CEO of Territory Foods: Ellis McCue

What's the situation in DC when you're running a business? How do you find it there?

The entrepreneurship environment in DC is really interesting. It's very heavy on fintech, very heavy on real estate, and there's an emergent and small group of food entrepreneurs and health and wellness entrepreneurs. Because we are at the nexus of a lot of scientific universities, government, and international focus, that kind of penetrates no matter what business you're running. It's a small entrepreneur environment, but it's growing fast, and that's exciting.

There's been an increase in consumer products, which I love, being a leader in the food space, consumer space, and technology. It's a good group of investors, small but mighty, definitely not the panache of Silicon Valley, but that means you know everybody and everybody stays close.

Was it a strategic business decision to be in DC, or did it just happen to be that way?

It was a strategic business decision, but not made by me. I'm not the founder of Territory Foods. The company was founded in 2011 by someone who lived in Northern Virginia. It's amazing because we specialize in fresh prepared meals, and much of the paleo CrossFit movement in the 2011-2015 timeframe was born in the Washington DC area and very heavy in the Mid-Atlantic. So it was strategic to be located here, and we've grown up to New York versus taking from New York.

When we expanded to the West Coast in 2015, that was strategic too. We have a big team in Los Angeles, a large team in DC, and small teams in New York, San Francisco, Dallas, Austin. We're distributed, and it's amazing to see East Coast health and wellness versus West Coast, because they're almost different ideals and ways of interacting with wellness products.

Before we jump into Territory, can we go back? How did you start your own career and what made the transition to Territory?

I started my career in consulting, doing technology integration for Deloitte Consulting. It's an amazing place to start, especially as a female technologist, because it's an equitable environment with tons of mentorship. I didn't understand the value of that at the time, but it was a launch pad for me to pursue a career in technology, even though I come from a non-technical background. I have a degree in international studies and East Asian studies from Johns Hopkins University.

After about six years with Deloitte, I built up expertise in product management, which was called functional reporting back then. I developed a hypothesis on complexity: if you're a Fortune 500 company, why pay Deloitte $20 million to customize Oracle? If that investment doesn't pay off directly to your consumer, you shouldn't be making it. I took that hypothesis to Gap Inc., moved from the East Coast to San Francisco, and worked in retail during a time of dramatic change. E-commerce was popping, and I loved it from a supply chain operations perspective.

I ran the 44 international markets not wholly owned by Gap, working with best-in-class franchisees who knew their customers well. I started to rebuild the supply chain, hand-cutting purchase orders for thousands of pairs of pants from Excel at 2 AM, sending them to producers to make the supply chain tighter. It was amazing because Gap is values-driven, but e-commerce caught them off-guard. I was there for about three years, moved to London, launched Gap India, and Old Navy UAE.

I lost my visa due to Brexit, decided to leave, and landed in New York. Almost immediately, I was headhunted by ZX Ventures, the venture capital arm of AB InBev. They had a hypothesis that even though beer was declining, there was brand equity in their 350 brands. I loved it because it was either something or nothing. I started with a laptop and a creative director, building businesses around beer brands. The first year, we launched five websites, all DTC, with over $10 million in success. The second year, we inked bigger deals with Walmart, B2B, and bigger categories.

I was managing analytics with one data analyst, hand-gemming everything on Excel sheets. It was amazing to drive revenue fast and say, if you believe in this brand, here are 15 other products you want to buy. The growth was incredible, but I was on the road 75% of the time, and my health fell apart. I've always been health-focused, losing my father to brain cancer at 21 changed how I thought about my health. I started experimenting with biohacking and functional wellness early, doing elimination diets and learning about inflammation in the brain.

When I knew I was leaving AB InBev, I wanted to work in health and wellness. I found Territory Foods on LinkedIn, and they were looking for someone to help with direct-to-consumer scaling. I wasn't a board placement; I found them on LinkedIn. It was an interesting business model with the potential to impact people's health at scale using delicious, healthy food and data. Once I met the founder and saw the business model, it was a perfect match.

What kind of nutrition have you gone through? There are so many diets out there. What have you tried personally, and where did this bring you today?

Health is personal. Diets are templates of standard practices to get a result. Pre-2011, diet culture was about weight loss and low-fat restriction. In 2011, there was a move to naturalistic eating, led by Mark Sisson and the paleo movement. It was less about restriction and more about feeding your body whole, natural things. For me, that was a pivotal change from restriction to bounty.

I started early in paleo, giving up gluten, sugar, dairy, and other inflammatories to figure out why I was always sick. At 24, I looked pregnant because I was on the road, drinking, and eating sandwiches at night. Cutting out those elements made the inflammation go away. It wasn't sustainable, but I learned what worked for me. For five years, I thought it was gluten, but it was actually lactose. Cutting dairy cleared my cystic acne, which doctors said was a coincidence, but it was a clear A-B impact.

When I found Territory, all the food was free of gluten, sugar, dairy, and inflammatory oils, keeping my diet cleaner by default. It's about A-B testing, not finding religion in food. Keto helped me lose weight before my wedding, but it wasn't sustainable. The world is about finding the right balance for yourself. We have biomarkers and more information now, but it's about enjoying wellness without being fixated on it.

You mentioned you learned about Territory on LinkedIn. What did you do after that?

I reached out to the recruiter. They had a position that wasn't quite right, but I found the company. I had a conversation with the recruiter, and we connected over keto. She said, "You're one of us." There weren't many people talking about this, especially women. I met the founder, Patrick, who built the business on his personal use case and community. He was a paleo crossfitter who didn't want to cook, so he built software instead.

