home. Build your own

19:05

skills. For coding perspective, from

19:07

coding wise,

19:09

um

19:11

a lot of the companies model companies

19:13

have realized that the agents are really

19:15

good at writing code, particularly

19:18

TypeScript. And this is why there's been

19:21

like you see this advancement with like

19:23

Claude co-work and like even open claw.

19:26

Really what they're doing under the hood

19:27

is they're writing code, right? They're

19:28

writing code calling APIs and all this

19:30

stuff. So, when it comes to building a

19:33

project um you actually don't need

19:37

skills or like you don't need an agent

19:39

MD file specific to the tech stack you

19:41

use. Like I remember we used to I'm

19:43

using React and you know, Convex or I'm

19:46

using Next.js and Supabase I'm using

19:48

this and I'm using that and you put that

19:49

in the agent MD file and you have like

19:51

all these lines.

19:53

For the most part, unless again you have

19:54

a specific specific workflow

19:57

unnecessary. And the reason being is

19:59

code itself has become context now. So,

20:02

the more the more important thing is

20:05

starting with a solid foundation.

20:06

Templates used to be big back in the

20:07

day. People made lots of money with

20:09

templates. I believe templates are going

20:11

to have a renaissance because if you

20:13

have a solid like template, right? Like

20:16

whether it be like for web app or mobile

20:17

app

20:18

because that becomes context for the

20:20

agent, it's going to build on top of

20:23

that, right? And again, I didn't need

20:25

some large agent.md file. I didn't need

20:28

any large cloud.md file. What I needed

20:30

was again, minimal context usage and

20:34

skills. So, if there's anything

20:38

anyone can learn from me is build your

20:39

own skills. Build your own skills. And

20:42

there's this methodology I don't know if

20:44

I've shared this with you, recursively

20:45

building skills. So, let's say you've

20:47

built your skill, right? I have I'll

20:49

draw a diagram cuz why not?

20:52

Let's say I have a workflow

20:55

and after you like setting up my

20:57

workflow with an agent, I've decided,

20:59

you know what? I'm going to turn this

21:01

into a skill, right? So, this is my uh

21:05

skill.md.

21:07

Now, here's the thing. Even though you

21:09

have the skill.md, the agent at some

21:12

point is still going to mess up because

21:14

there's probably gaps in the information

21:16

it has in the skill. So, when it messes

21:18

up, I'm going to work with it again. How

21:21

do I work with it? You messed up.

21:23

Try calling the API again. Try doing

21:25

this again. Or even ask it when it tells

21:27

you, "Oh, I failed. I couldn't do this

21:29

task." Believe it or not, when you tell

21:30

the agent, "Why did you fail?" When you

21:33

ask it, like, "What's the error that you

21:35

got?" It will tell you descriptively,

21:36

"Oh, I got a 505 error. You uh, you have

21:39

insufficient credits." Like, "Oh, okay.

21:41

So, it's a credit issue. Fine." So, I

21:43

would tell it that. And then,

21:46

I would pass that failure back to the

21:49

agent. So, let's say uh, it did

21:52

something wrong. We identified the

21:53

failure. All I did was asking it. I will

21:56

give that failure back to the agent.

21:57

I'll be like, "You failed here. This

21:59

didn't work. Fix this."

22:02

It's going to fix. It's going to write

22:03

code. It's going to do whatever it does.

22:05

Once it fixes it and it's done it right,

22:07

now you tell it with the new fix,

22:09

"Update the skill so this doesn't happen

22:12

again."

22:13

I have, like, for my YouTube channel, I

22:15

have like a report generator. It calls

22:17

Notion, Dub Analytics, YouTube

22:19

Analytics, Twitter Analytics. Pulls from

22:22

my It pulls from like eight data

22:23

sources. There's no way you're going to

22:25

one prompt and the agent's going to do

22:28

it. But, every time I tell it to do that

22:30

workflow, it takes like 10 minutes. It

22:32

executes it flawlessly. Why? I went

22:34

through five loops of this.

22:36

Five iterations of recursively building

22:38

the skill. And that skill is so good. I

22:41

genuinely think if anyone's going to if

22:44

like skills marketplace is going to be a

22:45

thing, there's going to be people who

22:47

sell skills. Like, really well-defined,

22:50

like, step-by-step skills because people

22:52

are just creating them without having

22:55

built out the workflow with the agent,

22:57

right? So, use the workflow by hand,

23:00

like, telling it each step. Once it's

23:02

done it completely, create the scale out

23:04

MD file, continue to use it. It's going

23:07

to mess up. When he messes up, you thank

23:09

God you don't complain cuz a lot of

23:11

people are like, "Oh, I messed up. I'm

23:12

angry." No, this is a moment where you

23:14

identify the error, tell it, "This is

23:16

the error, fix it." It'll fix it itself,

23:18

and then you tell it to update the skill

23:20

file so that this doesn't happen again.

