How much it costs me to run my SaaS's in 2024
Summary
TLDRIn this video, tech founder and Senior Software Engineer Anthony shares an in-depth breakdown of the costs associated with running a tech startup. He discusses two of his ventures, an Esports startup and a new influencer marketing platform, detailing monthly expenses such as AWS, Heroku, Versal, and other tools. Anthony emphasizes the importance of optimizing costs, recommends alternatives to AWS, and shares insights on managing overages and selecting the right tech stack. His goal is to inform and guide those curious about the financial aspects of tech startups.
Takeaways
- 😀 The speaker, Anthony, is a tech founder and Senior Software Engineer who shares insights on the cost of running tech startups.
- 💻 Anthony has experience with two tech startups, one an Esports startup and another a platform for marketers to find influencers.
- 💰 The older Esports startup has reduced its AWS costs from $600-$700 to $250 a month by moving services off AWS, with the remaining cost for an RDS Postgres database.
- 🔧 Heroku is used for backend services and costs around $82 a month for the Esports startup.
- 📊 Versal is used for analytics and costs around $20 per person plus $10 for additional analytics, but has caused unexpected high costs due to overages.
- 🕊️ Upstash is used for caching and costs around $100 a month, helping to manage intensive data aggregation.
- 📝 Better Stack Logs is used for logging and costs $85 a month, offering great support which Anthony highly recommends.
- 🌐 Cloudflare is recommended for domain hosting and DNS, with a Pro Plan costing $20 a month.
- 🚀 For the newer startup, Anthony avoids AWS, using a simple Heroku runner for $10 a month and Verso for $20 a month.
- 🎨 Figma is used for UX designs and is praised for its generous free tier, suitable for extensive design work.
- 🔗 Superbase is used for the new startup's database needs, with costs varying based on the number of records.
- 📈 PostHog is suggested for logging and feature flagging, with a generous free tier suitable for many startups.
- 🛒 Stripe is used for payment processing with fees based on a percentage of transactions, beneficial for businesses with frequent payments.
- 📈 The total monthly cost to run the Esports startup is $600, which Anthony considers reasonable for the scale of the application.
- 💡 Anthony emphasizes the importance of using free tiers and the right tools to keep startup costs low, highlighting the benefits of being a programmer and understanding industry tools.
Q & A
What is the main focus of Anthony's first tech startup?
-Anthony's first tech startup is an Esports startup focused on the game Valorant, where they cover all the matches and provide services to professional teams, including analyzing a large number of series played within the Valorant scene.
How many Heroku instances does Anthony's startup use and what is the cost?
-Anthony's startup uses around four or five Heroku instances to handle various different backend tasks, such as getting data from different sources and running Discord bots. The cost for Heroku instances is approximately $82 a month.
What is the main issue Anthony faced with Versal's billing system?
-Anthony faced significant overages with Versal's billing system when his site was DDoSed, causing the backend to crash and the frontend to hang, which resulted in excessive serverless function running times. This led to extra charges of $400 in one month and $600 in another due to exceeding the free limit of GB hours.
What is the role of Upstash in Anthony's startup?
-Upstash is used for caching in Anthony's startup. It caches the most popular pages over the last 30 days to reduce the intense data aggregation on the backend that would otherwise be required to constantly pull data for viewers.
How much does Better Stack Logs cost for Anthony's startup and what do they use it for?
-Anthony's startup pays $85 a month for Better Stack Logs. They use it for logging to ensure that if anything goes wrong, they can track down where the issue is, which saves them time during debugging.
Why does Anthony recommend Cloudflare for domain hosting?
-Anthony recommends Cloudflare for domain hosting because it offers peace of mind, ease of use, and additional security features like the 'under attack' mode, which helped him keep his site running during a DDoS attack.
What is the total monthly cost to run Anthony's first tech startup?
-The total monthly cost to run Anthony's first tech startup is $600, which includes various services like AWS, Heroku, Versal, Uptime Robot, Upstash, Better Stack Logs, and Cloudflare.
What is the main purpose of Anthony's new startup?
-Anthony's new startup is designed to help marketers find influencers to work with by allowing them to search up influencer and creator profiles and view past advertisements and brand collaborations.
How much does Anthony's new startup cost in terms of AWS usage?
-Anthony's new startup does not use AWS, as they have a simple Heroku runner for the backend, which costs only $10 a month.
What is the cost of Verso for Anthony's new startup?
