Investing Billions - E178: Elon Musk of Biotech: How David Berry Built 7 Unicorns

Episode Date: June 23, 2025

David Berry is one of the most prolific healthcare entrepreneurs of our time. In this episode, we discuss his transition from scientist to founder to investor, what it takes to scale transformational health companies, and how his firm Averin is helping usher in the next wave of AI-enabled healthcare. We also talk about his early experience launching a satellite at 14, how he's co-founded over 30 companies—including seven unicorns—and why patents, perseverance, and purpose are the trifecta behind lasting innovation.

When our mutual friend, Saurav, introduced you to me, he introduced you as the Elon Musk of biotech. Why did he introduce you like that? You can always think about really big technology problems, but health has a particular calling, right? I think we all have a story where we've lost someone and usually somewhere along that journey, right? Even if we don't, even if we don't tell this part of story, the story to people, there's a moment where we just, we feel helpless. And sometimes that's because there aren't drugs for the condition. Sometimes it's because care is being denied.

Sometimes it's because we can't afford a treatment. Sometimes it's because it's too late. A whole set of different reasons for it. And so I just find it super motivating to try to find solutions to the problems that take the people who are close to all of us. And it's kind of that foundation, where, you know, if you couple that with a willingness to ask really big questions, you know, and frankly, a willingness to be

wrong a lot, importantly, to accept when you're wrong, you know, great things can happen. And I think that's kind of been the core of the approach that I've taken that's led to a number of companies that have been founded, north of 20, I think closer to 30. And it's been a great honor to work with some outstanding teams that have led seven of these companies that have founded to become unicorns. And we've had the ability to bring drugs

and other products to market with the vision of trying to help transform society for the better. I can't do that kind of math on my hands but I think seven of thirty unicorns somewhere around like a 22% rate. What have been the common themes in the seven unicorns that you've been a part of? My thesis advisor back when I was in doing my PhD was Bob Langer and Ron Slesiceckar. And then Bob used to say, all problems are equally hard, so why not go after the big ones?

So with that perspective, you can basically look at any of these problems and try to come up with some core solution. But the best way to have great ideas, as Edison said, is to have a lot of ideas. So the way I think about it is start out, put a lot of ideas out there, be willing to be wrong, be willing to accept that you're wrong. And the framework here is that what you got to do is just recognize what is the core of

the thing that you're trying to do and be willing to see very, very early on that it's right or it's not right. And I'd say one of the things that's happened in all good companies is somewhere along the journey, it's probably about nine months, 12 months in, something fascinating happens. And that's this moment where you had your idea, you were convinced it was going to work, but then something comes up and it was just not what you were expecting. And that's the moment where I think greatness can get created, which is that you can find that nugget because that is truth.

And if you can learn from that, you get the opportunity to point the company in the right direction. I tend to think of company creation, it's all about perseverance. Entrepreneurial life gets so glamorized and there's so many dynamics you have to fight against. People telling you you're wrong constantly, competition, bad luck, and it all comes down to you willing to make it work and willing, putting that will to make it work.

You know, I've seen that so many around entrepreneurs almost want them to fail. And I think one of the things that Elon does so well, and I admire him for is just this sheer drive, this sheer will that says, this is my vision, I'm gonna make it work. And you gotta imbue that, not just to your vision, to your company, but to the whole team.

Startups, unlike established companies, are default dead versus default alive. In other words, if nothing gets done, it dies versus a corporation. If nothing gets done, it dies versus a corporation. If nothing gets done, maybe it dies over a century, but it essentially continues to live. Exactly. You can almost think about it as almost like a gravity that exists around any company, which is you have to constantly fight those forces and cause the company to grow, cause the company to lift off, cause the company to get into orbit,

and then continue from there. And that constant drive recognizing that, look, starting up a company is one thing, getting a company through a series A is another thing, getting a company through a series B is another thing. And as the company continues to mature, that evolution and that push is something that you have to continue to do right for the company.

You mentioned that as you're starting a company, you sometimes uncover a kernel of truth that could be the basis of something really big. It could also be a distraction. And oftentimes those labels are put on different changes and strategies in retrospect. How do you know that something's a great pivot versus a distraction? It's hard. Whenever you see something, the question is what is the ground truth? And I think that's where you have to start

because seeing something that might just be a slight tweak on your business model because, oh, that sale was hard is one thing. But when you get a piece of data that's just, it's true, it's reproducible, it is durable, you owe it to the company, you owe it to the data to at least do the work and figure out what actually might be happening.