23:23

>> So, that's a little bit about shifting

23:25

your expectation, right? Cuz people just

23:27

assume uh

23:29

it's going to work in the beginning.

23:31

You're saying basically it's not going

23:33

to work initially. There's going to be

23:35

two, three, five, six hiccups. Um and

23:38

over time, it should

23:40

be good.

23:41

>> So, this is most people's expectations.

23:44

Right?

23:45

>> Yeah.

23:45

>> And

23:46

the way I've personally experienced is

23:49

it's like this.

23:51

So, there's like this early area of

23:53

investment that you have to make that

23:55

sucks, that nobody will tell you,

23:58

especially Agent Harness's company cuz

24:00

they wouldn't raise as much money if

24:01

they did. But like this maybe I would

24:04

give it 2 weeks cuz it took me 2 weeks

24:06

like OpenClaw when I first set up

24:07

OpenClaw, I thought the same thing. I'm

24:09

like, "What What is this garbage? Right?

24:12

Like it doesn't understand anything.

24:13

It's confusing." Then I realized like,

24:14

"Oh, like

24:15

let me go lower level." The models and

24:18

the agents like they they don't think

24:20

like you and me. Right? Like I could I

24:21

could tell you, "Hey,

24:23

um Greg, we need a report on like, you

24:26

know, the financials in Notion."

24:28

Because you're probably were in the same

24:30

business, we worked together, you would

24:32

understand based on the context you have

24:33

of the business what that means. But

24:35

imagine a new guy joins like, "Yeah, I

24:36

need a report on the financials."

24:39

So, where do I even start?

24:40

>> reminds me? I wonder if we can put this

24:41

clip in.

24:42

But in the office, you watch The Office?

24:45

>> I am not an office watcher,

24:46

unfortunately.

24:47

>> There's a clip that

24:49

uh there's a new boss

24:51

and

24:53

the new boss goes to Jim, one of the

24:55

main characters. Yeah, and he asked for

24:58

a rundown.

24:59

So go go The Office

25:02

The Office rundown.

25:05

>> I don't know.

25:07

>> Basically, Charles

25:10

the whole episode is about

25:13

Jim trying to ask around and be like,

25:15

"What What is a rundown? Like what is a

25:18

rundown?" He's like calling his dad,

25:19

like "What is a rundown?" You know what

25:21

I mean? He's just Um he didn't have the

25:24

context.

25:24

>> Yeah. He didn't have the context.

25:26

>> Yeah. And and and it goes back to my

25:27

initial point, the models are really

25:30

really good now, but the context matters

25:33

more than anything, right? So when you

25:35

see like these large agent like

25:37

companies and sub agents, and again, I'm

25:39

not saying those don't work, but I'm

25:41

saying

25:42

probably won't work for you off rip

25:44

because you haven't built it up to get

25:46

to that point, right? So let's say like

25:48

for me for example, I started with um

25:51

one agent. Let me draw this. I started

25:53

with one agent. And this was like my

25:55

main agent. This did everything, right?

25:57

This checked my spreadsheet, this

25:59

checked my sponsors email, and all these

26:01

type of things. And once I had like

26:03

predefined workflows, let's say for like

26:07

working with sponsors, then I can

26:09

actually have a sub agent. What's the

26:10

purpose of the sub agent? The sub agent

26:12

does all the marketing stuff, right? But

26:15

I'm not creating the sub agent for the

26:16

sake of creating it. It's going to have

26:18

skills, it's going to have context, and

26:20

it actually makes sense for me to have

26:22

sub agents, right? So I've built out my

26:24

thing to like now I have five sub

26:26

agents. I have one for marketing, one

26:29

uh for business, one for personal, and

26:32

and that's it. And I'm willing to bet if

26:34

I went open claw to open claw with

26:36

anyone, my system is more productive

26:39

because I didn't scale for what looks

26:40

cool, I scale for productivity.

26:44

>> That was a bar.

26:45

>> That was a huge bar. We got to clip

26:46

that. I was just thinking that clip,

26:48

that's going to rip.

26:50

>> Yeah, that was a bar. Um what else do

26:52

you want to leave people with or is this

26:54

this is the main point? Yeah, like

26:56

here's like the we've got to a point

26:58

where the models are good. The models

26:59

are really good. The context matters

27:01

plus the harness, right? So, for

27:04

example,

27:05

there was this benchmark, although I'm

27:07

not 100% supporting it, that there was a

27:10

difference between the quality of output

27:13

that cursor generated versus Claude code

27:15

versus Codex, right?