-The cost of Verso for Anthony's new startup is between $10 and $20 a month, which is for the basic Pro Plan.
What is the cost of AI training on data for Anthony's new startup?
-The cost of AI training on data for Anthony's new startup was a significant upfront cost, with an ongoing cost of $30 a month.
What payment processing service does Anthony use and how does it charge fees?
-Anthony uses Stripe to collect payments from teams and marketers. Stripe charges a percentage of the transaction amount plus a small flat fee on top of it, with no flat monthly fee.
What is the estimated cost for a new SaaS startup if coded by the founders themselves?
-If the founders code the startup themselves and do not use a subscription to a no-code tool, the estimated cost could be under $50, mainly covering the domain and possibly cloud hosting like Cloudflare.
Outlines
💻 Tech Startup Costs Breakdown
Anthony, a tech founder and senior software engineer, shares his experience running two tech startups. He discusses the costs involved in maintaining an Esports startup focused on the game 'Valerant'. The platform includes a data team, heavy compute processes, and various services for professional teams. Initially, AWS was the primary hosting service, costing around $600-$700 per month, but costs were reduced to $250 per month after migrating most services off AWS. The remaining AWS cost is for an RDS PostgreSQL database storing extensive match data. Other costs include Heroku instances for backend services, Versal for analytics, and various other tools and services like Uptime Robot, Upstash for caching, and Better Stack for logging. Anthony emphasizes the importance of optimizing code and services to manage costs effectively.
🚀 Running Costs for Established and New Tech Startups
The speaker provides an in-depth analysis of the operational costs for his established Esports startup and his new venture. For the Esports startup, he details the cost breakdown, including AWS, Heroku, Versal, and other services, which total around $600 per month. He also shares a cautionary tale about unexpected overages with Versal due to a DDoS attack, which significantly increased costs temporarily. For the new startup, which is a platform for marketers to find influencers, he explains that costs are minimal, with a simple Heroku backend and Versal hosting. He also mentions the use of Figma for design, Superbase for database management, and PostHog for logging, emphasizing the affordability and efficiency of these tools for new startups.
🛠️ Tools and Strategies for Cost-Effective Startups
Anthony concludes the video by discussing the tools and strategies he uses to keep his startups cost-effective. He recommends avoiding AWS for new developers and suggests using GitLab for deployments and CI/CD, which he has used extensively without cost. For the new startup, he highlights the use of free tiers and affordable services like Heroku, Versal, Figma, Superbase, PostHog, and Cloudflare. He also mentions the use of AI training for his data and Stripe for payment processing. Anthony advises that with the right knowledge and tools, it's possible to host a new startup for under $50 per month, emphasizing the benefits of building and managing the startups personally.
Mindmap
Keywords
💡Tech Startup
💡Esports
💡AWS (Amazon Web Services)
💡Heroku
💡Versal
💡Data Aggregation
💡DDoS (Distributed Denial of Service)
💡Cloudflare
💡Superbase
💡Influencer Marketing
💡PostHog
Highlights
Anthony, a tech founder and Senior software engineer, shares the cost breakdown of running two tech startups.
The first startup is an Esports platform for the game Valorant, with a data team of 10 maintaining the platform.
The platform analyzes hundreds of thousands of series played annually in the Valorant scene.
Server costs for the Esports startup are surprisingly low, with AWS costs reduced from $600-$700 to $250 a month.
Heroku is used for backend services, costing around $82 a month.
Versal is used for analytics and costs $20 per person with an additional $10 for analytics features.
Versal's overages due to DDoS attacks led to unexpected charges of $400 extra in one month.
Upstash is used for caching, with a monthly cost of $100 for the pay-as-you-go plan.
Better Stack Logs is used for logging, with a $85 a month plan for peace of mind during debugging.
Cloudflare is recommended for domain hosting and DNS records, with a Pro Plan costing $20 a month.
The total monthly cost to run the Esports startup is $600, including various services and tools.
GitLab is praised for its free services, including CI/CD and private repos, being better than GitHub.
The new startup focuses on influencer marketing, with a simple website and Heroku backend.
AWS is not used in the new startup due to cost-effective alternatives.
Superbase is used for database management, with a higher tier for performance on dynamic queries.
PostHog is recommended for logging and tracking within startups, with a generous free tier.
UI frameworks like Shards and Tremor are free and should not incur costs.
