Transcription
If you've been avoiding Claude Code because it sounds like it's something too complex, you're making a huge mistake. Because here's the thing, Cloud Code is not just a coding tool. It's now, in my opinion, the most powerful way to use AI for your business. And you don't need to write a single line of code to actually use it.
Now, I'm not a developer, but I've been running an online business for over 12 years now, and Cloud Code has now become the primary tool I use to run my business every single day. So, in this video, I'm going to show you how to set up Cloud Code, the best ways to use it as a beginner, and then show you what you can build with it without writing a single line of code yourself. I know nothing about coding.
All right, so before I show you anything, let me answer the question I know most of you are asking. If you've been using Claude Co-Work, why bother with Cloud Code? Here's the short answer. Cloud Code is the more powerful, more stable version. And there are two differences that actually matter for your day-to-day work.
The first one is context window. When you use Co-Work, you get a 200,000 token context window. Claude Code with Opus 4.6 or Sonnet 4.6 gives you a million token context window. That's roughly five times-ish more working memory per conversation, if you will. That means with Cloud Code, you can hold a much longer, much more complex conversation with more knowledge files if you're using them before it starts losing track of things. If you've ever had a Co-Work session where Claude starts getting confused, contradicting itself, or the quality just drops, that's the context window filling up. With Cloud Code, though, it's going to take a lot longer until the context window fills up.
The second difference is control. For example, in Cloud Code, you can see exactly what Claude is reading, what files it's touching, exactly how much of the context window you've used in your chat window, and you can steer it in real time. You have three permission modes that let you decide how much autonomy that you want to give to Claude. Co-Work gives you less visibility into all of that. These are the two things that matter most in my opinion. Larger context window and a lot more control and flexibility.
Now, real quick, if you're watching this and thinking, I just want to do more of the work that only I can do in my business and have everything else handled by AI. Well, I built an app for that inside my AI Playbook membership community, and it's called Your Zone of Genius App. In the app, you get a complete AI team that takes care of everything in your business that isn't in your zone of genius. It's completely customizable and personalized to you and your business. There's a free 7-day trial to the app and the community, which I'll link to in the description below.
Okay, now let me show you how to get started with Cloud Code and access it. And there are several ways to do that. I'm going to show you three of them, with the third way being the one that I recommend using and the way that I access Cloud Code every single day.
And the first way is through the Claude desktop app. If you already have the Claude desktop app on your computer, then you're just one click away. See this button right up here at the top? You have Chat, Co-Work. You just click Code right here and you are in Cloud Code.
The second way is through the terminal on your computer. So I'm in terminal right here. I can just type in `claude`. I've already installed Cloud Code, if you will. And now I am accessing Cloud Code right here inside the terminal. And this is what really scares a lot of people. It looks very techy. There's like not a whole lot to it. By the way, I'll share the link to this page in the description below. But this Cloud Code docs from Anthropic walks you through exactly how to get started in terminal here.
Now the third way for accessing Cloud Code is through VS Code, Visual Studio Code. And I love VS Code. It's a free app that you download to your computer. It's not just Mac only. Think of it as a workspace where you have easy access to all the files that you want to give Claude access to, and Claude can see every single one of them. Here's what I mean. I'm inside of VS Code right now and I can see all my files and folders that I've given Claude access to. So, for example, I can go down here to my newsletter project and I can see all of the drafts, and Cloud Code has access to all of these files. It can read them. It can edit them. It can create new files and folders all by itself, which we'll be doing here in this video.
And when you download VS Code and you open it for the first time, this is a screen like you're going to see. The first thing you're going to want to do is you're going to want to go to these looks like stacking boxes and you're going to want to search on Claude Code. And I already have it obviously installed, but you're going to click this right here. And then if you don't have it installed, you're going to want to click on install.
