Product Strategy: Skills vs MCP and Market Positioning

Date: October 27, 2025
Context: Strategic discussion about Obsidian MCP Server architecture, Skills integration, and market positioning

Key Insights

1. Skills Cannot Replace MCP Servers

Core Distinction:

MCP Servers: Execute code, access filesystem, return dynamic data, maintain state
Skills: Read-only documentation that Claude reads at runtime to improve tool usage

Skills with executable code exist (using bash_tool), but converting our tools would be strictly worse:

❌ Lose security sandboxing (path traversal protection)
❌ Lose stateful sessions (active vault tracking)
❌ Lose type safety (parameters become string parsing)
❌ Lose structured errors (get Python tracebacks instead)
❌ Lose UI integration (tools hidden in markdown)

Verdict: Keep all 22 MCP tools as-is. They’re core infrastructure, not utilities.

What Skills Should Provide

Skills complement MCP servers by providing workflow patterns and best practices without bloating the context window.

Recommended Skill Structure

# /mnt/skills/user/obsidian-vault/SKILL.md
 
## Core Workflow Patterns
 
### Pattern 1: Discovery Before Retrieval
✅ search_obsidian_notes → verify → retrieve
❌ retrieve directly → FileNotFoundError
 
### Pattern 2: Token-Efficient Content Search
✅ search_obsidian_content (snippets) → selective retrieval
❌ list_all → retrieve_all (burns tokens)
 
### Pattern 3: Structured Edits
✅ append_to_section_obsidian_note
❌ retrieve → modify → replace (expensive)

What Skills add:

📚 Multi-step workflow examples
📚 Token efficiency patterns
📚 Vault-specific conventions
📚 Error recovery strategies
🔧 Specialized utility scripts (backlink analysis, etc.)

What Skills don’t replace:

Core CRUD operations
Security validation
Session state management
Type-safe parameters

Market Positioning Strategy

The Rebrand Question

Decision: Keep “Obsidian MCP Server”

Why?

SEO & Discoverability: “Obsidian MCP” has high search volume
Marketing > Technical Accuracy: Obsidian has 1M+ users as distribution channel
Code is already universal: Works with any markdown folder (Logseq, Foam, Dendron, plain folders)
“PKM” is niche: Most people don’t know the abbreviation
Positioning: “Obsidian-compatible” rather than “Obsidian-exclusive”

Strategy:

Keep the Obsidian brand for discoverability
Clarify in README that it works with any markdown system
Use “vault” terminology (clearer than “workspace” or “folder”)
Position as “Built for Obsidian, works universally”

Competitive Analysis

What Actually Exists

Generic Filesystem Servers:

Basic CRUD (read_file, write_file, list_directory)
❌ No markdown awareness
❌ No structural operations

Obsidian Local REST API Servers:

Requires Obsidian running
❌ No heading-based operations
❌ Limited functionality

Other Markdown Servers:

Basic CRUD only
❌ No vault concept
❌ No multi-vault sessions
❌ No frontmatter tools

Our Unique Value Proposition

Only server with:

✅ Heading-based structural editing (semantic, not line-based)
✅ Token-efficient snippet search (preview before full retrieval)
✅ Multi-vault session management (stateful context)
✅ Frontmatter as first-class citizen (YAML manipulation)
✅ Backlink updating on move/rename
✅ Works without Obsidian running
✅ Security built-in (path traversal protection, vault sandboxing)

Key Differentiator: Markdown-native operations vs. treating .md files like .txt

Token Economics

Current Tool Definition Cost

22 tools × ~400 tokens/tool = ~8,800 tokens
Loaded once per session and cached
This is negligible compared to:
- Conversation history: ~20K tokens
- Single note retrieval: ~5K tokens
- Claude’s system prompt: ~50K tokens

Conclusion: Tool definitions aren’t the bottleneck. Skills optimize supplementary documentation, not core tool defs.

Token Efficiency by Design

Example: Content Search

Full retrieval of 10 notes: ~50,000 tokens 💸
Snippet search with our server: ~1,500 tokens ✅

Pattern:

search_obsidian_content("machine learning")  # Returns snippets
# Review snippets, identify best 1-2 matches
retrieve_obsidian_note("AI/ML Notes")  # Full content only for relevant notes

Updated README Strategy

New Tagline

# 🧠 Obsidian MCP Server
**Structure-aware markdown operations for Claude Desktop**
 
> Built for Obsidian, works with any markdown folder. The only MCP server with 
> heading-based editing, token-efficient search, and frontmatter as a first-class citizen.

