Angelina YangFounder and Host, TwoSetAI · AI builder for visibility and discoverability

RAG Isn't Always the Answer—Sometimes Simple Context Window Wins

26 May 2026 · 0 min

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Building vertical AI agents, the speaker learned that RAG is overkill for small datasets. Most early customers have limited data that fits in a simple context window, which often outperforms complex retrieval pipelines. Starting with the wrong architecture before understanding the actual business problem is a common mistake.

We started with a more complex idea. We did not have clarity on our business problem. We did not know in advance that in so many scenarios our data will be small. Vertical AI agents, in many scenarios you actually have small to medium data, and all these fancy RAG techniques often are framed for medium to big data. Your initial customer can be different from your current customer. It's hard to take right decision every time.