Cost Optimization: Running Your Startup Infrastructure on $100/Month
Ryan Schaller
Principal, Coolradish
Startups waste thousands on infrastructure before they have a single paying customer. The excuse is always 'we're building for scale.' The reality is you're optimizing for problems you don't have. With smart choices and modern tools, you can serve thousands of users on a $100/month budget. Here's exactly how to do it.
Right-Size Your Database
Most startups over-provision databases massively. That $200/month RDS instance? Overkill for your 100 users. Start with a $10-20/month managed Postgres from Railway, Render, or Neon. They auto-scale and include backups. When you hit real load limits, you'll have revenue to justify the upgrade. The 't2.micro is free' mentality leads to $500/month bills because you forgot to optimize queries.
Serverless for Compute, Not Everything
Serverless sounds cheap until you have traffic. Use it selectively: Vercel or Netlify for frontend (free tier covers most MVPs), AWS Lambda for background jobs, scheduled tasks, and API endpoints with sporadic traffic. For steady API traffic, a single $5-10/month VPS on Fly.io or Railway beats Lambda economics. The key is matching workload patterns to pricing models, not using serverless because it's trendy.
Leverage Free Tiers Strategically
Every major cloud provider has generous free tiers—if you know how to chain them. Vercel free tier for frontend hosting. Supabase free tier for database and auth. Cloudflare for CDN and DDoS protection (always free). SendGrid for transactional email (100/day free). Sentry for error tracking (5k events free). The trick is staying within limits through optimization, not by creating multiple accounts.
Monitoring and Observability on a Budget
You can't optimize what you don't measure, but monitoring tools love to charge by the metric. Use free tiers of Grafana Cloud, Better Stack, or UptimeRobot for uptime monitoring. Enable CloudWatch basic monitoring (free). Set up log aggregation with self-hosted Loki or ELK stack on your application server. The goal is visibility, not perfect telemetry. Add paid tools when you have incidents that cost more than the tooling.
The Real Cost Killers to Watch
Data transfer is the silent budget killer. Use CloudFlare to cache everything possible. Store assets in object storage with CDN in front. Egress from AWS to internet is $0.09/GB—that's $90 for 1TB. Same data through CloudFlare R2 costs nothing. Other traps: forgotten load balancers ($20/month), unused elastic IPs ($3.60/month), and idle development environments. Set up billing alerts at $50, $75, and $90. Review line items monthly.
Key Takeaway
Staying under $100/month isn't about being cheap—it's about being disciplined. It forces you to understand your architecture, optimize early, and avoid premature scaling. Most startups that fail never had a scaling problem; they had a revenue problem made worse by cloud bills. Build for your current users, not your imagined millions. When growth demands more infrastructure, you'll have revenue to pay for it. Until then, $100/month is plenty.
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