Stripe is used for payment processing with a percentage-based fee and no flat monthly charge.
The new startup's costs are significantly lower, with a focus on cost-effective tools and services.
Transcripts
hello everyone welcome back to the
channel my name is Anthony I'm a tech
founder and Senior software engineer and
today I'm going to break down the cost
of running a tech startup now I've
started one Tech startup four years ago
and it is still running to this day and
I just started another one a couple
weeks ago and I'm going to run you
through and break down the cost for both
of those and I think you'll be surprised
by the numbers and if you like this
content make sure you subscribe I talk
about tech startups all the time and
just Tech memes in general and stuff and
if you have any comments and want me to
cover other stuff and you're curious
about other things let me know in the
comments so first let's cover the
startup that I made like four years ago
it is an Esports startup and as you can
see it looks kind of simple it's for an
ort named valerant and essentially we
cover all the matches now there's a lot
going on here there's like I think nine
active repos that support this
development um we charge professional
teams for all kinds of like services and
there is a lot of heavy compute
processes going on here we are doing
things like analyzing hundreds of
thousands of series that get played
every single year within the valerent
scene scrims that are private to teams
also get tracked and sent to our servers
and we just have a lot of stuff going on
here we have like a data team of around
10 people working around the clock to
support and maintain all the data on
this platform now you might think
something like this costs a lot to run
in terms of software but it's actually
kind of cheap in terms of server cost so
let me break this down number one we
have AWS when I first started this uh
platform four years ago I had everything
on AWS the deployment the site the back
and everything I have since moved almost
everything I can off of AWS our AWS Bill
used to be around $600 to $700 a month
and after moving everything off it is
now only $250 a month and that $250 is
essentially for an RDS pretty much a
postgress database that stores like
hundreds of gigabytes of data on it like
we literally have every single valerant
competitive valerant match that has been
played within the last four years pretty
much since the game has started in our
database it's the biggest valerant
database of matches like I think that
anyone has um for competitive matches
and it only costs us $250 a month so
while I hate AWS for almost everything
else and if you are a new developer or
someone that's creating something for
the first time and deploying it I have
been using AWS for the past like almost
10 years now and I would highly
recommend steering clear of it if you
can and even for a database you'll see
in in the later part of this video I
don't even use AWS anymore but if you
can just stay away from AWS it is such a
pain to work with and there are
individual solutions that do everything
that AWS can do but better cheaper and a
lot more easier and way less time
involved um trust me the next is for
Heroku we have around like I think maybe
four or five Heroku instances up and
running to handle various different
things and these are just like node
backends that support getting data from
different places because we have so much
data coming in from different sources so
many data is going out we have a lot of
stuff that happens on Discord where we
have Heroku Bots um that are our Discord
Bots essentially and they run on Heroku
so Heroku roughly costs us about $82 a
month um then we have versal so versal
is a pretty cheap cost
until they charge you overages which I
have an interesting story about but
pretty much it's just me and my other
co-founder so I think it's like $20 a
person for the Pro Plan or something and
then we pay $10 on top of that just for
analytics which is sort of like Google
analytics um it just tells you how many
visitors come to your site and stuff
like that so it's not too bad however
versal has been by far the most
egregious when it comes to overages and
charging you and I know they made a
pricing change to help this but one
month we had a bunch of people dossing
our site um and wanted done happening is
they sort of caused our back end to
crash and because our back end crashed
our front end would sort of hang trying
to get data from the back end and when
your front end makes a request on the
server side it's making that request
through versal and each one of those
requests would hang for 30 seconds which
means versal would have one of their
serverless functions running for 30
seconds at every single request and what
that means is essentially you get 1,000
GB hours for free on the Pro Plan but
then every 100 extra gigb on top of that
is $40 which means if you hit your limit
every 10% of what the original limit was
is an additional $40 which is an entire
month cost and when we got dos that one
month over like 3 days we went over this
like limit by like I think 1,000 Gaby
hours which means we got charged an
extra $400 by versal and I reached out
with the to them and I tried to explain
our situation and they just never
responded and I reached out to them
twice because this happened on two
separate occasions and it was just
insane we ended up paying like $600 one
month and I think $400 another month
because of these overages so I have been
pretty uh not happy with versal the way
they did their billing and stuff like
that I think I remember seeing a Twitter
thread where they were thinking of
