Behind the Craft

Behind the Craft

Podcast

Hermes Co-Founder on Building an AI Agent That Improves Itself | Karan Malhotra

How Hermes keeps your context portable across models, builds and cleans up its own skills, and helped Karan modify his childhood Sonic game

Peter Yang's avatar
Peter Yang
Aug 02, 2026
∙ Paid

Dear subscribers,

Today, I want to share a new episode with Karan.

Karan is the co-founder of Nous Research, the company behind Hermes, the #1 personal agent and AI app on OpenRouter. We had a great chat about why open-source AI must win and how Hermes gets better the more you use it. Karan also shared a live demo of how he used Hermes to modify his favorite childhood game.

Watch now on YouTube, Apple, and Spotify.

Karan and I talked about:

  • (00:00) How Hermes differs from Claude Code and Codex

  • (02:20) Why every AI model now sounds exactly the same

  • (11:16) How to stop AI from saying “you’re absolutely right”

  • (15:16) How Hermes creates skills without bloating its context

  • (16:40) The open vs. closed-source debate on AI safety

  • (23:40) Using one Kanban board for humans and AI agents

  • (26:45) Demo: Rebuilding a childhood Sonic world with Hermes

  • (36:07) How two Discord friends started Nous Research

  • (42:40) How Hermes became its own biggest contributor


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Top 10 takeaways I learned from this episode

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What other AI co-founder uses an agent to mod his favorite childhood game? Watch Karan demo how he mods Sonic Adventure 2

How to make Hermes work for you

  1. The “personal” in personal agent is not the model. Instead, it’s the agent’s memory of your conversations and the skills that you’ve built with it. Karan barely notices any difference in Hermes’ personality when he swaps models because his agent has accumulated so much context about him. The model is interchangeable, but the context layer is what you should cherish and preserve.

  2. Customize Hermes’ soul.md to the personality that you want. After using Hermes for 6+ months now, I’ve customized its soul.md to have:

    • Core truths like be genuinely helpful and avoid sycophancy.

    • Boundaries like respecting my privacy especially in any group chats.

    • The right vibes that make it fun to talk to.

    Here’s my complete soul.md that you can copy and paste into Hermes or another AI agent to improve its personality:

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