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Most people with interesting side projects aren’t stuck by a lack of $500.

I think this says a lot about your peer group and your lack of awareness about people outside of it.

It's a start. Lots of teenagers would love to take that sort of deal.

Yeah, but then it's not something "your work won't pay for".

$500 is a nontrivial prototyping budget for stuff like PCB development, 3D printing, prototyping small/simple machined parts, etc.

If hosting costs are a concern: both Google Cloud and Microsoft Azure give away $300 and $200 in credits, respectively, for new accounts.

So, the selected project should spend that money on other kind of services like databases, CDN, analytics or other any similar that usually don't have a starter/free tier