The second thing you're going to want to do is give it access to a specific folder and files on your computer. So you just click the "Open Folder" option here. And for me, I have a Cloud Code folder on my computer. And then from here, you just select whichever folder you want to give it access to. So, for example, this is the exact same thing that you just saw in my VS Code. Cloud Code has access to all these files and folders. And then once you've done those couple of things, you're ready to go. You just click on the little Claude icon here. And then this is what it looks like to use Cloud Code right inside of VS Code.
So, for me, why VS Code over the desktop app and the terminal? Well, three reasons. First, immediately you get to see your files and folders. Like I mentioned, when you open a project folder in VS Code, Claude has access to everything in it. Second, you can watch Claude work. When Claude reads a file or creates something new, you see it happen right there in the sidebar. And third, this is probably the biggest one for me, everything stays organized. When Claude makes a new file, for example, it saves it right into your project folder that you're working on, not in some chat thread that you're going to lose and have no idea where it is.
Now, one thing I want to address before we go further, because I know some of you are probably thinking it, "Rick, what if I don't want Claude just changing my files without asking?" That's totally fair. Or by giving Cloud Code access to a specific folder on your computer, does that mean you're opening up your entire computer, all the files on your computer to Cloud Code? No, you're only giving it access to the file and folders that you designate. And as I mentioned before, another big differentiator that I like Cloud Code so much better than Co-Work. It has these three modes.
So, you have a lot more control over what Claude's actually doing on your behalf. And it defaults to "Ask Before Edits." Claude tells you what it wants to do, and then it will wait for your approval before it makes any changes to whatever you're asking it to do. If you're brand new to Cloud Code, I recommend starting right here. You're going to be completely in control. Then you've got "Edit Automatically," which is pretty much what it says. It will automatically go and do whatever it is that you're asking it to do. Then you've got "Plan Mode," which is what I highly recommend that you start out with. This is where Claude lays out a full plan before doing anything. Then you've got "Bypass Permissions," and this is a setting that you need to turn on. I would only, only use this if you fully trust everything that Claude is doing in whatever it is that you've asked it to do. But nine times out of 10, I do recommend that you start with Plan Mode rather than "Ask Before Edits" because again, Claude will give you a full plan for how it will solve whatever it is that you're asking it to do.
And one more thing before we go any further here in the video, a big, big differentiator between normal Claude chat and Claude Code. Don't ask Claude how to do something. That's something that you would do in Claude chat. Tell Claude to do it. So, for example, instead of typing, "How do I create a welcome email for new clients?" Instead, you type in, "Create a welcome email template for my new coaching clients. Use a warm, professional tone. Include a section for login credentials."
And notice I have Plan Mode on. So, I'm going to let Claude go on this. And notice I was super vague in the prompt here. So, it's asking me some clarifying questions, which I'm glad that it's doing that before writing anything. So, it's asking me what type of coaching this is for because it knows my business. By the way, your questions would look different. And I highly recommend that you use a tool like WhisperFlow, or it's called Flow now, which I'll link to in the description below, which are voice-to-text tools. So, you can just speak into a microphone or into your computer and it will type out. Cloud Code is great just having a conversation with it and telling it what you want it to do.
Okay, now that we've got Cloud Code set up inside of VS Code, let me show you the first thing you should set up before you actually start using Cloud Code. And there's a file called the `claude.md` file. I've talked about it quite a bit here on the channel in recent videos. It's basically an instructions document for Claude, both for your global Claude account and at the individual project level. And I'm going to show you two different examples of what I mean here. The cool thing is is you write it once, and Claude reads it automatically at the start of every conversation. So instead of re-explaining your business, your preferences, your rules for how you do things in your business every single time, you write them once in a `claude.md` file, or better yet, have Claude write them for you. And Claude always knows them.
So, what actually goes into a `claude.md` file? Well, I like to look at four different categories, if you will. The what, the why, the who, and the how. So, the what, for example, is what you're working on, what tools you use, how your files are organized. The why is why things are set up the way that they are. This helps Claude understand your reasoning, not just facts. For the how, this is how you want Claude to work with you. Should it be asking you before making changes, for example? How much should it explain to you, etc., etc. And then the who is your background, how you like Claude to communicate, how much detail that you want.