And you have to be a little careful, right? Because when you're managing a company, employees don't want to be whipsawed back and forth. It's an incredible distraction. But at the same time, you gotta do the the work to figure out if, if what you're seeing, if that signal is that signal that drives you into something greater. One of the things that I found is that you want to not be the person that just changes the course because they're bored or because they don't have what it takes

to succeed, but you also don't want to be polar opposite, meaning that you don't want to change because you want to stay the opposite, meaning that you don't want to change because you want to stay the course. How do you navigate that dilemma? There's probably two different scenarios you can think about them in. One is in the context of a company. So one of the ways that I've tried to solve this in the past is to actually have a team who is specific focus is to look at these new insights and figure out what they might

mean. I would often call it a strategy team. So we get an insight that causes an aha moment. You can't often aha moment, just go and say, all right, we're going to go do this without doing the work. And you also don't want to take the whole company and have them take their foot off the gas pedal and start doing some other work. So what I found that's really useful is having a dedicated group of people who can be deeply analytical, deeply thoughtful, understand the logic training

that gets you there to go and do that work. But then what you have to do at the back end of that is you've got to draw the conclusion and then you have to make sure whatever conclusion it is, is communicated really clearly, i.e. stay the course or no, we're making this change. But what I, what I always find is that the vast majority of people, and this often can show up in a board CEO dynamic or a CEO management team dynamic. People want to stay the course.

They want to keep doing what they were doing. Sometimes it's because they had comfort in it. Sometimes because they just naturally want to resist change. Sometimes it's because they don't fully understand what the new opportunity is. And of course, that's part of the CEO job is to bring people along the journey and understand what that direction is. But it is really important to be able to get there, convince yourself first, and then bring teams around you.

Sometimes you just want to go from 20 million to 22.5 million to 25 to 27.5. And that just feels good for everybody. Even if you've missed a billion dollar opportunity or a 10 billion dollar opportunity, just having that incremental progress, there's something very viscerally satisfying about that. It feels safe. It feels safe. And people will tell you, you always win by compounding. But let's get into the honesty of it. If you compound at a low rate, it's not as good as compounding at a high rate. Is it much more difficult to change the direction

of a company when you actually have a little success? Is that really the most difficult part? It's incredibly difficult to get companies to change when they're fully going. And that's why I always think about the early phases of a company is so incredibly important, right? In the early days, there's not many people. So you have tremendous control over culture, tremendous influence on culture, tremendous ability to make sure you're hiring the right people, people who live to those values, to the goals, to the virtues you're trying to instill in the company, but also people who

have a shared vision. And the people, I think, who joined companies in very early days are just driven by this passion to do something special. And they're the sorts of people that they'll bring to you that funny thing when they see it and they want to engage with you in that conversation and they're looking For how we can do something that's great. What happens when a company gets bigger is Well, your systems get diffuse your hiring gets diffuse and so sometimes the ability to hire people that are aligned with culture or aligned with standards or aligned with

Values tends to drift a little bit because I have a goal, you know, I have my, my near-term goal that I'm trying to achieve and I need X, Y, and Z number of people to be able to achieve it. So I know at corporate we think about this, but in my little world, I think about my end year goal. It just creates this drift when you get companies that are at that size inducing change, of course, is a much more complicated phenomena that involves change management, bringing people along the ride. What you find is if you don't do it right, these little silos will go off and keep doing

the old thing and not follow along the journey in the way that you're intending the company to go. I actually want to give my brother a tremendous amount of credit on this. When he built Triplelift, even as that company got to several hundred people, they were really strong at maintaining the quality of hiring, at maintaining the culture,

and keeping an environment that kept the community focused on the goal. And to the point that when they were acquired by Vista, I think they had one of the highest scores in Vista's history for how the team was performing. There's a psychological principle called negative contagion, which is the scientific explanation of one bad apple spoiling the entire batch.

One conventional thinking person that as a conformist could actually create a gravity around him or her to bring the entire company into this kind of small thinking, and that's why I think it's so important pre-product market fit is really where you're creating the DNA of the company to keep that with truly first principles thinkers, with truly non-egotistical people that can change course if needed. 100%. I think when you can find people like that who share the goals of being able to do

something specific that has big impact, you're building a great team. And then you get that alignment where people are driven by the end result, as opposed to the means of being able to get there. And the more people you can find like that in a company, the latter, not the bad apples, the better. You started $7 billion companies from beginning to scale. There used to be this conventional wisdom that the people that started the company shouldn't be the ones that scale. Do you find that to be true in that the true first principles thinkers can't actually scale? Or is it more that the middle management people can't be early employees?

