As I wrote further up, there's not just colocation and AWS. Dedicated servers are a great fit for many start ups and need no capex. You just rent hardware month

As I wrote further up, there's not just colocation and AWS. Dedicated servers are a great fit for many start ups and need no capex. You just rent hardware monthly like you lease most of your office equipment. Much cheaper than AWS, no hardware expertise needed and even (manual) scaling over time works quite well, it's easy to add servers within a day or so. Sure, you'll always have idle capacity, but this way you could use it. With AWS, Amazon runs that idle capacity and charges you for it.