changing it so it might get better in
the future but versal it's like they
make it look so simple with like $20 a
month but then once you start getting
users and for reference like our site
gets around 500,000 page views a month
once you start getting a couple of users
and stuff like that and if any anything
in your code is not perfectly optimized
for like all these random standards
they've set up for what they're going to
charge you extra for there will come a
time where you will probably get charged
extra from versal and that's just a
matter of fact and um I love versal it's
so easy to they make it like seamless to
use they may nextjs who doesn't like
nextjs other than a lot of people but
their pricing and the way they did that
is kind of horrendous and they make it
so easy to sort of fall into that pit
trap and they're very unresponsive about
it I reached out twice nobody responded
on to the next thing because I could ort
of complain about versal for a very long
time we have uptime robot this is just
something that helps us monitor uptime
for our site you probably don't need it
if you are a newer site because your
site's probably not going down too much
but we pay $10 a month for this and it
pretty much just tells us whenever the
site's going down next we have up stash
up stash is where we do our caching so
because our SAS has so many pages one
for each Series so there's something
like I think maybe 2 80,000 Pages for
rib. I think it's more than that the
last time I checked like how many pages
Google is indexed we pretty much cash
the most popular pages over the last 30
days because it's a lot of intense data
aggregation on the back end to
constantly pull that data over and over
again for all the people that are
viewing it so we use a reddis uh to cash
our stuff and we use up sash with redus
a lot of the times we've gone over our
cap and our budget and they'll send us
emails and stuff like that and they'll
degrade our performance but we found a
good metal around with paying $100 which
I think is part of the pay as you go
plan um and and it's been fine so far
next we have better stack logs this is
what we use for our logging and stuff
like that and honestly the free tier is
insanely good the only reason we're on
the small team thing is because every
time somebody Vis starts our site we do
a bunch of logging just to like make
sure if anything does go wrong we can
track down where it is it saves us a ton
of time when debugging over the past
four years you can imagine the site has
gone down a lot of times and we have
spent a lot a lot of hours midnight
overnight to try and figure out what's
going on and fix it so we pay pay for
the Peace of Mind of not having to worry
about not being able to reproduce
something or seeing what happens we have
a lot of logs and because of that we
have to pay for the $85 a month plan but
the support from better stack is one of
the best supports I've ever seen in my
life um I've been talking to the team
for the past like 3 months because we
had an issue with our billing and they
have been absolutely phenomenal to work
with so I highly recommend using better
stack for logging you could probably get
away with their free tier it's extremely
generous lastly we have Cloud flare I
talked a bit about this in my other
video of Tech stack but I recommend
buying your domain through cloudflare
and I recommend just going onto the Pro
Plan um I don't know why it's like not
showing up over here but essentially the
Pro Plan is like by far more than good
enough it's like $20 a month and it
gives you so much great stuff um for it
and cloudflare is like the best place
you can host your domain the best place
to like Point DNS records over to your
like hosting providers and stuff like
that when we were under attack I told
you we had in in another video I
mentioned it I had to switch us over to
cloudflare and then use their under
attack mode to get the site up and
running so that I could later on figure
out a more long-term solution to deal
with the dsing but having your domain on
cloud flare gives you so much peace of
mind in the long term it's the easiest
thing to work with they have unlimited
features in case you need additional
things don't use GoDaddy don't use name
cheep don't use AWS definitely don't use
any other way to buy your domain get
Cloud flare I guarantee you it just buys
you so much peace of mind that brings
our total to $600 a month to run this
startup that brings in a decent amount
of money just from people using our
analytics it has a Discord bot um that
people interact with on the daily basis
it does hardcore data aggregation it has
a whole like custom CMS that I built for
10 plus people at a time to be entering
data into the database and managing data
it's a giant application and $600 a
month is pretty good I think in my
opinion um at some point in time it was
a lot higher than this and then we took
a lot of measures like I said we moved
out of of AWS blah blah blah to to
reduce that cost um I should also
mention a lot of our deployments was
done through gitlab which I have paid
nothing for gitlab and I have used their
cicd we have almost 100 I have made
almost 100 private repos on gitlab and I
have like five private mpm packages on
gitlab and I've never paid a dollar they
are by far better than GitHub I highly
recommend it now let's talk about the
pricing for my new startup so this is
probably going to even be a bit more
than like what you guys would pay if you
are creating something especially if
it's a project if you are doing just
like a personal project or you're
launching your first website and it's
not that complicated you probably are