Here's an example of a global `claude.md` file where I have "About Me," "How I Work," "Tools and Tech Stack," "Communication Preferences," "Recurring Context." This is just made up, by the way, for me. So that's your global Claude account `claude.md` file. You're also going to want a `claude.md` file for each of your projects. So let me just go back to the newsletter project that we looked at earlier. So, I'm going to open that up and I'm going to find my `claude.md` file, which is right here. And so, this for example is my `claude.md` file for my newsletter project. So, "How the system works," "Hard rules before drafting," "Topic discovery sources," "Reference files," "Skills."
And here's a cool hack for creating `claude.md` files. If all this feels a little overwhelming, you don't even have to write this yourself. So, here's what to do. Type this prompt into Cloud Code: "I want to create a `claude.md` file for a new project. If you want to create one for the global account, you can just say 'I want to create a `claude.md` file.' Interview me with one question at a time to learn about my project, my preferences, and how I like to work. Then create the file based on my answers."
So I'm going to click on "Go." And you're going to see it's going to start interviewing me. So, first question: "What's the project? Give me a brief description of what it is and what it does." The project is showing how to build a `claude.md` file for a YouTube video. So then it's asking me, "What directory or repo is this project in, or do you want me to create a new one?" And this is where another reason I love having all of my files and folders right here in the left-hand column here, because it's asking me where I want the `claude.md` file to live. So, for example, these are all my Obsidian. These are again on my computer. These are all my projects. And then I'm not going to go through every question right now, but you get the idea here. You just, it's Claude interviewing you. Pretty cool, right?
And you can update it over time. That's the idea. At the end of a long session, for example, you can just ask, "Based on our conversation today, what should we add to my `claude.md` file?" and Claude will suggest updates to you to add to the `claude.md` file. So, the file is getting better and better and more useful over time.
All right, now let me show you something that completely changed how I use Cloud Code. This is called a Claude Skill. I've done lots of videos, actually. I'll link to the Claude Skills video right here. And a skill essentially is a saved set of instructions on how you do a task. So, instead of explaining what you want every single time you talk to Claude, you write the instructions once, or again, have Claude write the instructions for you, save them as a slash command. I'm going to show you this in a second. And then you just type that command whenever you need it.
So, let me show you one of my skills. I use this every single week, and this is my newsletter skill. So, I'm just going to type in `/` and start typing in "newsletter." Click on "Newsletter," and it is going to go through. It's going to read the `claude.md` instructions for that newsletter project. Now, it says, "Good. I've read everything. A few quick questions before I start." And the reason it's asking me these questions is because I've told it to ask me these questions in the newsletter skill that I've created. So it's saying, "Okay, a few quick questions before I start. Do you have a topic in mind?"
Now, for the topic in mind, let's just say that I don't have a topic in mind. I'm going to ask it to resurface some of the suggestions it gave me in past weeks. "I don't have any particular topics in mind right now. Please resurface some of the topic ideas that you've given me in the past two weeks that I have not used yet." And so, as you can see here, it checked the recent drafts and the project log to find unused topic ideas that it had already given me. And it says here they are. So, it's given me six different topic ideas that I can choose from. And let's just say I wanted to write a newsletter on number four. So, I'm just going to type in "four."
So, then it's going to ask me a few follow-up questions because again, we are collaborating on this newsletter because of the instructions I've given it in the skill. And here's a quick tip, by the way. When you're creating a skill, make sure that before you create a skill, you actually do the task first yourself. So, you have Claude help you do it. And then once you're happy with the workflow and the output that it's giving you, etc., etc., then you can just simply tell Claude, "Turn this workflow into a skill so that I can come back to it whenever I want to without having to re-explain everything to you." And then it will just create the skill for you.
