Why a top Silicon Valley VC firm just invested in a company that makes chewable coffee
Dixon drinks Soylent, the chalky nutrition drink favored among startup workers, then ingests another startup favorite: nootropics.
The so-called "Smart Drugs" produced keep Dixon alert as everyone else is sagging after a heavy lunch.
On a Monday, it's a combination called "Sprint" to power him through the day.
Dixon likes them so much, he is leading a $2 million funding round for a startup that makes them, Nootrobox.
It's an unusual bet for the firm that's preached "software is eating the world" and has placed successful bets on tech giants like Facebook, Twitter, and Airbnb.
After all, powdered supplements to boost your brain sounds more like a scam than a software company.
Inside the world of "smart drugs"
At face value, all Nootrobox is doing is selling powdered supplements in pill packages.
Instead of boosting your Vitamin C levels, these pills "biohack" your brain. All of the ingredients used are labeled by the FDA as GRAS ("generally regarded as safe") or acceptable, the company says. Some of the main ingredients are caffeine and L-Theanine, a derivative from green tea.
Together, in what's called a "stack", the combination becomes a pill that is sold to biohackers like Dixon.
Biohacking is a DIY-movement springing up in Silicon Valley in which people experiment with various supplements or devices that they believe lead to increased productivity, mental acuity, and other benefits. There's an active group on Reddit of more than 60,000 people who discuss which nootropics to take and their results on the body.
That's where Dixon found Nootrobox. He had been looking for startups in the space, but most were marketing-driven and sounded "too much like an infomercial," he told Business Insider.
"Some very high percentage of college students are taking Adderall," Dixon said. "I think the nootropics movement is a much healthier alternative to a lot of this stuff. Everything that Nootrobox sells is all well-known."
The startup has three "stacks" of pills called Rise, Sprint, and Yawn. Rise is your everyday mental booster while Sprint is made largely of caffeine for short spurts of productivity. Yawn is for going to bed.
The company's newest products are "Go Cubes" of chewable, gummy coffee bits for those who like a caffeine boost without taking a pill.
Nootrobox had been panned in the biohacking community because it sells well-known and easy combinations - at least if you're an expert in nootropics.
But to Dixon, it's like the Homebrew Computer Club of the 1970s getting upset that IBM made PCs. If you don't know what you're doing, the barrier to entry is high, and the result of misuse can be dangerous.
"If you go to a random website, you don't know the quality and content of these ingredients or where they're coming from," Dixon said.
It's not only going to be a supplement shop. This is an Andreessen Horowitz investment, after all, so Nootrobox will have a softwre component: The company plans to release an app in the next month, so users can start tracking how they feel when they take nootropics and without them, as well as tracking how things like exercise affects their overall mood.
"Think of it as MyFitnessPal for your brain. It's like a fun way to keep track of how you feel, what you ate, whether you exercised, all those kinds of things that might affect your mood," Dixon said.
While it's taken venture capital money, Dixon sees the company operating more like another of his investments, Soylent. The startup rakes in a little bit of cash - in this case a $2 million seed round - to jump start its path to profitability. Once it becomes a cash positive business, it then invests that money back into R&D.
Not just a fad
But what if this is just an obsession of techies on places like Reddit? What if normal consumers never bite?
"Any of things we invest in could be a fad and not a trend, and that's totally the risk we take," Dixon acknowledges.
His investment also coincides with the rise of fitness trackers, like Fitbit, where consumers are excited to know more about their health and be in charge of it.
Other investors have taken notice, as well.
Earlier this year, another venture capital firm, Trinity Ventures, made a big bet on Bulletproof. Known mostly for the coffee-with-butter craze, Bulletproof uses oils and other ingredients to increase mental acuity and brain performance. Its founder, Dave Asprey, is a well-known biohacker who takes more than 30 pills a day, some of them of questionable legality, to hack his brain.
"This movement towards having control of your own health and well-being is not a fad," said Gus Tai, a partner at Trinity Ventures who joined the board of Bulletproof.
"Bulletproof's core philosophy is empowering people to take control of their own health and well-being to reach the level of mental acuity and performance that they're desiring."
Dixon and Nootrobox acknowledge that there is still little information on the health benefits of it, despite being labeled generally as safe by the FDA. Part of the investment will go towards commissioning a study so that the startup can submit it to the FDA and get permission to make claims of efficacy.
Small, software-enhanced steps, like tracking your mood via an app, will play a role in helping consumers determine if one pill made by Nootrobox makes them feel better than a can of soda.
"I believe 30 years from now people will look back on our consumption of soda like they look back on 'Mad Men' and are like, 'I can't believe they're chain-smoking and drinking at work!'" Dixon said.
Disclosure: Marc Andreessen, co-founder of Andreessen Horowitz, is an investor in Business Insider.
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