When you think about what some of these companies do that are able to hyperscale and continue to scale and continue to grow and continue to innovate, you tend to see that founders are playing a really important role as you go along the journey. Because of course, the founder will help to set up the company in the beginning. A founder will make an important decision in setting strategy, trying to define that product market fit. What I've seen often is when you then hire a CEO to replace a founder, one of the first things that that new CEO wants to do, they tend to undo a lot of things that that prior CEO, the founder may have done and that creates challenges.

Now in some cases, the company may have done its innovation and now it just needs to rinse and repeat. And in that case, probably a founder who's gonna constantly innovate is not gonna be the best way to do that rinsing and repeating, again, because it's a different mindset. But the reason that hyperscaling companies hyperscale is they're constantly getting that data, they're constantly getting the information,

they're constantly asking the question, how can we do better? And I think what they do really well is these sorts of founders will say, what am I really good at? Which is often innovation, visioning, ideation, creation, bringing people along, et cetera. And what are they less good at?

Which is, for example, operations in some cases, and they'll surround themselves with outstanding operators so you can get the best of both worlds. And I think that's a really important duality that when you can recognize what one is good at and one is less good at, you can make an outstanding company come out of it at all phases. Double clicking on this zero billion dollar company, the companies that start out early and turn into billion dollar companies, how necessary is a culture of working 70, 80, 90 hour to becoming a billion dollar company? company is going by how long people want to stay working at the company on say a day-to-day basis without being pushed. So I think these mandated cultures of, uh, you know, we're going to work 27 hours a day and never go home and sleep when it's mandated, I don't think it works well

because people burn out. But when the team that you have has the passion that they just want to keep working on it, they want to make it, they want to solve it, they want to get it there, you know that something good is going to come out of it. And you can actually feel that energy if you walk into a company where people are acting like acting in that way with that kind of passion. It's just it's in the air. And I think people are more excited to go work there. They're more excited to work late hours without being told that they have to. And the output you get is it's not just eight hours plus eight hours.

It's much, much higher. Cause again, it's all about that drive. Is that primarily a passion for the mission, passion for personal financial gain, a passion for problem solving? What underpins that desire to stay late at night? A lot of it, especially when you're dealing with health companies, has a big part to do with the mission. But I mean, the other two obviously

are a big component of it as well. I don't think it's one or the other, but why would a computer scientist go to a health company as opposed to a tech company in the Bay Area? It's probably because they're driven by the mission. What would people say from the outside that have known you really well? What would they point to your one or two superpowers that has allowed you to start seven billion dollar companies? I don't know what people say behind my back.

But my favorite line that I've heard someone say publicly is actually said by Bob Langer, who called me fearless. And what his framework on that was, is that you can pick the problem, but you got to run headlong into it. You got to be able to say, it doesn't matter how complicated this is. It doesn't matter that a lot of people said that it's hard. It doesn't matter that it might seem unsolvable. It's just you go and you push and you try to find that solution. And I think that you could call it a strong perseverance. You could, you could, you could call it maybe an unwillingness to let go. Um, my wife would call it stubbornness. Um, I think that plays a really big role into it.

I think that phrase that I've used many times is, um, you know, if you're running to a brick wall, the question is, are you going to hit the brakes and leave a skid mark, or are you just going to go right through? And, uh, I always like to think about the latter as the right option. When you're driving into this brick wall, how important is it to have an inner circle of other great thinkers that could tell you, you know, you're smart to be driving at this brick wall, you have the right vehicle, just go and do it versus kind of doing it as a solo mission.

I remember when I was starting a company called LS nine, um, a very, very well known professor sent to me, oh, that idea is obvious. Someone should already be doing it. And one of the things that that made me realize is, if I can put it this way, great ideas are obvious once you hear them. So what do I mean by that? Well, you didn't know that it was a great idea. And you hadn't thought of it beforehand. But once you hear it, it's like, Oh, my God, that is such a good idea. And I realized that that signal of someone saying, Oh, yeah, that's amazing. But I'm sure it's been done before. Even though they can't

find it was a really good signal to finding really interesting problems to be working double click on this idea that a good idea sounds obvious. I've actually found my favorite ideas are these really big markets that only five people in the world know about. Like there might be some obscure cybersecurity CTOs in oil and gas that see this one problem over and over. And it might be massive.

