Retrieval-Augmented Generation (RAG) systems, while conceptually simple as pipelines that chunk data, embed it, retrieve matches, and generate answers, are complex in practice due to the interconnected nature of their components. Effective RAG optimization requires establishing a rapid evaluation loop to iterate configurations quickly and safely, enabling systematic evaluation of changes in chunking strategies, embedding models, and retrieval techniques. Tools like Kiln AI and LanceDB facilitate this process by allowing users to create evaluation datasets, test various configurations, and promote them to cloud environments. The optimization process involves improving each layer sequentially, beginning with data extraction and followed by chunking, embedding, retrieval, and generation, ensuring that each layer is solid before proceeding to the next. Key considerations in RAG optimization include using clean and structured data, selecting appropriate chunking strategies, and choosing the right embedding models and retrieval methods, such as hybrid retrieval combining vector and keyword-based search. The success of RAG systems hinges on accurate evaluation, which measures correctness, hallucination rates, context recall, and operational metrics like latency and cost. By embracing an iterative, evidence-based approach, RAG systems can evolve from merely functional to highly optimized, adaptable tools.