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Why most AI products fail: Lessons from 50+ AI deployments at OpenAI, Google, and Amazon

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Aishwarya Naresh Reganti and Kiriti Badam have helped build and launch more than 50 enterprise AI products across companies like OpenAI, Google, Amazon, and Databricks. Based on these experiences, they’ve developed a small set of best practices for building and scaling successful AI products. The goal of this conversation is to save you and your team a lot of pain and suffering. We discuss: 1. Two key ways AI products differ from traditional software, and why that fundamentally changes how they should be built 2. Common patterns and anti-patterns in companies that build strong AI products versus those that struggle 3. A framework they developed from real-world experience to iteratively build AI products that create a flywheel of improvement 4. Why obsessing about customer trust and reliability is an underrated driver of successful AI products 5. Why evals aren’t a cure-all, and the most common misconceptions people have about them 6. The skills that matter most for builders in the AI era — Brought to you by: Merge [https://merge.dev/lenny]—The fastest way to ship 220+ integrations: https://merge.dev/lenny [https://merge.dev/lenny] Strella [https://strella.io/lenny]—The AI-powered customer research platform: https://strella.io/lenny [https://strella.io/lenny] Brex [https://www.brex.com/product/business-account?ref_code=bmk_dp_brand1H25_ln_new_fs]—The banking solution for startups: https://www.brex.com/product/business-account?ref_code=bmk_dp_brand1H25_ln_new_fs [https://www.brex.com/product/business-account?ref_code=bmk_dp_brand1H25_ln_new_fs] — Transcript: https://www.lennysnewsletter.com/p/what-openai-and-google-engineers-learned [https://www.lennysnewsletter.com/p/what-openai-and-google-engineers-learned] — My biggest takeaways (for paid newsletter subscribers): https://www.lennysnewsletter.com/i/183007822/referenced [https://www.lennysnewsletter.com/i/183007822/referenced] — Get 15% off Aishwarya and Kiriti’s Maven course, Building Agentic AI Applications with a Problem-First Approach, using this link: https://bit.ly/3V5XJFp [https://bit.ly/3V5XJFp] — Where to find Aishwarya Naresh Reganti: • LinkedIn: https://www.linkedin.com/in/areganti [https://www.linkedin.com/in/areganti] • GitHub: https://github.com/aishwaryanr/awesome-generative-ai-guide [https://github.com/aishwaryanr/awesome-generative-ai-guide] • X: https://x.com/aish_reganti [https://x.com/aish_reganti] — Where to find Kiriti Badam: • LinkedIn: https://www.linkedin.com/in/sai-kiriti-badam [https://www.linkedin.com/in/sai-kiriti-badam] • X: https://x.com/kiritibadam [https://x.com/kiritibadam] — Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com [https://www.lennysnewsletter.com] • X: https://twitter.com/lennysan [https://twitter.com/lennysan] • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ [https://www.linkedin.com/in/lennyrachitsky/] — In this episode, we cover: (00:00) Introduction to Aishwarya and Kiriti (05:03) Challenges in AI product development (07:36) Key differences between AI and traditional software (13:19) Building AI products: start small and scale (15:23) The importance of human control in AI systems (22:38) Avoiding prompt injection and jailbreaking (25:18) Patterns for successful AI product development (33:20) The debate on evals and production monitoring (41:27) Codex team’s approach to evals and customer feedback (45:41) Continuous calibration, continuous development (CC/CD) framework (58:07) Emerging patterns and calibration (01:01:24) Overhyped and under-hyped AI concepts (01:05:17) The future of AI (01:08:41) Skills and best practices for building AI products (01:14:04) Lightning round and final thoughts — Referenced: • LevelUp Labs: https://levelup-labs.ai/ [https://levelup-labs.ai/] • Why your AI product needs a different development lifecycle: https://www.lennysnewsletter.com/p/why-your-ai-product-needs-a-different [https://www.lennysnewsletter.com/p/why-your-ai-product-needs-a-different] • Booking.com [http://Booking.com]: https://www.booking.com [https://www.booking.com] • Research paper on agents in production (by Matei Zaharia’s lab): https://arxiv.org/pdf/2512.04123 [https://arxiv.org/pdf/2512.04123] • Matei Zaharia’s research on Google Scholar: https://scholar.google.com/citations?user=I1EvjZsAAAAJ&hl=en [https://scholar.google.com/citations?user=I1EvjZsAAAAJ&hl=en] • The coming AI security crisis (and what to do about it) | Sander Schulhoff: https://www.lennysnewsletter.com/p/the-coming-ai-security-crisis [https://www.lennysnewsletter.com/p/the-coming-ai-security-crisis] • Gajen Kandiah on LinkedIn: https://www.linkedin.com/in/gajenkandiah [https://www.linkedin.com/in/gajenkandiah] • Rackspace: https://www.rackspace.com [https://www.rackspace.com] • The AI-native startup: 5 products, 7-figure revenue, 100% AI-written code | Dan Shipper (co-founder/CEO of Every): https://www.lennysnewsletter.com/p/inside-every-dan-shipper [https://www.lennysnewsletter.com/p/inside-every-dan-shipper] • Semantic Diffusion: https://martinfowler.com/bliki/SemanticDiffusion.html [https://martinfowler.com/bliki/SemanticDiffusion.html] • LMArena: https://lmarena.ai [https://lmarena.ai] • Artificial Analysis: https://artificialanalysis.ai/leaderboards/providers [https://artificialanalysis.ai/leaderboards/providers] • Why humans are AI’s biggest bottleneck (and what’s coming in 2026) | Alexander Embiricos (OpenAI Codex Product Lead): https://www.lennysnewsletter.com/p/why-humans-are-ais-biggest-bottleneck [https://www.lennysnewsletter.com/p/why-humans-are-ais-biggest-bottleneck] • Airline held liable for its chatbot giving passenger bad advice—what this means for travellers: https://www.bbc.com/travel/article/20240222-air-canada-chatbot-misinformation-what-travellers-should-know [https://www.bbc.com/travel/article/20240222-air-canada-chatbot-misinformation-what-travellers-should-know] • Demis Hassabis on LinkedIn: https://www.linkedin.com/in/demishassabis [https://www.linkedin.com/in/demishassabis] • We replaced our sales team with 20 AI agents—here’s what happened | Jason Lemkin (SaaStr): https://www.lennysnewsletter.com/p/we-replaced-our-sales-team-with-20-ai-agents [https://www.lennysnewsletter.com/p/we-replaced-our-sales-team-with-20-ai-agents] • Socrates’s quote: https://en.wikipedia.org/wiki/The_unexamined_life_is_not_worth_living [https://en.wikipedia.org/wiki/The_unexamined_life_is_not_worth_living] • Noah Smith’s newsletter: https://www.noahpinion.blog [https://www.noahpinion.blog] • Silicon Valley on HBO Max: https://www.hbomax.com/shows/silicon-valley/b4583939-e39f-4b5c-822d-5b6cc186172d [https://www.hbomax.com/shows/silicon-valley/b4583939-e39f-4b5c-822d-5b6cc186172d] • Clair Obscur: Expedition 33: https://store.steampowered.com/app/1903340/Clair_Obscur_Expedition_33/ [https://store.steampowered.com/app/1903340/Clair_Obscur_Expedition_33/] • Wisprflow: https://wisprflow.ai [https://wisprflow.ai] • Raycast: https://www.raycast.com [https://www.raycast.com] • Steve Jobs’s quote: https://www.goodreads.com/quotes/463176-you-can-t-connect-the-dots-looking-forward-you-can-only [https://www.goodreads.com/quotes/463176-you-can-t-connect-the-dots-looking-forward-you-can-only] — Recommended books: •  When Breath Becomes Air: https://www.amazon.com/When-Breath-Becomes-Paul-Kalanithi/dp/081298840X [https://www.amazon.com/When-Breath-Becomes-Paul-Kalanithi/dp/081298840X] • The Three-Body Problem: https://www.amazon.com/Three-Body-Problem-Cixin-Liu/dp/0765382032 [https://www.amazon.com/Three-Body-Problem-Cixin-Liu/dp/0765382032] • A Fire Upon the Deep: https://www.amazon.com/Fire-Upon-Deep-Zones-Thought/dp/0812515285 [https://www.amazon.com/Fire-Upon-Deep-Zones-Thought/dp/0812515285] — Production and marketing by https://penname.co/ [https://penname.co/]. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com [podcast@lennyrachitsky.com]. — Lenny may be an investor in the companies discussed. To hear more, visit www.lennysnewsletter.com [https://www.lennysnewsletter.com?utm_medium=podcast&utm_campaign=show-notes-no-free-preview-language]