27:18

Um So, what that tells me is that we've

27:21

reached a point where the models are

27:23

really really good. They're probably

27:24

going to get better. The next iteration

27:25

is probably going to get better, but the

27:27

harness and the tools that you surround

27:30

it, the context that you give it is

27:33

going to matter even more. And just like

27:35

in everything in life, less is more,

27:38

right? Like building up step by step,

27:40

making it productive for you first

27:43

before you add the shiny new thing. Like

27:45

cuz I tried all these tools all the time

27:46

like especially paper paperclip blew up

27:49

and a lot of people are talking about

27:50

and it's fantastic, but I'm willing to

27:52

bet if people took 2 weeks to build up

27:54

to the version cuz you can prompt open

27:56

Claude to do all that stuff. If they

27:58

built up their own version of paperclip

28:00

in 2 3 weeks where like they're building

28:02

things that they actually need, their

28:04

productivity level will skyrocket

28:06

through the roof.

28:07

>> It's a hot take.

28:08

>> It's a hot take.

28:09

>> Might get me in trouble.

28:10

>> No, it won't get Who's it going to get

28:11

you in trouble with? Maybe paperclip

28:13

raises a billion dollars and they don't

28:14

acquire my podcast.

28:15

>> [laughter]

28:17

[gasps]

28:18

>> I think

28:20

Listen, you're you're out there, you're

28:21

trying things and you're just sharing

28:22

what you're learning in real time. So,

28:24

if you're just

28:26

You're not

28:26

>> Things can change by the way. Hey, like

28:27

2 weeks from now it could be like no

28:29

give the agent everything. There's this

28:31

new memory paper that Google released

28:34

and like now like it has the ability to

28:35

index information and stuff, but

28:38

as it as it pertains to real life, less

28:41

is more, simple is better, right? If you

28:43

can't explain it in in a few sentences,

28:46

you probably don't really understand it,

28:47

right? And I find that the models are

28:50

trained on so much information,

28:52

especially when it comes to programming,

28:53

building, and like and um what do you

28:56

call like day-to-day work, like

28:57

financial work, or like any sort of

28:59

like, you know, checking contracts and

29:01

stuff. Like they the model companies are

29:03

focusing on that, like on white-collar

29:05

work. The models are really, really

29:07

good. What matters more is the harness

29:09

and the tools you provided. And the one

29:11

thing that you and I have that the

29:13

models don't have is my specific

29:15

workflow, my specific taste, my specific

29:18

strategy of doing things. And those can

29:20

be codified in skills, right? This is

29:22

why like skills make sense when you

29:25

build them. Not if you download my

29:27

skill. Like I have this one skill.

29:29

Um like again, don't download it. Do I'm

29:32

telling you now, do not download it.

29:33

Don't use it. I just put it so I can get

29:36

some GitHub stars. Um

29:39

I have this one skill, and it's

29:40

literally a code structure skill.

29:43

And I'll put the markdown so people can

29:45

see it.

29:46

Um it's 116 lines. It's basically after

29:49

AI has generated a bunch of code, I like

29:51

it structured in a certain way, so it's

29:53

easy for me to review it. And like I

29:55

mentioned earlier with skills, the only

29:57

thing that gets added into context is

29:59

the name and description. So when I look

30:00

at the name, it's code structure. When I

30:02

look at the description, use when

30:04

multiple workflows duplicate the same

30:05

operational logic when deciding that

30:08

blah blah blah blah blah some nerd

30:09

stuff. So when I tell the agent, I want

30:11

to

30:12

clean up the code structure, it checks

30:14

the skills it has, it sees the name, it

30:17

reads the description. It's like, oh,

30:18

this makes sense. Then it progressively

30:21

discloses, meaning once it realizes it

30:22

needs this skill, then it adds the rest

30:24

of this, right? Versus if this was my

30:26

agent.md file, imagine every single

30:29

time, and we can actually check how many

30:31

tokens this is.

30:33

Let me check. Um

30:35

what was it? OpenAI token tokenizer.

30:39

If I go to this,

30:42

So, this is 944 tokens. So, if this was

30:46

an agent.md file, every single time I

30:49

have a chat, I'm adding 944 tokens.

30:52

Tokens ain't cheap now.

30:53

>> No.

30:54

>> But, if I just have the name

30:57

and the description, it's just 53

30:58

tokens.

30:58

>> And it's not even cheap. It's just like

31:00

you're not trying to

31:02

hit the limit quicker than you need to

31:04

hit the limit.

