Hamel Husain (founder of Parlance Labs, co-author of an upcoming book on AI evals with Shreya Shankar) on the Applied Intelligence podcast — 39 minutes on why evals are the testing framework most businesses skip, and how to think about them the right way.
What an eval actually is An eval is structured data analysis and debugging on your AI application — you know what’s broken, and you know what to prioritize fixing It’s the answer to a real problem: AI outputs are stochastic (text), with no deterministic “right or wrong” to test against Software testing assumes a finite surface of failure; AI has an infinite one, so you have to decide what to measure Generic metrics are a trap Search “how to evaluate my AI app” and you’ll find vendors promising a dashboard of helpfulness, conciseness, toxicity, coherence scores (usually 1–5) Nobody knows what those numbers mean, they don’t correlate with what matters, and they actively burn engineering cycles looking at metrics that don’t matter “Reduce hallucination, increase helpfulness” is the same generic-metrics mindset — you’re going through motions without knowing what’s actually wrong There’s no easy button; you can use coding agents to write the evals, but you still have to be thoughtful about what you measure Start bottom-up, not top-down The process starts with error analysis: a blend of qualitative and quantitative work to find what’s broken in your application Most people are too top-down (worried about failure types they imagine) and get lost in generic metrics; the bottoms-up read of your actual data is the missing half Evals are really a process of eliciting your specification, then measuring against it — you can’t know “good” until you look at outputs and iterate AI can’t do your evals for you AI is great at fixing deterministic bugs; it cannot read your mind — it doesn’t know what “good” feels like for your product The future is AI walking you through the evals process and interrogating you, not doing it alone — a human stays in the loop Eval tooling needs to render your data domain-specifically (images as images, emails as emails, chat as chat), so it’s more than a chatbot Two failure modes Hamel sees most Not using AI deeply yourself — no coding with AI, no building with it → bad intuition, bad specifications Reaching for complexity too fast — day-one orchestration frameworks, graph databases, multi-agent setups before you can reason about what’s happening Deliberate, not slow AI lets you build the wrong thing faster — and many wrong things faster; it also lets you build the right thing faster You need product sense, grounding, and taste, or you just churn through bad ideas at higher speed AI amplifies who you are: if you’re okay with slop, it removes the friction and amplifies the slop Chatbot vs MCP Slapping a chatbot on an existing product is the mediocre default when there’s a “we need AI” mandate from the top Better: expose an MCP or an API on your product — the Google Workspace CLI is the canonical example of how much more useful agent-friendly access is Interface matters: a scheduling flow shouldn’t be a brittle text back-and-forth when a picker widget gives visual confirmation and avoids bugs Guardrails A guardrail is a specific eval sitting in the request/response path that blocks a bad output (competitor talk, profanity) Off-the-shelf guardrails are just someone else’s prompt, tuned to a different domain (shopping, travel) — you still have to do the evals work to know which failures to guard against Prioritize failures you can simulate or actually observe; unobservable ones are lower priority The stack, the vendor, and the team Start with the most powerful model you already know, build an eval harness around the metrics that matter, then back off to smaller/cheaper models and reason about the latency–cost–quality tradeoffs Data science gets more important, not less: the ability to ask the right questions is directly proportional to the quality of output you get AI competency is core to any knowledge-work business, so be careful outsourcing it — use third parties to upskill your team (a deliberate training exercise), never as a crutch The takeaway Parlance’s model is a “driving school” boot camp: they pair-program the whole end-to-end evals process on your data until you don’t need them The million-lines-of-code demos are all backed by harness engineering — metrics, logs, traces, observability — and evals are almost all of that harness You don’t need an R&D budget, maybe just a token budget: a $100 plan and deliberate experimentation gets you a long way “AI cannot read your mind. It doesn’t know what you feel like good is.”
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