Any idea how many people use Hey.com? That might be an early indication as to how scalable this is (at least for hotwire's concerns)
What doesn't work quite as well is when the app is operating a freemium / ad based model. Where a large volume of traffic are required before you start generating revenue.
You don't need scale at a startup. You need velocity. If you're hitting scale at a startup, you've done one of two things:
* Written absolutely terrible software
* Succeeded
Unless you've hit the second one, it will almost always be cheaper to simply spin up another server.
It's basically here's my app that does billions of things and wants billions of users and runs on potato thing.