Cheap and Expensive

Aug 14, 2021

It's never been cheaper or more expensive to start a company.

Startups have never been cheaper to start. Cloud infrastructure providers offer generous free tiers and startup credits that usually cover your first years. Usage-based pricing lets costs scale with size. For every managed proprietary service, there's an open-source version that you can host and run yourself. Accepting payments is easy: just plug in the Stripe API.

Startups have never been more expensive to start. Markets are increasingly becoming winner-takes-most. Velocity is valuable, and the company with the fastest innovation can usually beat those with the best products. The SaaS model is predicated on expansion revenue – new customers need additional products or scale to increase their spend. Developers are a scarce resource and have more low-risk high-reward choices than ever before. Not only are Google and Microsoft good alternatives, but later stage startups like Stripe and Airtable can offer just as much risk-free upside.