It might be billions of dollars, but only five people are aware of it. You're almost saying the exact opposite, which is something that people feel should exist. Why did those opportunities exist? Isn't the market pretty efficient when it comes to venture creation? I don't know that the market is actually that efficient when it comes to venture creation, because the size of the problem is so large. And there's just a natural framing where people tend to

move from an area they know to an area they know to an area they know, and it tends to be adjacent. So can you form great companies by taking a step function innovation in an area? Absolutely. But at the same time, you can also look at a problem in a completely new way and see something that just isn't being done. So I'll take the LS9 example. This is a company that we launched back in 2005 or 2006. And this was back when that first clean energy boom was taking place. It was starting to shape up in Silicon Valley and whatnot. And there was a lot of investing that was going on to make ethanol, cellulosic ethanol, and other such things.

And when you look at the core of that, cellulosic ethanol was driven because there was a replacement of something called MTBE in gasoline. Um, and the question was, okay, with this growing market, can we find a interesting and effective and low cost way to be able to produce it? Corn was an interesting way to do it. Sugar was an interesting way to do it. We saw the trend. I remember working through probably about a few days since 2021.

Um, at the same time with fewer and fewer funds supporting in that area, we found it a tremendous opportunity to find great companies that we can partner with and help them take their outstanding visions and make them into realities as they go forward. So what we're very excited about doing is taking the company building experience that Eric and I have, as well as the team around us. The team as a whole has been involved in about 22 unicorns. And putting that together has given us an opportunity to partner closely with entrepreneurs, with management teams, to help us collectively see visions

that we think can help to drive to really, really interesting growth points, growth trajectories, and outcomes for these companies. Give me a type of deal that you would do in a company that's neither early stage nor late stage. We tend to like companies that have not just a product market fit already established, but they've taken the product, they've developed the product, it's on or close to market, and they have a very clear view

of how this thing is gonna be able to have a real impact. So for example, we've partnered with companies in the context, actually of what I was describing earlier, where they might've had a B2C model, and we saw an opportunity that by going to more of a B2B to C we saw an opportunity that by going to more of a B2B2C model, they would actually be able to unlock dramatically more value and do it durably. We worked very closely with them during that transition and they've been, if I can put

it bluntly, on a tear and that's been incredibly exciting. Tell me about your thesis on Alzheimer's. A lot of people are concerned about family members getting Alzheimer's. Tell me about your thesis on Alzheimer's. A lot of people are concerned about family members getting Alzheimer's. Tell me about your thesis there. Alzheimer's is a particularly scary disease. And I think people are scared of it, not just because of what they see it doing to their family

or friends, but what they think of that it could do to them. Watching people become almost mental shadows of themselves, losing memories, forgetting their loved ones, all of that. It's incredibly scary. And it's incredibly scary in deeply personal ways. One of the things that's been happening in the biotech world, which has been exciting for frankly, decades, has been the world

of precision medicine. So what does precision medicine mean? Well, often what's done is you can find something that allows you to know you're putting the right drug in the right patient at the right time. And that was done, for example, for rare disease, rare genetic disease, and that's unlocked treatments for things like Gaucher's disease, Pompeii's disease.

These are, of course, devastating to end. These are now children who, instead of having a death sentence can actually live. A mostly normal life, which is incredibly exciting. That same logic was brought into cancer, uh, and has been, uh, tremendously impactful there where untreatable cancers now have treatments, um, people who would have again had a death sentence have now survived cancer. It was then moved into inflammation and immunology and we've been seeing some tremendous value created there for patients. But what's exciting to me is I think we're

now at the beginning of an era where personalized medicine is possible for Alzheimer's. So you can take this incredibly complicated disease and start understanding definable domains within it and using that where we can make sure we're designing very specific treatments for that specific patient population. And I think that can open up a completely new era in this disease. And so it's something we're very excited about.

What would you like our audience to know about you, about Averin Capital or anything else you'd like to share? We at Averin are really driven by a future of health and a future of medicine that we're incredibly excited about. We think that we're at the precipice of an opportunity to bring a new way that we can think about our journey through life from a health perspective. And we see that as something that's going to be a really important part of people's lives, but also a really important part of the economy.

And we want to play a major role in that. We love to partner with people in this journey and anyone who wants to partner with us, feel free to reach out. And how should people keep up with everything David Berry? You can find me on LinkedIn. I'm on Twitter. I'm probably the worst Twitter person or sorry, X person.

You see how bad I am. Um, on the face of the universe. Uh, we also have regular webinars. Uh, we just, uh, had one recently and we're very happy to share the content that, that we've been producing. No TikTok skits yet. Not yet. Not yet.

Okay. Uh, my, my, my TikTok ability is yet? Not yet. Not yet. Okay. My TikTok ability is worse than my ex. Well, David, thanks for jumping on and I look forward to continuing conversation in person. Well, thank you for having me. Really appreciate it. Thanks for listening to my conversation.

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