Highlights

Building AI products is not just an evolution of traditional software development—it's a paradigm shift that demands new methodologies, mindsets, and leadership approaches. With real-world experience from leading AI initiatives at top tech companies, Aishwarya Naresh Reganti and Kiriti Badam share hard-earned insights on what actually works when bringing AI systems to market.
07:37
AI systems are non-deterministic and act as black boxes, sensitive to prompt variations
13:20
Begin with AI assisting humans in customer support to gather feedback before increasing autonomy.
21:11
74-75% of enterprises cite reliability as their biggest challenge in deploying customer-facing AI
22:38
Prompt injection and jailbreaking are potentially unsolvable problems in AI security
30:51
The CEO's interaction with AI tools is the top predictor of success.
41:12
Independent benchmarks are model evals, not application evals
41:32
Evals alone are not sufficient for measuring AI product success
57:31
CC/CD is the AI version of CI/CD, focusing on evals, analysis, and iteration
58:07
User behavior consistency is a critical indicator for framework progression
1:04:17
Being obsessed with the business problem is more valuable than constantly building with new tools.
1:07:46
Combining image models, LLMs, and world models will be a significant area of development
1:11:42
The pain of iterating through AI development becomes a company's new moat
1:19:22
Believe in yourself even when data suggests failure.

Chapters

Introduction to Aishwarya and Kiriti
00:00
Challenges in AI product development
05:03
Key differences between AI and traditional software
07:36
Building AI products: start small and scale
13:19
The importance of human control in AI systems
15:23
Avoiding prompt injection and jailbreaking
22:38
Patterns for successful AI product development
25:18
The debate on evals and production monitoring
33:20
Codex team’s approach to evals and customer feedback
41:27
Continuous calibration, continuous development (CC/CD) framework
45:41
Emerging patterns and calibration
58:07
Overhyped and under-hyped AI concepts
1:01:24
The future of AI
1:05:17
Skills and best practices for building AI products
1:08:41
Lightning round and final thoughts
1:14:04

Transcript

Kiriti Badam: We worked on a guest post together. They had this really key insight that building AI products is very different from building non-AI products. Most people tend to ignore the non-determinism. You don't know how the user might behave with your...