Building AI Agents Part 1: What Even Is an Agent?
Understanding the 4-part loop that powers production AI agents: Perception, Reasoning, Action, and Feedback
šÆ TLDR:
An agent is just a loop with four parts: Perception ā Reasoning ā Action ā Feedback.
Get any part wrong, and your production system fails. This series shows you what actually works.
Look, everyone's talking about AI agents as if they were some mystical new technology. Google's got their definition, OpenAI has theirs, and every startup claims they're building "agentic AI."
But here's what I've learned building these things in production: an agent is just a loop with four moving parts. Not magic. Not sentience. Just a deterministic system that perceives, thinks, acts, and learns from what happens next.
This is part one of a five-part series where I'm going to show you what actually works when you're building agents that need to ship, scale, and not embarrass you in production. No theory, no hand-waving. Just the practical patterns and hard-won lessons from building real systems.
Today, we'll break down the fundamental loop every agent follows. In the next four parts, we'll dive deep into architectures, evals, prompting strategies, memory systems, and how to wire it all together. By the end of this series, you'll know how to build agents that actually work. Not demos, not prototypes, but real systems that can handle real users.
Why listen to us?
Because we've built this stuff. Not on paper, not in theory, but in products that had to survive the real world. We've been burned by flaky loops, hallucinations that looked confident but were dead wrong, and evals that revealed blind spots we thought we'd covered.
That's why this series exists: to share what it actually takes to build agents that don't just look good in a demo but hold up in production.
Let's break down the four parts that every agent needs to get right.
1. šļø Perception: The agent's worldview
This is how the agent sees the world. But here's the thing most people miss: it's not just what information comes in, but how it's packaged.
Take a calendar scheduling agent. Basic perception sees: "User wants lunch with Sarah at 1 pm tomorrow." That's it. That's all it knows.
But watch what happens when you improve perception:
- Level 1 - Raw data: "Schedule lunch with Sarah at 1 pm tomorrow" + calendar JSON
- Level 2 - Structured context: Previous meetings with Sarah, typical lunch duration, location preferences
- Level 3 - Enriched understanding: Sarah is a client (from CRM), you have a hard stop at 2:30 pm (from calendar), downtown traffic is terrible at 1 pm on Tuesdays (from maps API)
Same request. Completely different capabilities to handle it well.
How do you actually improve perception in production?
- Add context windows: Don't just pass the request. Include recent conversation history, user preferences, and relevant data.
- Structure your inputs: Convert that messy calendar data into clear schemas. Conflicting events, travel time between meetings, and time zones
- Active retrieval: Let the agent ask for what it needs. "I see a potential conflict. Should I check your Thursday availability too?"
- Preprocess intelligently: Don't make your agent parse timestamps. Give it "Meeting starts in 2 hours," not "2024-03-15T14:00:00Z"
The brutal truth: 80% of agent failures happen here. They're not reasoning poorly. They literally don't see the full picture. Add quality context. Better the context, better the perception.
š PERCEPTION EVOLUTION:
āā Level 1: "Schedule lunch with Sarah at 1 pm tomorrow" + calendar JSON
āā Level 2: + meeting history + preferences
āā Level 3: + CRM data + traffic + conflicts
2. š§ Reasoning: Where the magic happens (or doesn't)
This is the "brain," but let's be real. It's usually more like a decision tree having an identity crisis.
In production, reasoning is never pure. It's a messy mix of patterns:
- Start with a checklist (linear)
- Hit something weird? Branch out and explore options
- Still confused? Step back and reflect on what went wrong
But here's what actually matters: reasoning isn't about being smart. It's about being smart enough within your constraints. Your production agent has 3 seconds before the user bounces. Perfect reasoning that takes too long is worse than good-enough reasoning that ships.
The agents that survive in production are the ones that know when to stop thinking and start doing. This comes from smart prompting and the agent architecture you choose. We'll explore this in depth in the subsequent parts of the series.
3. ā” Action: Where things get real
Actions are where your agent touches the world. And this is entirely about the tools you give it.
You've probably heard about the tool ecosystem. LangChain, LlamaIndex, and now everyone's excited about MCP (Model Context Protocol) for standardizing tool interfaces. But here's the reality: tools are just functions your agent can call. The complexity isn't in the tools. It's in knowing when and how to use them.
Your calendar agent's toolkit might include:
- Google Calendar API: Create, modify, check availability
- Email service: Send invites and confirmations
- Maps API: Calculate travel time between locations
- CRM integration: Pull client context
But here's the critical distinction nobody talks about:
- Reversible actions: Check availability, draft an email, calculate travel time
- Irreversible actions: Send the invite, block the calendar, notify attendees
Smart agents know the difference. They'll query availability from multiple angles but pause for confirmation before actually sending that CEO invite.
The tools define what's possible. The agent's judgment defines what's wise to use.
4. š Feedback: The reality check
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Self-reflection: Agent validates itself
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Peer review: Another agent checks
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Human gates: Explicit approval
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Behavioral: What happens next
This is what separates an actual agent from a glorified prompt. Without feedback, you're just throwing spaghetti at the wall with your eyes closed.
In production, feedback comes from four sources:
1. Self-reflection: The agent checks its own work
- "Did I book this in the right timezone?"
- "Does this conflict with any standing meetings?"
2. Peer review: Another agent validates the output
- A QA agent reviews the calendar entry for obvious mistakes
- A compliance agent checks if the meeting follows company policies
3. Human in the loop: Explicit human feedback
- User confirms: "Yes, book it" or "No, that doesn't work"
- Admin reviews and approves high-stakes actions
4. Behavioral signals: Implicit feedback from what happens next
- User immediately cancels the meeting = probably wrong
- User adds more attendees = probably right
- No response for days = might be wrong time/date
The cruel reality? The clearest feedback is often the most expensive (human review), while the cheapest (self-reflection) is the least reliable. Production agents need a mix. Automatic checking for obvious errors, human gates for critical actions, and behavioral tracking to improve over time.
The bottom line:
Every agent is just this loop:
- Perception = what it sees (and how clearly it sees it)
- Reasoning = what it thinks (within real constraints)
- Action = what it does (through the tools you give it)
- Feedback = what it learns (from systems, humans, or behavior)
Master this loop, and you can debug any agent. Ignore it, and you're just praying to the AI gods.
But this is just the foundation. In the rest of this series, we'll go deep into what actually makes agents work in production:
Part 2: Architectures + Evals: The System Behind the System
Part 3: Prompting as Control, Not Decoration
Part 4: Memory, Tools, and Feedback Loops
Each part will give you the practical patterns that work, the pitfalls that don't, and the engineering decisions that separate toy demos from production systems.