Territory adds chefs because we're not vertically integrated. We have a distributed supply network, bringing commercialization on behalf of chefs and health and wellness standards. We can use a dynamic supply base to serve customers looking for specific diets, like vegan keto. The founder built beautiful software, and when he transitioned out, it was a perfect marriage. We shared the dream to impact health at scale through healthy food, localized food, sustainable materials, and data.

How are you thinking about achieving that vision? Are you taking user input or relying on data?

It has to be both. Food is intimate and cultural. There's a cultural aspect of healthy eating left out of the traditional narrative. We use data, new markers like continuous glucose monitors, and build in data input pipes into our recommendation algorithm. We have a broad and deep supply of delicious food. If a customer sees a healthy version of a dish they love, and it helps them achieve their health goals, that's a forever relationship.

We're dynamically looking at the ordering population and understanding their needs and wants. We're using data to make sure we have the inventory set to support different preferences. For athletes, we're taking information from wearables and movement data, making real-time recommendations based on what's in their fridge. It's about completing the circle of connected nutrition and wellness.

Are you thinking of taking a scientific approach for athletes?

Absolutely. Athletes are inclined to take performance information seriously. We're taking information from wearables and making real-time recommendations based on their workouts. It's about building that cyclical information flow, not just about food consumption, but integrating it into fitness tracking. We're democratizing access to what personal chefs do for wealthy athletes, using data and our supply network to get them what they need.

In our initial conversation, we discussed how Territory could use Terra to access data. It's powerful because you're taking the education part out and delivering meals based on data.

It's interesting. Some ask if the food mechanism matters, and the answer is yes. The food mechanism is the hardest part. The information is there, and smart people are figuring out how to string it together. The food mechanism, transparency, and integration are crucial because you have to create that cycle for the customer where it's easy. The category has a long way to go, but improvements in the last two years have accelerated connected wellness. We're excited to be at the forefront because it's about personalization and disease management.

WHOOP's work during COVID has been interesting, using predictive analytics to identify COVID biomarkers before testing positive. It's amazing use of consumer technology impacting public health. We're keeping control on that endpoint and building native integration to build that into the cycle of wellness. We're excited to be at the forefront because this is where the whole category goes.

Which wearables or Peloton-like solutions do you think are important in this space?

When I got pregnant, my resting heart rate went from 56 to 72. Early pregnancy causes your body to pump more blood. Aura Ring should do pregnancy tracking because there's a fertility crisis. Aura is doing interesting things, and I'm a fan of WHOOP. They have hardware and analytics. Apple builds beautiful hardware, but their analytics and user interface are disappointing. Peloton is great for group fitness, but they're not using data intelligently.

Tonal is interesting for athletes, using real-time exertion data to change weight dynamically. Vessel Health and Zoe Health are doing interesting things with continuous glucose monitors and gut biome studies.

One of the products I really love is the one we had a conversation about last time with Mateo from Aidsleep. What these guys are doing is fantastic. I've been using an Aidsleep for the last month, and it measures how many times you toss and turn. I went from 30 to 35 on average, and now it's down to 10. It's all about measuring data and making it actionable for users. It's simple.

Exactly. We noticed you did some fundraising for Territory Foods during the COVID period. How did you approach it?

During COVID, our focus was on keeping people healthy and at home. We wanted to support our local restaurant and caterer community to ensure those businesses didn't go under. We dramatically increased our reach from 20 million to 250 million Americans and boosted the variety of food we offered. We saw a 60% increase in the amount of Territory Foods consumed during the pandemic. We built stronger relationships with our existing customer segments, which led to sustainable growth. We raised our last money in 2020, and our investors understood the value of our platform beyond just direct-to-consumer.

Money is one part of the equation, but I'm sure you face many challenges running a business. What are you trying to solve now?

Being an entrepreneur is both the best and hardest thing. Territory Foods is a data science company, a SaaS platform, and a food operation. Managing such a diverse team is challenging. The pandemic has made deliveries and logistics difficult, and rising labor costs have impacted our chefs. We focus on solving these issues while keeping our mission clear. It's about staying focused and building a reality-based company.

How does the culture at Territory Foods work?

We're a mission-driven company focused on keeping people healthy. We emphasize cultural alignment with diverse perspectives. We're a flat, remote organization, which allows us to have international teams. We prioritize transparency and digital connectivity. It's about creating micro-connections between people, even in a digital environment. We use tools like Slack and Donut to maintain these connections. It's crucial to have a culture of amplifying wins and community.

How do you ensure a new hire fits your cultural criteria?

We have seven core principles at Territory Foods. We look for innovative minds, collective responsibility, and diversity. Not everyone fits a remote environment, and that's okay. My advice to entrepreneurs is to establish a company infrastructure early, align your mission and vision, and build company values. Scaling your team is challenging, but having a planful mindset helps.

Can you share your thoughts about the future of this space?

I think we'll become more digitized but also more personal. Humans want connection and support. We'll see bigger integration in connected wellness, and I'm excited to be at the forefront. It's about reaching consumers intimately and focusing on specific needs. Predictive algorithms and AI will play a significant role. We need to build consumer-friendly tech and integrate biomarkers, fitness, recovery, and sleep. The hardware, software, and consumer need are there, and it's up to us to deliver.

Ellis, it has been fantastic having you on the podcast. Territory Foods is a great company, and you're a wonderful leader.

Thank you so much. It's been wonderful to chat with you all. I think we're going to build something beautiful together. Thanks for having me.