paying almost nothing at all if anything
so first of all let's talk about AWS I
don't use AWS like I said for anything
in my new startup and I'll just um go
ahead and show you the website very
simple website very simple startup it
allows you to search up an in influencer
Creator's profile you get a bunch of
information on them you can search up
for advertisements that brands have done
in the past and it's to help marketers
essentially find like influencers to
work with so that's what the idea is and
while there is a lot of like background
processing going on it's very cheap
background processing so um we don't
need AWS we just have a simple Heroku
runner for a backend and I explained
this more in my other video um if you're
interested in looking at it the video
where I talked about the actual like
Tech stack um you can see why I'm using
Heroku but it's a basic Runner and it's
just $10 a month it's super cheap uh
super performant you probably don't need
to go past the $10 a month one now for
Verso we pay 10 $20 a month it's just
like the B basic Pro Plan um so it is
pretty cheap we use figma to create all
our ux designs I have another video on
that as well figma is great because
while it has a free tier that might feel
limiting you can sort of just create as
much as you want within that free tier
like they give you access to three pages
but the pages are infinite so you can
create like whatever you want in those
three pages so I don't think you have to
pay for figma it's a great tool by far
if you're going to do any ux work it's
like the tool you should use there's no
XD that or anything else like that that
comes close to how good figma is super
base you will probably be on the free
tier if you're using superbase and you
don't have a lot of Records while this
company is new we already have 65,000
records of Instagram users and out of
those 65,000 users I think we have
225,000 U media objects so like
Instagram posts across all of those
users and because we're querying quite
dynamically across those records we have
also records for like in embeddings
which are some like uh AI thing across
all of them as well so we have almost
like a million uh within a month we got
up to like a million records in our
database and that's why I upgraded us to
a higher tier database just so it's a
bit more performant and it's faster but
if you're like doing stuff where you're
only like storing maybe like 50,000
records at most in your database you
could probably get away with just not
even paying for super base so like right
here like superbase I think probably
Heroku um and like like maybe all this
Miss stuff which we'll talk about in the
SEC is probably going to be nothing um
for you guys if you're just running like
a basic startup or like your first
project and stuff like that we haven't
integrated post hog yet but I have
talked to some of the guys there and the
free tier is extremely generous it's
sort of like better stack it helps you
like keep track of logs and keep track
of like a couple of different things
within your startup they actually
provide a lot of different um plans and
and things that they allow you to record
and it's something that like the
majority of why combinator sasses end up
using and a lot of them are still in the
free tier so I'd recommend checking out
post hog if you need anything related to
logging and stuff like that um and even
like deployment stuff I think they have
like deployment AB testing for feature
Flags if you're into that type of stuff
so there's a lot of great stuff there I
recommend checking it out um Cloud flare
I talked about this $20 a month so worth
it um definitely doing it the UI
Frameworks like you know Shad CN or like
Tremor and stuff like that those are all
free you shouldn't ever pay for a UI
framework or a UI template or something
like that um there's enough free stuff
out there for you to use and finally we
have some mys expenses like we had to do
a lot of AI training on our data um so
it was a big upfront cost and on the
ongoing cost it's like $30 a month and
for our other company we use stripe to
collect payments from teams and we'll
probably use stripe again to collect
payments from marketers and they don't
charge a flat fee the fee is usually a
percentage of the transaction plus a
small flat fee on top of it so no flat
monthly fee um and as long as you're
charging like more than like $4 to $5
per
use or whatever stripee is like pretty
good to go with the transaction fee the
flat transaction fee doesn't really do
too much for you so I would have to
estimate if you guys are starting your
first SASS and stuff like that and all
honestly if you're coding it yourself
and you're not like using a subscription
to like bubble or some no code tool and
stuff like that you can get away with
like only paying for the domain
cloudfront maybe like versal to host the
thing in production properly and that's
probably it honestly um you can get away
with hosting like a brand new startup
for under $50 and that's the beauty of
being a programmer and building
something yourselves and knowing a lot
about like the industry and what tools
are available out there because nowadays
A lot of these tools they get you hooked
by giving you that free tier and then
they they grow in Revenue as your
business grows in uh volume so as soon
as you start getting more customers and
stuff like that that's when these guys
start to take a cut but hopefully by
then you're making enough money to cover
that anyways and if you enjoy this video
let me know sub leave a comment and I'll
see you guys in the next one
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