Why are Context Windows so important?

Rob Dumbleton and Chris Lloyd 2025-03-20
#product #executive

Introduction to Context Windows

Four/Four is an AI-powered software platform designed for B2B SaaS businesses to optimise product strategies and drive revenue growth through data-driven decisions. We record, transcribe, and analyse customer interactions, providing insights into user research and product development.

A key component in these processes is the use of context windows, which are like the memory of AI. Context windows help the AI understand and recall information during interactions. They determine how much information the AI can recall at any given time, influencing its ability to provide accurate responses.

Effective management of context windows is crucial for software solutions like Four/Four to deliver valuable insights and maintain high-quality outputs, especially during extended analysis sessions.

What is a Context Window?

Context windows in AI and large language models (LLMs) serve as the temporary memory that these systems use to process and retain information during interactions.

When an AI model receives input, this data is stored within the context window, allowing it to reference prior information and maintain coherence in ongoing conversations.

The context window essentially holds all relevant data, including the questions asked, the responses given, and any additional prompts or instructions. However, like our memory it has a finite capacity, meaning there's a limit to how much data it can store at once. When the information provided exceeds the window's maximum size, the AI model may truncate older data or summarise it to fit new data, which could lead to the loss of detail over time.

One significant limitation of context windows is their impact on memory retention during lengthy interactions. As the conversation progresses and fills up the window, the model has to decide which details to retain or compress, potentially losing track of earlier points. This can undermine the quality of the outputs, especially if crucial data is forgotten or abbreviated inaccurately.

Another limitation arises when handling varied data formats simultaneously. Context windows may struggle to differentiate between different types of information unless appropriately structured, leading to errors or lower fidelity responses. Efficient data management and thoughtful input structuring are vital to maximising the effectiveness of context windows in AI applications.

Reaching the window limit

Once the window's limits are reached the model will reject the request outright. The developer must decide which information to retain, summarise, or discard, potentially losing valuable details from earlier parts of the conversation.

This management process can lead to inaccuracies, as the model might overlook critical context or simplify information that changes its original meaning. The loss and compression of data within the context window could result in misinterpretations and lower quality answers, impacting the user experience and the usefulness of the output.

AI can also hallucinate, especially when overwhelmed with large or unstructured inputs that challenge its ability to stay on track. Properly structuring inputs can mitigate these issues, but the inherent limitations of context windows remain a key factor in determining the quality of AI outputs in extended interactions, or working with a large input.

Managing Context Windows

To manage large amounts of data with limited context windows, several techniques are used to maintain output quality:

Data summarisation: Breaking down extensive data into smaller, relevant summaries. This involves condensing each data segment (like chapters of a book or sections of a transcript) into concise summaries. The summarised segments can then be collectively summarised again, a technique known as "summary of summaries". This approach enables the AI to process broad contexts without exceeding window limitations, offering a coherent view of the whole dataset in a manageable form.

Incremental updating: Gradually updating the context window by prioritising the most critical information. As new data enters, older information is evaluated for significance. Important elements are retained or summarised, while less relevant parts are compressed or discarded. This ensures that the AI continues to have access to crucial context throughout the interaction.

Structured formatting: Clear structuring of data formats to enhance the AI's ability to distinguish between different types of information. Using timestamps, labels, and consistent formatting helps the AI effectively navigate and process the information within the context window.

Expanding window capacity: Advances in technology are increasing available context window sizes. This expansion allows larger blocks of data to be processed simultaneously, reducing the need for aggressive summarisation.

By integrating these techniques, Four/Four can effectively navigate the constraints of context windows, ensuring that AI interactions and data analyses remain robust and informative.

Challenges with data structuring

Structuring input data significantly enhances the quality of AI outputs by providing clarity and context that guide the model's understanding and processing abilities. Here’s how it works:

Improved understanding: Structured data offers clear cues about the information's organisation, such as headers, timestamps, labels, and categories. This helps the AI model differentiate between various data segments and understand their relevance, reducing the chance of errors.

Enhanced accuracy: When input data is well-organised, AI models can more easily focus on essential elements without getting confused by irrelevant or noisy information. This leads to more precise outputs, whether it's extracting key insights, categorising feedback, or following a set of instructions.

Efficient processing: Structured input enables the model to process information quickly and efficiently, making it easier to handle larger volumes within context windows. The AI can more easily stay on-track, follow instructions as requested and not get distracted.

Consistent high-quality output: Requesting the model emit machine-readable outputs in formats such as Markdown, JSON and CSV that can be directly used in further analysis or integrated into other systems.

Overall, structured input data ensures that context windows are used optimally, leading to high-quality and useful output.

Practical applications

Four/Four manages the context window in several ways to refine product management and research strategies:

Customer interaction analysis: In analysing customer feedback, Four/Four processes conversation transcripts and provides necessary structure for the model. For example, during product demos or feedback sessions, we help the AI model understand the sequence of customer queries and responses, providing persona and historical context, leading to more accurate sentiment analysis and identification of key customer pain points.

Feature validation: When prioritising new product features, Four/Four evaluates the cumulative feedback across multiple customer interactions, and providing a structured format for the window. By summarising key points from various conversations, the AI can identify the underlying themes, which helps in validating which product features are most desired by users.

Market segmentation: Four/Four segments markets according to the filters the user requests, this enables us to send a specific slice of the research data to the model to get results specific to that industry, market or other segmentation method. This makes the responses much more specific and the user can identify patterns in usage, preferences, and challenges faced by different user groups.

Resource integration: Four/Four extracts and presents relevant CRM data, giving the model valuable context about the people involved in the discussion, and the nature of their relationship with the company, which results in higher quality output from the user's perspective.

By managing context windows strategically, Four/Four enhances product management by focusing efforts on validated problems, features and user-centric design. At the same time, research processes benefit from refined data handling, leading to insightful market segmentation and more efficient resource allocation.

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