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I often wonder why investors love paying 5 figure aws bills; even worse, why they consider lower bills or not using 'the cloud' a sign of cto incompetence. Even

I often wonder why investors love paying 5 figure aws bills; even worse, why they consider lower bills or not using 'the cloud' a sign of cto incompetence. Even if the company can run on $500 hosting instead. Must be because it is easy to do DD on: AWS, check, TS (JS is now a reason to not pass VC dd I heard from friends) check , React check, microservices, check, etc.

aeternum 6y ago
Not using the cloud has many hidden risks. You need multiple physical locations for reliability, those now need to be staffed. If you instead use cheaper 3rd party hosting companies, you may have hurdles to growth and future migration cost since those companies do not have many of the certifications required. From an investor POV, paying a little extra now is often worth it to reduce risk and remove barriers to explosive growth.
- tluyben2 6y ago
  You are right but that does not really explain why you would spend so much money, masking incompetence usually. Like not having database indexes because 'the cloud scales' which I see all the time. And it does scale, running up bills for rds or dynamo to extreme amounts. And investor dd sees this as a positive, like 'spending as much as possible' somehow means things are going into the right direction. It can be, however, I think spending it like this is a weird trend. I can see the upside for many things, but you can do that efficiently, not costing 5 figures.
- treeman79 6y ago
  Was part of a company that refused to use AWS. We had migrate our servers 4 times as hosting company kept changing things, then getting purchased by IBM, then IBM was trying to figure itself out. I didn’t kill the company, mostly due to a lot of really hard work. But it came close.
- Nextgrid 6y ago
  Is that a real problem with a reputable bare-metal hosting provider? I agree that a fly-by-night VPS provider would be a major risk, but OVH for example is a major host in Europe (that successfully hosted websites long before the "cloud" was a thing). They have all the major certifications and have been in the business for two decades now and their uptime is solid. The only risk I can see is the lack of managed services, but Postgres isn't that hard to manage yourself, and other value-add AWS services can still be used (the cost savings of your baseline load being on bare-metal would most likely still offset the bandwidth costs of moving data between AWS managed services and your bare-metal host).
  - roguas 6y ago
    Sure cherrypicking postgres since it has more experience as "on-prem". Try and replicate s3 type of service for me or something like sns - even without fancy stuff.
    - Nextgrid 6y ago
      You can still use S3 even without being on AWS, though for more reasonable (< 1TB) amounts of data, old school local storage served by Nginx does the trick. For SNS, what does it offer that RabbitMQ doesn't? I've always found RMQ to be rock-solid and wouldn't use SNS anyway.
  - ok123456 6y ago
    I just call our OVH services "the could" to placate people.
ksec 6y ago
1. They are already an investor in Amazon. They have an interest, both in the actual spending and the trend setting of current and future companies to use AWS. 2. It is actually increasingly hard to get an industry wide reputable hosting provider ( Cloud, VPS , Metal or not ) that many investors could agree upon. Just like you said which makes DD harder. 3. Amazon actually offer heavy discount and even lots free credit to startup by accredited VC. Meaning the difference in the first few years is actually tiny. And in your example, if it can be run on $500 budget elsewhere you can bet it will literally be free on AWS from those startup.
dehrmann 6y ago
There's definitely a stage for startups where the AWS bill doesn't matter because sustaining user growth is more important, but there's also a stage where the company, usually B2B, is trying to improve margins because it helps a lot with valuation.
cutemonster 6y ago
DD = due diligence?
- tluyben2 6y ago
  Yes, sorry, should've said.
danjac 6y ago
I wonder if this isn't so much about the tech itself, but rather the expectation that the best realistic outcome for a startup is an aquihire. Following the current "industry best practice", even if it's more expensive and might not even make sense for your product requirements, is just insurance that your acquisition will pass a future tech compliance audit: a buyer will want to be able to support your product and cannibalize it if necessary and that's harder to do if it's written in a lesser-known language/framework. This also goes some way to explain the leetcode, "hiring only the best from Stanford/MIT" hiring nonsense for pretty mediocre cookie-cutter products that could be perfectly well executed by couple mid-range developers: your developers' resumes are as much a part of any potential acquihire package as the codebase and user data.

