I agree, but would add that a frugal company will also beat a less frugal competitor (or potential competitor) - because they can advertise more, pay better etc

I agree, but would add that a frugal company will also beat a less frugal competitor (or potential competitor) - because they can advertise more, pay better etc. And when you are more frugal than your competition, you can win any competition on price, all other things being equal. I'd also suggest that VC's will always fund a frugal company over their rival(s) - although that's somewhat hypothetical as I've never accepted outside funding.