And then here's a draft example. It's not that specific one I just did, but this is when I'm recording this. This is last Sunday's newsletter. And what I've just asked it to do is this part of the email right here in the "What I am seeing" section. So it writes this part right here. And these other sections of the newsletter just get pulled in from, uh, my team and so forth. All from one slash command. I typed one word, and Claude just reads the reference files, asks me the right questions, and then starts writing a newsletter draft in my voice, in my format, saved in exactly the folder that I've asked it to. And that's exactly what a skill does. And I have a bunch of these, as you can see. So I just typed in forward slash, and you can see "Add App Access," "AI Digest." So this one will look at my Gmail AI newsletters folder and do a summary of specific newsletters in there and then send me a Slack message.
Now, there's a lot here. I didn't build all these in one day. I started with one, and then I added another one when I noticed that I was doing the same thing over and over and over. And that's how you do it.
And here's another use case of something I did recently where Cloud Code made it super easy to do. And I've been wanting to fix the onboarding experience in my AI Playbook membership for a long time. So the first thing I'm going to do is I'm going to make sure that I'm using the Opus 4.6 model. So I'm going to type in `/model`. And this is where you can switch the model. So I can click on "Switch Model." And this is where you can choose from the Opus 4.6 with a million token context window, like we talked about before. So I'm going to click on "Opus." I'm going to type in, "Based on my ICP needs." Now, I interviewed a whole bunch. I have hours of interviews with my ICP for my community, and I have a transcript analysis that Cloud Code helped me do, and that is a file that I have over here in my Obsidian. So I've just given it access to that file, and then I said, "Give me your best recommendations on how best to create a clear path for new members in the classroom in the school membership." I can say "classroom," I can say "school membership" because it has memory of me. It knows what that means. Then I say, "Also review the transcripts from this file here." So, I'm giving Claude access to transcripts of my calls with my coach. And then before I hit go, I want to make sure that I'm using Plan Mode. So, it tells you what it's going to do first. "Let me first read the ICP research and the meeting transcripts first with my coach because I've told it to do that."
And I want to point out something really, really cool that I think that it did without me telling it. It read the onboarding email sequence as a markdown file that is over here in my project files. It read that all by itself. So, it's using that as reference. Then after a minute or so, it gave me a full recommended list of things to do. Then I asked it to give me a prioritized to-do list for this restructure. So again, it's given me a complete plan. Claude didn't guess. It read what my actual members said in their own words. It identified the patterns. And this is really where Cloud Code just feels different for me. This isn't one prompt and done. This is a conversation where Cloud Code is collaborating with me. And then not only is it giving me the output here, it's also created a file, a markdown file of this output right over here in my project folder under "AIP Classroom Cleanup." And this is exactly what the file is that it just created here. So now that this file is created, I can point Cloud Code at it whenever I want it to do. And this for me is just one small thing that is the Cloud Code difference. The conversation doesn't disappear. The work stays. It's easily accessible.
All right, let's pull this all together. We talked about here today. Cloud Code is going to give you is five times more working memory than Co-Work. You have access to million token context windows between Sonnet 4.6 and Opus 4.6 in Cloud Code. VS Code puts everything right in front of you. Your files, Claude's work, all of it in one place that you can easily access. The `claude.md` file means Claude knows your business from the first message of every conversation, and you don't have to write it yourself. You can have Claude write it for you. Claude Skills mean you never have to re-explain a workflow. The work doesn't disappear into a chat thread. It gets saved somewhere that you can actually use it next time. And again, you don't need to build all this at once. Start with the `claude.md` file. Then build one skill for something that you do every day or every week, and then you go from there.
If you're an online business owner and you're looking to leverage AI and get access to a full AI team that will take care of your day-to-day work, your 80% of the work that you do so that you can focus on your 20% zone of genius in your business. I want to invite you to join my AI Playbook community where you get access to my Your Zone of Genius App. I'll link to it in the description below. Thanks so much for watching today. I appreciate it. I'll see you in the next.