aeternum 6y ago

Not using the cloud has many hidden risks. You need multiple physical locations for reliability, those now need to be staffed. If you instead use cheaper 3rd party hosting companies, you may have hurdles to growth and future migration cost since those companies do not have many of the certifications required. From an investor POV, paying a little extra now is often worth it to reduce risk and remove barriers to explosive growth.

tluyben2 6y ago
You are right but that does not really explain why you would spend so much money, masking incompetence usually. Like not having database indexes because 'the cloud scales' which I see all the time. And it does scale, running up bills for rds or dynamo to extreme amounts. And investor dd sees this as a positive, like 'spending as much as possible' somehow means things are going into the right direction. It can be, however, I think spending it like this is a weird trend. I can see the upside for many things, but you can do that efficiently, not costing 5 figures.
treeman79 6y ago
Was part of a company that refused to use AWS. We had migrate our servers 4 times as hosting company kept changing things, then getting purchased by IBM, then IBM was trying to figure itself out. I didn’t kill the company, mostly due to a lot of really hard work. But it came close.
Nextgrid 6y ago
Is that a real problem with a reputable bare-metal hosting provider? I agree that a fly-by-night VPS provider would be a major risk, but OVH for example is a major host in Europe (that successfully hosted websites long before the "cloud" was a thing). They have all the major certifications and have been in the business for two decades now and their uptime is solid. The only risk I can see is the lack of managed services, but Postgres isn't that hard to manage yourself, and other value-add AWS services can still be used (the cost savings of your baseline load being on bare-metal would most likely still offset the bandwidth costs of moving data between AWS managed services and your bare-metal host).
- roguas 6y ago
  Sure cherrypicking postgres since it has more experience as "on-prem". Try and replicate s3 type of service for me or something like sns - even without fancy stuff.
  - Nextgrid 6y ago
    You can still use S3 even without being on AWS, though for more reasonable (< 1TB) amounts of data, old school local storage served by Nginx does the trick. For SNS, what does it offer that RabbitMQ doesn't? I've always found RMQ to be rock-solid and wouldn't use SNS anyway.
- ok123456 6y ago
  I just call our OVH services "the could" to placate people.

ksec 6y ago

1. They are already an investor in Amazon. They have an interest, both in the actual spending and the trend setting of current and future companies to use AWS. 2. It is actually increasingly hard to get an industry wide reputable hosting provider ( Cloud, VPS , Metal or not ) that many investors could agree upon. Just like you said which makes DD harder. 3. Amazon actually offer heavy discount and even lots free credit to startup by accredited VC. Meaning the difference in the first few years is actually tiny. And in your example, if it can be run on $500 budget elsewhere you can bet it will literally be free on AWS from those startup.

dehrmann 6y ago

There's definitely a stage for startups where the AWS bill doesn't matter because sustaining user growth is more important, but there's also a stage where the company, usually B2B, is trying to improve margins because it helps a lot with valuation.

cutemonster 6y ago

DD = due diligence?

tluyben2 6y ago
Yes, sorry, should've said.

danjac 6y ago

I wonder if this isn't so much about the tech itself, but rather the expectation that the best realistic outcome for a startup is an aquihire. Following the current "industry best practice", even if it's more expensive and might not even make sense for your product requirements, is just insurance that your acquisition will pass a future tech compliance audit: a buyer will want to be able to support your product and cannibalize it if necessary and that's harder to do if it's written in a lesser-known language/framework. This also goes some way to explain the leetcode, "hiring only the best from Stanford/MIT" hiring nonsense for pretty mediocre cookie-cutter products that could be perfectly well executed by couple mid-range developers: your developers' resumes are as much a part of any potential acquihire package as the codebase and user data.