Making It with Jon Davids - Episode 216

"It's the Biggest Business Opportunity of the Decade" – Michael Hyatt, Billion Dollar Entrepreneur
September 30, 2025

Episode Overview

In this engaging episode, host Jon Davids sits down with Michael Hyatt—a serial entrepreneur, investor, and the co-founder of BlueCat, who sold his company for nearly a billion dollars. Together, they explore the unprecedented pace of technological change, emerging business opportunities, and the enduring factors behind America's dominance in innovation. The conversation weaves through AI, quantum computing, the evolution of work and education, the future of real estate and transportation, and practical advice for today's entrepreneurs. Michael's optimism about the future is tempered by a strong rooting in business fundamentals and an understanding of human nature.

Key Discussion Points & Insights

1. From Dorm Room to Multimillionaire: Michael Hyatt's Journey

• Background & Early Entrepreneurship:
  • Michael recounts starting a software company in the 1990s recession with his family, leveraging niche engineering software before the internet's mainstream adoption ([03:47–04:39]).
  • "We started a software company before there was any, you know, the Internet was just coming about. Like, we would save software on disks and go this place called the post office and mail the disk to somebody..." – Michael Hyatt (04:08)
• Building & Exiting Companies:
  • Leveraged lessons learned in the 'dotcom' bust to build BlueCat, eventually selling the company for nearly $1 billion ([04:42–05:00]).
• Current Focus:
  • Now runs a family office in Toronto, investing in public stocks, private equity, and buying significant stakes in companies ([02:43]).

2. Technological Paradigm Shifts: What's Intolerable Tomorrow?

• AI & Human Nature:
  • Hyatt emphasizes the ancient wiring of humans versus the rapid evolution in technology ([01:14], [06:32]).
  • "Our DNA for modern Homo sapiens is a hundred thousand years old." – Michael Hyatt (01:24)
• Examples of Coming Disruptions:
  • Car Ownership:
    • Predicts owning/driving cars will become "intolerable" within a decade and replaced by subscription-based, autonomous transport ([07:01–07:56]).
    • "Buying a car is extraordinarily inefficient and expensive. ...All of this stuff is going to become an entire burden." – Michael Hyatt (07:01)
  • Fixed Real Estate Use:
    • Questions the continued necessity of driveways and posits cities and real estate will transform as car ownership declines ([07:56], [12:30]).
  • Education:
    • Foresees a reimagining of education delivery and questions enduring traditional classroom models ([07:56]).
    • "The next phase of humanity is to start valuing EQ over IQ." – Michael Hyatt (15:23)
  • Hyper-Personalized Content & Synthetic Media:
    • Imagine "Netflix for kids" generating customized shows on-demand ([10:41]).
    • "They're gonna say, what do you mean you couldn't invent a show on the fly?" – Michael Hyatt (11:17)
  • Neurotechnology:
    • Mentions neural implants (referencing Neuralink) with wireless charging that could transform human cognition in two decades ([07:56]).

3. The Fast Five: Coming Explosion in AI & Quantum Computing

• Predictions for the Next Five Years:
  • Cites the Creative Destruction Lab’s forecast that the coming five years ("the fast five") will outpace any in history, marked by:
    1. Arrival of superintelligent AIs.
    2. Major breakthrough in quantum computing ([15:23–18:40]).
  • "You're going to hear about it on Monday and it's going to be like quantum is real. And that means we've moved billions of fold in computing power seemingly overnight." – Michael Hyatt (17:55)
• Exponential Change & Human Limits:
  • Discusses difficulty in imagining exponential futures and the tendency to repurpose old paradigms with new tech (radio, TV, Internet, now AI) ([18:40]).
• AI Optimism vs. Skepticism:
  • Michael is an "AI optimist," confident that while humans bungle processes in the short term, over time they "eventually do the right thing." ([25:38])
  • "With great power comes great responsibility. ... We do the wrong thing for a long time, but eventually, at the end of the day, we do the right thing." – Michael Hyatt (25:38)

4. The Enduring Role of Human Connection

• Jobs Safe from Automation:
  • Echoes Sam Altman's view that nursing and teaching will endure due to the irreplaceable value of human empathy ([20:17])
  • "We need that human connection." – Jon Davids (20:49)
• Tech-Augmented Empathy:
  • Technology (VR, advanced medical advice) will empower teachers and nurses rather than replace them ([21:01]).
• The Progress Paradox:
  • Despite media-driven pessimism, most indicators—literacy, health, peace—are improving ([21:01–22:57]).
  • "The world is getting dramatically better. However...you feel like the world is getting worse. It's not." – Michael Hyatt (21:29)

5. American Exceptionalism and Global Innovation

• Why the U.S. Remains Unique:
  • Attributes American dominance to geography, resources, risk-taking ethos, culture export, and a huge, unified market ([30:20–38:38]).
  • "The American economy is something like almost $30 trillion in size… It has a risk-taking ethos which is so incredible..." – Michael Hyatt (30:20)
• Innovation Pipeline:
  • Notes the U.S. as the source of most high-margin ideas, culture, and technology exports (e.g., SaaS, OpenAI, Amazon, etc.) ([38:38]).
• But Empires Don’t Last Forever:
  • Acknowledges America is not immune to decline but remains bullish long-term ([30:20]).
• Trade & Reserve Currency:
  • Explains the pivotal role of the U.S. dollar and the strategic advantage of its "reserve status" post-Bretton Woods ([35:20]).

