This is a follow-up blog post to my last piece about Blumind.

More than two decades ago, before I started my first company, I was involved with an internet startup. Back then, the internet was still in its infancy, and most companies had to host their own servers. The upfront costs were daunting—our startup’s first major purchase was hundreds of thousands of dollars in Sun Microsystems boxes that sat in our office. This significant investment was essential for operations but created a massive barrier to entry for startups.

Fast forward to 2006 when we started Wattpad. We initially used a shared hosting service that cost just $5 per month. This shift was game-changing, enabling us to bootstrap for several years before raising any capital. We also didn’t have to worry about maintaining the machines. It dramatically lowered the barrier to entry, democratizing access to the resources needed to build a tech startup because the upfront cost of starting a software company was virtually zero.

Eventually, as we scaled, we moved to AWS, which was more scalable and reliable. Apparently, we were AWS’s first customer in Canada at the time! It became more expensive as our traffic grew, but we still didn’t have to worry about maintaining our own server farm. This significantly simplified our operations.

A similar evolution has been happening in the semiconductor industry for more than two decades, thanks to the fabless model. Fabless chip manufacturing allows companies—large or small—to design their semiconductors while outsourcing fabrication to specialized foundries. Startups like Blumind leverage this model, focusing solely on designing groundbreaking technology and scaling production when necessary.

But fabrication is not the only capital-intensive aspect. There is also the need for other equipment once the chips are manufactured.

During my recent visit to ventureLAB, where Blumind is based, I saw firsthand how these startups utilize shared resources for this additional equipment. Not only is Blumind fabless, but they can also access various hardware equipment at ventureLAB without the heavy capital expenditure of owning it.

The common perception that semiconductor startups are inherently capital-intensive couldn’t be more wrong. The fabless model—in conjunction with organizations like ventureLAB—functions much like cloud computing does for software startups, enabling semiconductor companies to build and grow with minimal upfront investment. For the most part, all they need initially are engineers’ computers to create their designs until they reach a scale that requires owning their own equipment.

Fabless chip design combined with shared resources at facilities like ventureLAB is democratizing the semiconductor space, lowering the barriers to innovation, and empowering startups to make significant advancements without the financial burden of owning fabrication facilities. Labour costs aside, the upfront cost of starting a semiconductor company like Blumind could be virtually zero too.

That’s why the saying, “software once ate the world alone; now, software and hardware consume the universe together,” is becoming true at an accelerated pace. We have already made several investments based on this theme, and we are super excited about the opportunities ahead.

P.S. This blog is licensed under a Creative Commons Attribution 4.0 International License. You are free to copy, redistribute, remix, transform, and build upon the material for any purpose, even commercially, as long as appropriate credit is given.