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That's a good point, but generally "frugality" doesn't refer to unit costs, which are the thing you're describing. It usually points to things like "buy laptops

That's a good point, but generally "frugality" doesn't refer to unit costs, which are the thing you're describing. It usually points to things like "buy laptops on craigslist instead of new."

maccard 6y ago
I don't think that's necessarily true. There are plenty of cases where frugality would be reasonable with unit costs. A team running a k8s cluster on eks with redundancy while they're working on an MVP is likely spending 5x what they need compared to running a single fargate container/DO droplet. I would definitely consider the reverse of that being "frugal". There was a post on HN recently about a SAAS that listed out all of the SAAS products they were using, and for a team of 5 they were purchasing g suite, an email productivity "enhancer" to avoid conversations moving to slack, and a meeting scheduling tool, for 10% of their revenue (something like $150/month). Being frugal would likely have cost them less than percentage points of productivity, and increased their runway.
- spenczar5 6y ago
  Sure, there are definitely cases where you can be frugal on unit costs. I think your examples are not very good ones, though. The cost of a kubernetes cluster while working on an MVP is not a unit cost. It's a development cost. If they don't even have the MVP yet, then I don't think it's fair to say they're going to pay a multiple of that kubernetes cost for every sale - I could be wrong of course, the details matter. Your second example to me seems more clearly totally fine. Those costs scale with the number of employees, not with the number of sales. If their sales scale linearly with their number of employees, they are totally screwed under the VC funding model. As somebody upthread said, frugality is important for traditional businesses, but not so much for software-y startups. $150/month is peanuts for their runway almost certainly, too. Think about it this way: even at a meager $50k/employee/year, their costs are 99.3% in the employees, and 0.7% in those software products. Or think of it this way - $10k will cover the $150/month for over 5 years, which is a really long time.

That's a good point, but generally "frugality" doesn't refer to unit costs, which are the thing you're describing. It usually points to things like "buy laptops on craigslist instead of new."

maccard 6y ago

I don't think that's necessarily true. There are plenty of cases where frugality would be reasonable with unit costs. A team running a k8s cluster on eks with redundancy while they're working on an MVP is likely spending 5x what they need compared to running a single fargate container/DO droplet. I would definitely consider the reverse of that being "frugal". There was a post on HN recently about a SAAS that listed out all of the SAAS products they were using, and for a team of 5 they were purchasing g suite, an email productivity "enhancer" to avoid conversations moving to slack, and a meeting scheduling tool, for 10% of their revenue (something like $150/month). Being frugal would likely have cost them less than percentage points of productivity, and increased their runway.

spenczar5 6y ago
Sure, there are definitely cases where you can be frugal on unit costs. I think your examples are not very good ones, though. The cost of a kubernetes cluster while working on an MVP is not a unit cost. It's a development cost. If they don't even have the MVP yet, then I don't think it's fair to say they're going to pay a multiple of that kubernetes cost for every sale - I could be wrong of course, the details matter. Your second example to me seems more clearly totally fine. Those costs scale with the number of employees, not with the number of sales. If their sales scale linearly with their number of employees, they are totally screwed under the VC funding model. As somebody upthread said, frugality is important for traditional businesses, but not so much for software-y startups. $150/month is peanuts for their runway almost certainly, too. Think about it this way: even at a meager $50k/employee/year, their costs are 99.3% in the employees, and 0.7% in those software products. Or think of it this way - $10k will cover the $150/month for over 5 years, which is a really long time.