31:04

>> Cuz the model will get dumb as the

31:06

context window closes, right? So, if you

31:08

have like a context window, and I can

31:10

draw this out. If this is your context

31:12

window,

31:13

and like the optimal is you're between

31:19

like there's always like maybe like 10%

31:21

is already filled with all the

31:23

system prompt and all that stuff. You

31:24

want to be between like

31:27

you know, fresh to like 70% cuz the

31:29

closer you get to 99, 100% like 99, 90,

31:33

80%, it starts to get dumb, right? And

31:35

you can think of this like a human. Like

31:36

imagine you throw a bunch of information

31:39

again and again and again and again. And

31:41

this is why like when I like was in

31:43

school, like last minute studying never

31:46

worked for me cuz like I didn't pay

31:47

attention the entire year. Now I have to

31:49

learn about polynomials, and I have to

31:51

do these graphs, and there's this weird

31:53

notation. It's impossible for me to

31:56

catch up, right? And it's the same way

31:57

with the agents. You want to keep your

31:59

context window You want to save your

32:01

context window cuz hey, it saves you

32:02

money. But not only that, it makes a

32:04

more performant

32:06

um agent. So, less is more. Less is

32:09

more. Rely more on the model's strength,

32:11

and what the model needs is what's

32:13

unique and special about you, your

32:15

workflow, your business, not general

32:17

knowledge. Don't tell the model use

32:19

React.

32:20

It knows to use React. Don't tell the

32:22

model um you know, things that like

32:25

should already be known uh for the uh

32:28

like you know,

32:29

task. Like for example, like let's say

32:31

I'm doing a financial report, and then

32:33

the agent.md file, I say um

32:36

to denote money use a dollar sign.

32:39

It's going to use a dollar sign. Right

32:41

now, if you have a specific currency,

32:43

then you like, oh, use this currency.

32:46

This is the You know, like for something

32:48

that the agent won't do manually, like

32:51

won't know manually, that's when you

32:52

have like your agent.md's, Claude.md's,

32:54

but honestly, these are a farce. You

32:56

don't need them. Um, skills skills

32:59

skills skills skills is what it's at.

33:03

>> Thanks for keeping it real. I appreciate

33:05

you, man.

33:05

>> That's all I'm going to do. Thank you,

33:06

man.

33:07

>> it.

33:08

Uh, like always, I'll include links

33:09

where you can follow

33:11

Ross Mike on YouTube and X and other

33:14

places in the show notes in the

33:15

description, so go follow him there.

33:17

Always clearly breaking down things. We,

33:20

uh,

33:21

>> [sighs]

33:21

>> I have to be real with you. You weren't

33:22

going to come on the show today.

33:24

>> I wasn't, and I'll be honest, I I told

33:26

Greg, and I'm just going to be frank.

33:27

I'm like, I don't have that banger, you

33:31

know, something new dropping, let's

33:33

review it, cuz if we going to be honest,

33:35

there's not that many tools dropping

33:36

nowadays. Like, unfortunately, the big

33:39

dogs are running the show.

33:40

>> Yeah.

33:40

>> Um, the Clauds and the

33:42

the Anthropics and the Open AI,

33:44

especially when it comes to general

33:46

purpose and

33:47

and coding,

33:49

they sort of run the game, so they're

33:50

releasing updates, and like all the

33:53

stuff has already been covered. So, I

33:54

was like, Greg, I don't know if I have

33:56

anything valuable to add.

33:57

>> And what did I say?

33:58

>> You're like, the people, you know, you

33:59

got to think about impact. You got to

34:00

think about what, you know, this could

34:02

apply to someone's And you showed me

34:03

like a a text someone, right?

34:05

>> I sent a text to you.

34:07

>> Yeah. I'm going to pull it up.

34:09

Uh, I sent a text to you of someone who

34:14

saw a video that we did together,

34:16

and it that video got him into coding.

34:20

Now, he's running a cake business, and

34:21

he's making $150,000 a year and growing.

34:25

And he said,

34:26

"The Greg and Ross Mike

34:29

episode in November last year is what

34:31

got me into coding. I've recommended to

34:33

everyone asking how to start out. And I

34:36

just sent you that text and I said,

34:37

"It's not about the numbers. It's not

34:39

about, you know, cuz you said in the

34:41

text

34:43

>> You don't see it sometimes, right?

34:45

>> everything we do to get to 200k views

34:47

minimum.

34:48

>> yeah, yeah, yeah.

34:49

>> And I'm just like

34:50

I hope this gets 200k views or more, so

34:52

like and comment to to juice those

34:54

algorithms, but if it gets 2,000 and two

34:57

people end up taking this information

34:59

and changes their business, their

35:01

productivity, how they think about

35:03

things, then you know, I think that's

35:05

why I think that's why you and myself

35:08

have been put on this planet Earth is to

35:10

inspire people to get their creative

35:12

juices flowing. And so I thank you for

35:15

for coming on and and taking time out of

35:17

your day.

35:18

>> And I appreciate the motivation and

35:19

yeah, I hope this helps somebody and I

35:21

can't wait to be back with more.

35:23

>> Absolutely. All right, catch you later,

35:24

dude.

Interactive Summary

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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