Software startup can use consumer grade workstations and self host at their office (or at home). Cloud at scale is VERY expensive. And if you do not need the scale, but reliability, it is easier to rent two servers at coloc.
Yeah, just don't forget the backups and monitoring, the networking setup (load balancing between your two servers or workstations at the very least), patching, moving to new servers/workstations when you outgrow the current ones (while also taking the risk of overprovisioning) etc.
Or just throw it all in a PaaS, ideally a container-based one (like Google Cloud Run or AWS Lambda or Scaleway Serverless Containers) where you won't have any lock-in and migrating away to something that makes more sense at your new scale would be easy. The only concern that would remain in that case is data backups to a different provider/place - scaling up/down is automatic, monitoring (at least the basics) are already covered, and there's no patching outside of your application's libraries.
For "throw it all in a PaaS" you need dedicated person, monitoring, billing etc... It is more expensive, not simpler. Cloud provider may also terminate your accounts, change settings etc...
My clients spend a lot more on AWS bills than they would on self-hosted infra; $1000ish compared to $200/mo from self-hosted or a pair of $1000 servers colo'd for about $100/mo. They get a lot more - Reliability and support channels. That's what they're paying for. Absolutely, I recommend that they when they scale, they move their most expensive parts in terms of AWS costs (bandwidth-intensive things like gameservers and media bouncers) from AWS to self-hosted, because those are the things that are too expensive on AWS and have reliability properties where "Throw a bunch at the wall, fail them fast" is a good guarantee. For your production backups, don't rely on simple scripts. Don't rely on complex scripts. Rely on commonly tested solutions of other people's amortized experience.
Was there a specific kind of startup that you had in mind for this?
Does it make sense to abandon the entire cloud because of 1 use case?
I was never on cloud. I have a big home with fiber connection and some backup connectivity. Setting up new server is like $50/year in electricity. If project works I will sell it, and let new owner deal with cloud and scaling it up!
Just reading price list from cloud providers gives me a headache. We will charge you between X and Z, and hopefully you will not bankrupt on next bill. Also we may terminate services anytime for whatever reason.
> unicorn machine
If you have a specialized startup, that is 90% of your cost! Not some sort of unicorn single machine. If you can use consumer grade hardware without extra cost, that is major competitive advantage!
> VPNs and hybrid architectures
What is that? Do I have to study that? Seems like a major obstacle!
Of course, those prices to rapidly up if you use serious data. Want to train your fancy ML model to draw cats based on your giant data set of customer cat photos stored on S3? Want to do it on your nice nVidia box at home? That, by itself, might cost as much as an expensive Silicon Valley FTE who could manage an entire installation in a colo facility nearby.
And that's why the rent-seekers got that covered too by outrageous egress bandwidth fees, to ensure they still get their cut no matter what.