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In the era of agentic coding, skill files and markdown can function as infinite, perfect employees, allowing small teams to achieve massive scale.

Garry Tan describes how agentic systems can 'skillify' tasks into reusable markdown files and code, enabling tiny teams to reach 15M ARR by treating these files as perfect, tireless employees. ✦ AI generated

Garry Tan · a16z Podcast · 2026-08-12 · original ↗

starts at this moment · 23:56

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How YC is organizing around loops and how you're advising your companies to.

I think we're just seeing like across the board, um, a markdown file is an employee. And it's an employee that, uh, will do the job perfectly every single time and it will do it like as many times as you want... we were talking about earlier that's like literally you can go from zero to 15 mil ARR in about 4 months with like two or three people and like hundreds of agent like, you know, a few hundred skill files.

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23:53feat of strength and then you turn it into a markdown file plus code plus tests that can be reused and like put into a cron job. >> Yes. >> And so, uh, I think we're just seeing like across the board, um, a markdown file is an employee. >> Yeah. >> And it's an employee that, uh, will do the job perfectly every single time and it will do it like as many times as you

24:17want. >> Yeah. >> And then, you know, at that point all you're doing is like take any business process that you need in your company and you just do it once perfectly. And the first time you try to do it, it's going to be bad. >> Expensive. Yeah, yes, many iterations. >> Yeah. But then at the end you can you as long as you can tell very, very quickly and in in very

24:36simple ways, like, "Hey agent, fix this, fix that. Like this was wrong." Um, you know, the actual trace and the actual, uh, history out of, um, that agent, uh, working with you, >> Mhm. >> it'll actually turn that into a skill file that's perfect, actually. And anytime it screws up in like a future case, it's just a bug fix, and then it's there forever. >> And this loop you would apply to sales,

25:00to marketing, to customer support, to everything. >> Yeah, to everything. >> Really interesting. >> I mean, G stack was basically that for engineering, right? It's like there's a QA loop. I had to build something that works with browsers to go and cuz that's what I found like early with G stack, I found myself um, you know, automating how I thought about PM, and then uh, you know, I had a

25:21engineering skill that was like an engine manager that made sure that there was a unit test and end-to-end test coverage. >> Yep. >> Um, but then in the end, I found myself like uh, I automated all the other things so much that all I was doing at the end was black box testing to to verify. And it was like, "Oh, no, no, okay, like even that part." Like it's interesting

25:42like uh, building these agentic systems today, I think that's all you're doing is you're seeing where the bottlenecks are, and then, you know, almost every single time it's like, "How do I just instruct the agent to create a piece of software or a markdown file that blows away that roadblock." And then, when you take a step back and you've done that for the whole task, it's like, I mean, we we there are

26:08companies now today that, you know, we were we were talking about earlier that's like literally you can go from zero to 15 mil ARR in about 4 months with like two or three people and like hundreds of agent like, you know, a few hundred skill files. >> It's amazing. So, there's this like recursive self-improvement and there's this hill climbing that happens. Like at what point does it start to fall

26:30over? Is there like do you need error correction? Do the errors compound? Does it get constrained by exception handling, human relationships? Cuz otherwise, these companies should just be able to grow and run forever. >> Yeah. I mean, I guess my experience once you get a lot of markdown files or yeah, anytime you have like some large amount of data, um, that's where like provenance matters. That's where um conflict management sort

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