6. The Cryptocurrency & Bitcoin Debate

• Hyatt's View:
  • Treats Bitcoin/Ethereum primarily as "trades, not assets," driven by concern over U.S. debt and fiat currency erosion ([40:00–44:29]).
  • "The reason to own bitcoin ... is a put against politicians who are just inflating the US debt ad nauseam." – Michael Hyatt (41:08)
• Asset Value Driven by Policy:
  • "Bitcoin is going up is because the US Deficit is going up." – Michael Hyatt (43:13)
• Skepticism:
  • Believes most crypto innovation is now "washed out," but still sees more fraud and inflated expectations than for other asset classes ([42:54]).

7. Business Building Fundamentals: Investing, Profit & Sustainable Scale

• Hyatt's Investment Philosophy:
  • Avoids "crazy valuations" and prefers established companies where he can add operational value ([45:24–46:36]).
  • "My edge is to invest in things where my operational experience can disproportionately help the company and help my investment." – Michael Hyatt (46:05)
• Preference for Profitability:
  • Looks for companies that are profitable or can explain rational, temporary unprofitability (i.e., intentional investment cycles as with Amazon) ([49:18–52:37]).
  • Warns most exits are much smaller than entrepreneurs imagine; unicorn outcomes are extremely rare ([49:18]).
  • "Exits, the golden arches of exits, even on a good day, are between 50 and 100 million. So when you start getting in at 20, 40, 50 million, and you're trying to sell your company for 2, 3, 4, 500 million because you've heard people do it, literally you have to be struck by lightning." – Michael Hyatt (49:18)
• Dangers of Venture Capital Over-Financing:
  • Describes the pitfalls of fundraising cycles: as rounds accumulate, founders get heavily diluted, ending up with a small share after a long, stressful journey ([51:50–53:39]).

8. Market Cycles & Long-Term Investing

• Public Markets Strategy:
  • Despite high valuations, Hyatt keeps dollar-cost-averaging into S&P; ignores short-term corrections ([54:37]).
  • "The market always goes up to the right. If you just stand back from it, you're just too close to it." – Michael Hyatt (55:04)
• Private Market Valuations are More Opaque:
  • Reminds listeners that private asset drops are often even steeper, just less visible during downturns ([55:04–56:14]).

Notable Quotes & Memorable Moments

• On Technological Change:
  • "There are things that you and I do today that will be intolerable in 10 years. Like, we will never, never stand for it, but we see it as normal today." – Michael Hyatt ([00:00])
• On America's Resilience:
  • "Since 1776, if you bet against America, you lose. Eventually, you lose." – Michael Hyatt, paraphrasing Warren Buffett ([26:27])
• On Risk-Taking Culture:
  • "The reason these America invents so well is that they're such amazing risk takers. ... Other countries aren't willing to do that." – Michael Hyatt ([38:38])
• On Human vs. Machine Intelligence:
  • "We are still 100,000 years old. And we need that." – Michael Hyatt ([15:23])
• On Investing Approach:
  • "It's never been easier to start a business today. It's never been cheaper to fail." – Michael Hyatt ([45:24])
• On Profitability:
  • "You can only lose so much money to the next investor says no, and then what do you do? ... So easy to get stuck in no man's land." – Michael Hyatt ([51:50])

Timestamps for Key Segments

• [01:14] – Human Nature vs. AI: "Humans need human humans"
• [03:47–05:00] – Michael’s Entrepreneurial Origin Story
• [06:32–07:01] – Inefficiencies vs. Intolerable Futures
• [07:01–07:56] – The End of Car Ownership
• [10:41–11:41] – Synthetic, Personalized Content for Kids
• [15:23–18:40] – Education Disruption and The Fast Five in Tech
• [21:01–22:57] – Are Things Getting Worse or Better? The Noise of Modern Media
• [25:38] – AI Optimism & Human Adaptation
• [30:20–38:38] – America’s Geopolitical Strengths & Innovation Pipeline
• [40:00–44:29] – Crypto as a "Put" Against Monetary Policy
• [46:05] – Operational Value as Investment Thesis
• [49:18–52:37] – Why Profit Matters; The Reality of Exits
• [54:37–56:14] – Public Market Strategy & Opaque Private Valuations

Tone & Style

The conversation is accessible yet highly insightful, marked by Michael Hyatt's blend of pragmatism and excitement for the future, with Jon Davids steering the discussion toward practical implications and lessons for entrepreneurs. The dialogue combines personal storytelling, macroeconomic insights, and concrete business guidance, using vivid anecdotes and analogy to demystify complex trends.

Useful for anyone seeking inspiration or practical strategy at the intersection of technology, entrepreneurship, and the realities of business building in the 2020s.