Key Sections to Add

1. “Why This Server?”

Comparison table showing:

Generic server: Replace entire file
This server: insert_after_heading (semantic)

2. “What Makes This Different”

Five unique capabilities:

Heading-based navigation (stable semantic anchors)
Token-efficient by design (snippet search)
Multi-vault sessions (stateful context)
Frontmatter as first-class (YAML manipulation)
Security from day one (sandboxing, validation)

3. “Comparison with Other Solutions”

vs. Obsidian Local REST API
vs. Generic Filesystem Servers
vs. Other Markdown Servers

4. “Who Should Use This”

✅ Obsidian, Logseq, Foam, Dendron users
✅ Anyone with markdown notes
✅ Developers building PKM automations
❌ Not for: Binary files, real-time collaboration

5. “Compatibility”

Examples showing vaults.yaml config for:

Obsidian vaults
Logseq graphs
Foam workspaces
Plain markdown folders

Distribution Strategy

Current Situation

✅ Great product built
✅ Genuinely unique features
✅ Solves real problems
❌ Bottleneck: Awareness

Action Plan

1. Update README (use new positioning)

2. Create Demo Assets

GIF showing heading-based insert in action
Before/after comparison with generic server
Token savings visualization

3. Community Outreach

Obsidian Forum: “MCP Server for Structure-Aware Vault Operations”
r/ObsidianMD: “I built an MCP server with heading-aware operations”
Twitter/X thread: Technical breakdown with examples
MCP Discord: Announce new server
Anthropic’s MCP servers list: Submit for inclusion

4. GitHub Optimization

Topics: obsidian, mcp, claude, markdown, pkm, knowledge-management,
        note-taking, obsidian-md, anthropic, fastmcp

5. Content Strategy

Blog post: “Building a Markdown-Native MCP Server”
Use cases: Daily journaling, research notes, vault reorganization
Technical deep-dive: Why heading-based > line-based
Respond to “automate Obsidian” posts with link

Real-World Workflow Examples

Daily Journaling

User: "Add today's gratitude entry"
→ append_to_section_obsidian_note(
    "Daily/2025-10-27",
    heading="Gratitude",
    content="- Morning productivity"
  )

Research Note Management

User: "Find notes about transformer architecture"
→ search_obsidian_content("transformer")
→ Review snippets
→ retrieve_obsidian_note("AI/ML Fundamentals")  # Only relevant match

Vault Reorganization

User: "Move 'Old Project' to Archive"
→ move_obsidian_note(
    "Projects/Old Project",
    "Archive/Old Project",
    update_links=True  # Updates backlinks automatically
  )

Implementation Decisions

✅ Keep as “Obsidian MCP Server”

Better SEO and discoverability
Obsidian community as distribution channel
Code already works universally
Just clarify compatibility in docs

✅ All 22 Tools Stay in MCP

They’re core infrastructure, not utilities
Security, state, type safety all depend on MCP
Token cost is negligible (~9K, cached)
Converting would be strictly worse

✅ Add Skills for Workflow Patterns

Multi-step workflow examples
Token efficiency best practices
Vault-specific conventions
Specialized utility scripts (optional)

✅ Focus on Distribution

Product is great, awareness is the gap
Multi-channel outreach (forum, Reddit, Twitter)
Demo assets to show the magic moment
Position uniqueness clearly

Next Steps

[ ] Update README with new positioning and comparison table
[ ] Create demo GIF showing heading-based insert
[ ] Write Obsidian forum post (technical audience loves this)
[ ] Post to r/ObsidianMD with demo
[ ] Create Skills file with workflow patterns
[ ] Submit to Anthropic MCP list
[ ] Twitter thread announcing features
[ ] Blog post on development journey

Updated README Draft

# 🧠 Obsidian MCP Server
 
**Structure-aware markdown operations for Claude Desktop**
 
> Built for Obsidian, works with any markdown folder. The only MCP server with 
> heading-based editing, token-efficient search, and frontmatter as a first-class citizen.
 
