Portland, Maine, is only two hours away from Boston, which is not that much of a commute, but for an entrepreneur in Maine, it can feel much further away when it comes to getting the resources you need to grow your startup.
Kerry Gallivan learned that the hard way when he was looking to raise a $1 million financing round for Chimani, his Portland-based startup that builds unofficial apps for national parks. The original plan was to raise half of the round from investors in Maine and the rest in Boston, but when Gallivan went down to the Hub to pitch angel groups and seed funds, none of them took the bait. Gallivan said his main problem was that he was completely disconnected from Boston’s startup ecosystem, not having gone through an accelerator like Techstars and lacking the credentials of someone who has climbed the local corporate ladder.
It also didn’t help that he was building a consumer startup. While Boston has some clout and resources in the consumer space, it can’t compare to Silicon Valley.
“It was as if we were from Kansas,” Gallivan told BostInno.
Chimani ended up raising $745,000 for its first round, with most of it coming from a super angel who splits time between Maine and California and the rest coming from the Maine Angels group, the Maine Venture Fund and Maine Technology Institute.
With fewer resources than startups in large technology hubs in Boston and Silicon Valley, early-stage companies in Maine like Chimani often have to take a much leaner route.
“One of the benefits of doing a startup in Maine is it gets you to ‘how do you actually build a more sustainable business’ a lot faster.”
“You’re forced into it, and I think one of the benefits of doing a startup in Maine is it gets you to ‘how do you actually build a more sustainable business’ a lot faster,” Gallivan said.
Gallivan founded Chimani in 2010 while he was still a technology director at a school district in midcoast Maine. The original idea was to take Lonely Planet’s tourbook guide model and apply it to national parks in an app that could completely work offline so that travelers would never have to worry about bad reception.
The app would evolve over time, adding features like a location-based game that would encourage you to discover new spots in exchange for digital badges and an annual subscription program that provides discounts at businesses around national parks.
It wasn’t until 2013 that Gallivan, who had been funding the company with his own money, was able to quit his full-time job at the school district, thanks to a three-year advertising sponsorship Chimani landed with Subaru. Using money from deal, Gallivan said he was able to expand from covering nine national parks to all 59 in the United States.
“It was a challenge raising money in Maine, especially at the early stages being consumer based, but that really allowed us to get to the point where we are now,” he said.
Gallivan said he has learned a lot from his initial experience of trying to entice investors in Boston and is now taking more time to visit the Hub and other cities. That has started to pay off, with Chimani winning third place in The Ad Club’s Brandathon in 2015 and getting to showcase at WebInno, a popular event series now known as Boston Innovation Group.
Chimani is now in the process of raising its next round of financing, Gallivan said, which would be used to expand internationally (which Chimani has already started to do) and build a transaction platform that can help travelers book lodging within the app.
With no marketing budget at the moment, Gallivan is trying to find creative ways to grow Chimani, which is currently seeing 5,000 downloads a day on average. The company recently got a boost from Google, which gave Chimani an editor’s choice award that gave the app some prominent real estate in the Google Play store. It also trying to get new users through partnerships with lodging operators like Delaware North, which sends customers an email promotion for Chimani five days before their trip begins.
Gallivan admits that Chimani is currently in a position where the company has healthy traction and healthy revenue, but not quite to the point where it would become easier to start conversations with out-of-state investors. “If we can push either of those along further, then we would be in a much better position,” he said.
But to really take Chimani to the next level, he knows he will need to find a breakthrough.
“There’s an appropriate time when you need to pour gasoline on it,” Gallivan said.