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Aakash GuptaAakash Gupta

How to Build AI Evals in 2026 (Step-by-Step, No Hype)

Hamel Husain and Shreya Shankar are back with the definitive guide to AI evals. Step-by-step walkthrough using real production data from Nurture Boss. Error analysis, LLM judges, and the mistakes 90% of teams make.

Aakash GuptahostHamel HusainguestShreya Shankarguest
Jan 15, 20261h 7mWatch on YouTube ↗

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At a glance

WHAT IT’S REALLY ABOUT

Step-by-step evals workflow: traces, error analysis, and LLM judges

  1. The speakers argue that most real AI products need evals, and “no evals” claims often rely on upstream testing or informal dogfooding rather than rigorous measurement.
  2. They demonstrate starting with observability by collecting and reviewing real production traces (even via simple logging) to see what users actually experience beyond polished demos.
  3. They emphasize error analysis as the core leverage point: manually “open code” trace issues, then “axial code” them into actionable categories and count frequency to prioritize work.
  4. They show how to turn high-impact error categories into automated evaluators, including code-based checks for objective issues and LLM-as-judge prompts for subjective product failures.
  5. They stress that LLM judges must be validated against human labels using metrics beyond simple agreement (e.g., true positive/true negative rates) to avoid misleading confidence and stakeholder mistrust.

IDEAS WORTH REMEMBERING

5 ideas

Start with traces, not abstract metrics.

Review real production conversations (including tool calls/RAG/multi-turn) to see the messy failures that “helpfulness” scores and generic dashboards routinely miss.

You don’t need fancy observability to begin.

An observability platform can help, but logging to CSV/JSON/DataDog is sufficient if you can reliably inspect traces and attach notes to them.

Do “open coding” quickly to build intuition and a dataset.

Scan ~100 traces and write brief notes on what went wrong (or skip if fine) without debating root cause; speed and coverage matter more than perfection.

Convert notes into categories (axial codes) that are specific and labelable.

Vague buckets like “quality” or “temporal issues” don’t help teams label consistently; use concrete, actionable categories (and a “none of the above” option) to discover missing buckets.

Count issues to escape prioritization paralysis.

Once errors are categorized, pivot tables (and optional hierarchical subcategories) reveal the most frequent failure modes and enable PM-driven prioritization by frequency and severity.

WORDS WORTH SAVING

5 quotes

“This is what your AI agents are actually doing out there in production.”

— Aakash Gupta

“If you try to put helpfulness score… it’s not gonna catch stuff like this very well at all.”

— Hamel Husain

“ChatGPT will say, ‘Yeah, absolutely,’ but it will miss all of this nuance.”

— Shreya Shankar

“The main thing that’s inhibiting people is not doing the error analysis.”

— Hamel Husain

“It’s almost a tragedy to separate the prompt from the product manager ’cause it’s English.”

— Hamel Husain

Read the available transcript
Why evals are necessary beyond demos and vibe checksTracing and observability (tools vs DIY logging)Open coding: fast note-taking on trace failuresAxial coding: categorizing issues into actionable bucketsCounting and prioritization with pivot tables and subcategoriesCode-based evals vs LLM-as-judge evalsValidating judges: TPR/TNR vs accuracy/overall agreementPM vs AI engineer responsibilities and prompt ownershipCommon mistakes: skipping error analysis, outsourcing judgment, generic metrics

SPEAKERS

  • Aakash Gupta

    host

    AI product creator and host of the Aakash Gupta podcast/channel, focused on practical AI engineering and product workflows.

  • Hamel Husain

    guest

    Machine learning engineer and educator known for hands-on guidance on building and validating LLM evaluation systems.

  • Shreya Shankar

    guest

    ML/AI researcher and practitioner focused on reliable evaluation, monitoring, and real-world deployment of ML/LLM systems.

High quality AI-generated summary created from speaker-labeled transcript.

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