[![Python](https://img.shields.io/badge/python-3.11+-blue.svg)](https://www.python.org/downloads/)
[![FastMCP](https://img.shields.io/badge/FastMCP-latest-green.svg)](https://gofastmcp.com/)
[![License: MIT](https://img.shields.io/badge/License-MIT-yellow.svg)](LICENSE)
 
> **📚 Technical Deep Dive:** [Read the full development journey](https://nbaradar.github.io/the-latent-space/Personal-Projects/Obsidian-MCP-Server/Obsidian-MCP-Server)
 
---
 
## Why This Server?
 
**Generic filesystem servers** treat markdown like text files.  
**This server** understands markdown structure.
 
| Operation | Generic Server | This Server |
|-----------|---------------|-------------|
| Add content | Replace entire file | `insert_after_heading` |
| Find notes | Full-text search | Snippet preview → selective retrieval |
| Update metadata | Parse YAML manually | `update_obsidian_frontmatter` |
| Rename notes | Just move file | Move + update all backlinks |
 
**Result:** 10× fewer tokens, semantic operations, no fragile line-number edits.
 
---
 
## What Makes This Different
 
### 1. 🎯 **Heading-Based Navigation** (Unique)
Traditional editors use line numbers—they break when content changes.  
This server uses **semantic anchors** (headings) that remain stable.
 
```markdown
## Meeting Notes
Content here
 
### Action Items
- Task 1

With this server:

append_to_section_obsidian_note(
    title="2025-10-27",
    heading="Action Items",
    content="- New task"
)

→ Adds task in the right place, no line counting

2. 💰 Token-Efficient by Design (Unique)

Searching 10 notes with full retrieval: ~50,000 tokens 💸
Searching with this server: ~1,500 tokens ✅

search_obsidian_content("machine learning")
# Returns snippets with context, not full files
# Then retrieve only the 1-2 relevant notes

3. 🔄 Multi-Vault Sessions (Unique)

set_active_vault("work")
# All subsequent operations use work vault
# No need to repeat vault parameter

→ Stateful context that persists

4. 📋 Frontmatter as First-Class (Rare)

update_obsidian_frontmatter("note", {"draft": false})
# Merges into existing frontmatter
# Preserves other fields
# Validates YAML structure

5. 🔒 Security from Day One (Critical)

Path traversal protection
Vault sandboxing
No arbitrary filesystem access
All operations logged

Comparison with Other Solutions

vs. Obsidian Local REST API

Their approach: Requires Obsidian running, limited operations
This server: Works offline, full structural editing

vs. Generic Filesystem Servers

Their approach: Treat .md files like .txt
This server: Markdown-native, structure-aware

vs. Other Markdown Servers

Their approach: Basic CRUD, no vault concept
This server: Multi-vault sessions, heading navigation, token efficiency

🔄 Compatibility

This server works with any markdown-based system:

Obsidian

vaults:
  my-vault:
    path: "/Users/you/Documents/ObsidianVault"
    description: "Primary personal vault"

Logseq

vaults:
  logseq-graph:
    path: "/Users/you/Documents/logseq"
    description: "Logseq daily notes"
    # Logseq uses journals/ and pages/ - works fine!

Foam (VS Code)

vaults:
  foam-workspace:
    path: "/Users/you/Documents/foam-workspace"
    description: "Foam workspace"

Plain Markdown

vaults:
  notes:
    path: "/Users/you/Documents/notes"
    description: "Any folder with .md files works"

Who Should Use This

✅ Obsidian users who want Claude to manage their vaults
✅ Logseq users who work with markdown files
✅ Foam/Dendron users with VS Code workspaces
✅ Anyone with a folder of markdown notes
✅ Developers building PKM automations

❌ Not for: Binary files, non-markdown content, real-time collaboration

🎬 Real-World Workflows

Daily Journaling

User: "Add today's gratitude entry"
Claude: append_to_section_obsidian_note(
    "Daily/2025-10-27", 
    heading="Gratitude",
    content="- Grateful for productive morning"
)

Research Note Management

User: "Find all notes mentioning 'transformer architecture'"
Claude: search_obsidian_content("transformer")
# Reviews snippets, identifies 2 relevant notes
# Retrieves only those 2, not all matches

Vault Reorganization

User: "Move 'Old Project' to Archive folder"
Claude: move_obsidian_note(
    "Projects/Old Project",
    "Archive/Old Project",
    update_links=True  # Updates all backlinks across vault
)

✨ Key Features

[Keep your existing features section]

🚀 Quick Start

[Keep your existing installation section]

🛠️ Available Tools

Management

Tool	Purpose
`list_vaults`	Discover configured vaults and current session state
`set_active_vault`	Switch active vault for subsequent operations

Core Operations

[Keep your existing tools table]

🏗️ Design Principles

1. Token Efficiency First

Every tool is designed to minimize context window usage:

Snippet-based search over full-content retrieval
Heading-based navigation over full-file reads
Combined operations over multiple tool calls

2. Markdown-Native Operations

Traditional editors use line numbers. This breaks with note edits. Semantic anchors (headings) remain stable as content changes.

3. Session-Aware Context

Claude can switch between vaults mid-conversation without losing state.

“Update my work vault… actually, check my personal vault first” — just works.

📚 Documentation

[Keep your existing documentation links]

🤝 Contributing

This project is in active development. Contributions, issues, and feature requests are welcome!

Particularly interested in:

Testing on Windows/Linux (currently Mac-focused)
Additional vault sources (Logseq, Roam integration examples)
Performance optimization for large vaults (10k+ notes)

📄 License

MIT License - see LICENSE for details.

🙏 Acknowledgments

Built with:

FastMCP by Anthropic
Model Context Protocol specification
Inspiration from the Obsidian community’s API work

📬 Contact

Nader Baradar

GitHub: @nbaradar
Blog: The Latent Space

Built because context matters, and markdown has structure.

