Utilizing Transition Failure Matrices for AI Debugging

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In this episode, we dive into the fast-emerging discipline of AI evaluation with Hamel Husain and Shreya Shankar, creators of AI Evals for Engineers & PMs, the #1 highest-grossing course on Maven.

After training 2000+ PMs and engineers across 500+ companies, Hamel and Shreya reveal the complete playbook for building evaluations that actually improve your AI product: moving beyond vanity dashboards, to a system that drives continuous improvement.

In this episode, you’ll learn:

• Why most AI eval dashboards fail to deliver real product improvements

• How to use error analysis to uncover your product’s most critical failure modes

• The role of a “principal domain expert” in setting a consistent quality bar

• Techniques for transforming messy error notes into a clean taxonomy of failures

• When to use code-based checks vs. LLM-as-a-judge evaluators

• How to build trust in your evals with human-labeled ground-truth datasets

• Why binary pass/fail labels outperform Likert scales in practice

• Evaluation strategies for complex systems: multi-turn conversations, RAG pipelines, and agentic workflows

• How CI safety nets and production monitoring work together to create a flywheel of continuous product improvement

References:

• Read the newsletter: https://www.lennysnewsletter.com/p/building-eval-systems-that-improve

• AI Evals for Engineers & PMs: https://maven.com/parlance-labs/evals

• A Field Guide to Rapidly Improving AI Products: https://hamel.dev/blog/posts/field-guide/

• Aligning LLM-Assisted Evaluation of LLM Outputs with Human Preferences: https://arxiv.org/abs/2404.12272

• Aman Khan: https://www.linkedin.com/in/amanberkeley/

• Anthropic: https://www.anthropic.com/

• Arize Phoenix: https://phoenix.arize.com/

• Braintrust: https://www.braintrust.dev/

• Beyond vibe checks: A PM’s complete guide to evals: https://www.lennysnewsletter.com/p/beyond-vibe-checks-a-pms-complete

• Frequently Asked Questions (And Answers) About AI Evals: https://hamel.dev/blog/posts/evals-faq/

• Hamel Husain: https://www.linkedin.com/in/hamelhusain/

• LangSmith: https://smith.langchain.com/

• Not Dead Yet: On RAG: https://hamel.dev/notes/llm/rag/not_dead.html

• OpenAI: https://openai.com/

• Shreya Shankar: https://www.linkedin.com/in/shrshnk/

Listen:

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Follow Lenny:

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Welcome to Lenny's Reads, where every week you’ll find a fresh audio version of my newsletter about building product, driving growth, and accelerating your career, read to you by the soothing voice of Lennybot.