Podcast Summary: E178 - Elon Musk of Biotech: How David Berry Built 7 Unicorns

Podcast Information:

• Title: How I Invest with David Weisburd
• Host: David Weisburd
• Episode: E178: Elon Musk of Biotech: How David Berry Built 7 Unicorns
• Release Date: June 23, 2025

Introduction In episode E178 of How I Invest with David Weisburd, host David Weisburd engages in an insightful conversation with David Berry, a renowned biotech entrepreneur and investor often referred to as the "Elon Musk of Biotech." Berry shares his journey of building seven unicorn companies, his investment philosophy, and the intricate dynamics of scaling startups in the biotech sector.

1. David Berry: The Elon Musk of Biotech

The episode opens with a compelling introduction where David Berry is likened to Elon Musk due to his ambitious approach to solving large-scale problems in the biotech industry.

• Quote [00:07]:
  David Berry: "Health has a particular calling... there's a moment where we just feel helpless... trying to find solutions to the problems that take the people who are close to all of us."

Berry emphasizes his motivation rooted in personal experiences with health challenges, driving him to tackle significant technological problems in biotech.

2. Building Unicorn Companies: Common Themes

Berry discusses the success rate of his ventures, highlighting the commonalities among his seven unicorns out of approximately thirty companies.

• Quote [01:29]:
  David Berry: "We've founded north of 20, I think closer to 30 companies, and seven of these have become unicorns."

He credits a philosophy inherited from his thesis advisors, Bob Langer and Ron Sussein, focusing on tackling big, complex problems and being open to making and accepting mistakes.

• Quote [01:40]:
  David Berry: "Start out, put a lot of ideas out there, be willing to be wrong, be willing to accept that you're wrong."

3. Startup Dynamics: Default Dead vs. Default Alive

The discussion delves into the inherent challenges startups face, contrasting them with established corporations.

• Quote [03:36]:
  David Berry: "Startups, unlike established companies, are default dead... you have to constantly fight those forces and cause the company to grow."

Berry likens managing a startup to battling against gravity, emphasizing the relentless effort required to propel a company to success.

4. Navigating Pivots and Distractions in Business Strategy

Berry explains how to discern between meaningful pivots and distractions that could derail a company’s progress.

• Quote [04:44]:
  David Berry: "What is the ground truth?... it's that you can find that nugget because that is truth."

He stresses the importance of data-driven decisions and maintaining team focus to avoid being sidetracked by non-essential changes.

5. Maintaining Company Culture During Scale

The conversation highlights the challenges of preserving company culture as startups grow.

• Quote [08:01]:
  David Berry: "In the early days there's not many people, so you have tremendous control over culture... but as the company grows, that ability tends to drift."

Berry underscores the critical role of hiring aligned talent and implementing robust change management practices to sustain the original vision and culture.

• Quote [09:55]:
  David Berry: "We were really strong at maintaining the quality of hiring, at maintaining the culture... they had one of the highest scores in Vista's history."

6. The Role of Founders vs. CEOs in Scaling

Berry discusses the delicate balance between the innovative drive of founders and the operational expertise of CEOs when scaling companies.

• Quote [11:16]:
  David Berry: "Founders play a really important role in setting strategy, defining product market fit... but they surround themselves with outstanding operators."

He advocates for a symbiotic relationship where founders focus on innovation while delegating operational tasks to skilled CEOs and management teams.

7. Work Culture: Passion-Driven vs. Mandated Overtime

The episode explores the significance of genuine passion over enforced long hours in fostering a productive work environment.

• Quote [13:35]:
  David Berry: "You can actually get a really good read on where a company is going by how long people want to stay working at the company... without being pushed."

Berry highlights that passionate teams are more sustainable and produce higher output compared to cultures that mandate excessive work hours, which often lead to burnout.

• Quote [14:48]:
  David Berry: "Especially when you're dealing with health companies, has a big part to do with the mission."

8. The Power of Skill Stacking

Berry reflects on the concept of skill stacking, where combining expertise in multiple areas can lead to exceptional success.

• Quote [31:56]:
  David Berry: "The more you can bring various forms of expertise together, you get the benefit of pattern recognition that transcends fields."

He draws parallels to Elon Musk’s multifaceted skills, demonstrating how diverse competencies can create formidable leaders even if they are not the best in each individual field.

9. Investment Philosophy in Biotech

Berry outlines his investment approach, focusing on first principles and strategic entry points to maximize returns.

• Quote [20:56]:
  David Berry: "A return is effectively your exit price divided by your entry price... it's really about how do we drive multiples, right, rather than percent ownership."

He emphasizes investing at optimal points in a company's lifecycle to minimize entry costs and maximize growth potential through active partnership.

10. Avarin Capital: Mission and Strategy

Berry introduces Avarin Capital, a firm he launched with his brother, focused on the intersection of health and technology.

• Quote [37:35]:
  David Berry: "We look for the single biggest GDP growth opportunity and wealth creation opportunity... the intersection of health and tech."

Avarin Capital targets later-stage companies poised for exponential growth, addressing the gap in capital availability between early and late-stage financing.

• Quote [40:47]:
  David Berry: "We've built a team that's focused on finding and partnering with outstanding companies and helping them to grow and get into that exponential phase."

11. Alzheimer’s Investment Thesis

Berry shares his insights into investing in Alzheimer's research, a field marred by high risk but immense potential impact.

• Quote [40:56]:
  David Berry: "We're now at the beginning of an era where personalized medicine is possible for Alzheimer's... this can open up a completely new era in this disease."

He advocates for precision medicine approaches that target specific patient populations, enhancing the likelihood of successful treatments and market fit.

12. Conclusion

The episode wraps up with Berry encouraging listeners to engage with Avarin Capital and stay connected through various platforms, underscoring his commitment to advancing the future of health and biotech.

• Quote [42:52]:
  David Berry: "We are incredibly excited about ushering in the next generation of great companies in health and tech."

Notable Quotes:

• David Berry [00:07]: "Health has a particular calling... trying to find solutions to the problems that take the people who are close to all of us."
• David Berry [01:29]: "We've founded north of 20... seven of these have become unicorns."
• David Berry [03:36]: "Startups... are default dead... you have to constantly fight those forces."
• David Berry [13:35]: "You can get... how long people want to stay working... without being pushed."
• David Berry [20:56]: "A return is effectively your exit price divided by your entry price... drive multiples."
• David Berry [40:47]: "We've built a team that's focused on finding and partnering with outstanding companies."

Closing Thoughts David Berry’s insights provide a roadmap for aspiring biotech entrepreneurs and investors, emphasizing the importance of tackling big problems, maintaining culture during growth, strategic investment timing, and the power of passion-driven teams. His approach to combining expertise across disciplines underscores the potential for innovation at the intersection of health and technology.