```

Conclusion

Strategic Summary:

Keep “Obsidian MCP Server” name for SEO and distribution
All 22 tools stay in MCP (they’re core infrastructure)
Add Skills for workflow patterns and best practices
Focus on distribution: product is great, awareness is the gap
Position as unique: no other server has heading-ops + snippets + sessions

Unique Value: Markdown-native operations that understand structure, not just text.

Next Focus: Distribution and community outreach to reach the 1M+ Obsidian users who could benefit from this.

This note synthesizes a strategic planning session on October 27, 2025, covering Skills vs MCP architecture, competitive positioning, and go-to-market strategy for the Obsidian MCP Server project.

The Latent Space

Explorer

Explorer

Recent Notes

ContentEngine

ContextCore

ContextStore

Product Strategy: Skills vs MCP and Market Positioning

Product Strategy: Skills vs MCP and Market Positioning

Key Insights

1. Skills Cannot Replace MCP Servers

What Skills Should Provide

Recommended Skill Structure

Market Positioning Strategy

The Rebrand Question

Competitive Analysis

What Actually Exists

Our Unique Value Proposition

Token Economics

Current Tool Definition Cost

Token Efficiency by Design

Updated README Strategy

New Tagline

Key Sections to Add

1. “Why This Server?”

2. “What Makes This Different”

3. “Comparison with Other Solutions”

4. “Who Should Use This”

5. “Compatibility”

Distribution Strategy

Current Situation

Action Plan

Real-World Workflow Examples

Daily Journaling

Research Note Management

Vault Reorganization

Implementation Decisions

✅ Keep as “Obsidian MCP Server”

✅ All 22 Tools Stay in MCP

✅ Add Skills for Workflow Patterns

✅ Focus on Distribution

Next Steps

Updated README Draft

2. 💰 Token-Efficient by Design (Unique)

3. 🔄 Multi-Vault Sessions (Unique)

4. 📋 Frontmatter as First-Class (Rare)

5. 🔒 Security from Day One (Critical)

Comparison with Other Solutions

vs. Obsidian Local REST API

vs. Generic Filesystem Servers

vs. Other Markdown Servers

🔄 Compatibility

Obsidian

Logseq

Foam (VS Code)

Plain Markdown

Who Should Use This

🎬 Real-World Workflows

Daily Journaling

Research Note Management

Vault Reorganization

✨ Key Features

🚀 Quick Start

🛠️ Available Tools

Management

Core Operations

🏗️ Design Principles

1. Token Efficiency First

2. Markdown-Native Operations

3. Session-Aware Context

📚 Documentation

🤝 Contributing

📄 License

🙏 Acknowledgments

📬 Contact

Conclusion

Graph View

Table of Contents

Recent Notes

ContentEngine