The Cost of Running a Startup can get out of control

We all love talking about the services out there to make running a startup easier.   Something like monitoring your applications performance or managing newsletters would fit the bill.

For the average well funded startup, paying for additional services is not a big deal.  To the bootstrapped startup, it is an extremely important decision.

Just to name a few:

  • NewRelic – realistic price: $150 per month.
  • SendGrid – realistic price: $9.95 or $79.95.
  • MixPanel – realistic price: $150.

Right off the bat we are talking an additional $310-$369 per month.

There are plenty of other nice services to have like UserVoice ($20) or Basecamp ($30).

You’re going to want to have a CDN too, don’t you think? MaxCDN ($39.95) might be an additional bill.  You’ll also need a place to host your code, so in all likelihood GitHub ($7 or $25) will be an additional bill.

How are small bootstrapped startups supposed to maximize their potential without blowing their budget on these additional services?

Research and use the bare minimum of what you need to get by.  Email each website to see if they have some type of discount for a tiny startup.

NewRelic, or any similar service, is a must to squeeze the most out of your hardware stack. It’s a great company that will actually work with you on the price if you are a tiny start-up.  SendGrid is overpriced in my opinion, so use Mailjet or Amazon SES to get the most bang for your buck.

In fact, a good rule of thumb is to check to see if Amazon offers the service that you need.  They tend to be the least expensive in just about every category, whether it be mail or CDNs or DNS.

MixPanel is also overpriced (sorry, don’t hate me), use something like Clicky instead or just stick with Google Analytics for the time being.

Do NOT spend more money on additional startup services than your hosting bill.  If you are, then you’re doing it wrong.  If your hosting bill is more than $250 a month and you have less than 1,000,000 pageviews per month, then you are doing it wrong.  If you don’t know what your monthly expenses are, then you are doing it wrong.

Big startups don’t have to worry about things like this, but the little guys do.  Make smart, well researched decisions and you should be able to get most of what you want for under $500 per month.

I run a fantasy sports company called FantasySP and my monthly bill for core hosting + github + newrelic + mailjet + CDN + clicky + rackspace cloud is approximately $304.