What is the context layer?

The operational knowledge an AI agent needs to work well in one business, covering how that business runs, its patterns, where its exceptions live, and its constraints.

How does it work?

The essay applies Christensen’s Law of Conservation of Attractive Profits. When one layer of the stack commoditizes, the layer next to it captures the lost margin. Foundation models are commoditizing SaaS applications, and value is moving to the context layer. Context that holds value is accumulated over time, specific to one business, and gets better with use.

Where does the human gate sit?

TODO(chris): the essay does not say where human review or approval sits for agents that draw on the context layer. Add that or drop this section.

What does it change for the team?

A context layer system is an operational purchase, not an IT purchase. The buyer is the functional leader who owns the outcome. A CFO buying one for accounts receivable compares it to the cost of people supplying that context by hand. Vendors sell outcomes tied to operational metrics, not seats tied to headcount.

Which essays cover it?

• The Context Layer Is Eating SaaS

@misc{couch2026whatisthecontextlayer,
  author = {Couch, Chris},
  title = {What is the context layer?},
  year = {2026},
  howpublished = {Lead to Cash},
  url = {https://chriscouch.ai/what-is/context-layer/}
}