This article is contributed by Andrew Alex, CEO, Spendbase
Many startup founders, especially first-timers, underestimate how quickly their runway can shrink. And while in many cases the blame falls on poor spend-limit management, the real issue lies much deeper than that.
Here’s an often overlooked factor: in reality, early small spending decisions matter far more than founders expect. Big bills? They are easy to spot. It’s the small expenses that quietly drain the budget, eating into funds that could otherwise be driving strategic growth.
Take premium SaaS subscriptions, loosely scoped contractor hours, or infrastructure that’s bigger than the product actually needs. They all feel harmless at first. But when they compound and get billed month after month, the total cost becomes drastic.
And the real danger is this: spend limits won’t fix these kinds of leaks. That’s where the spend culture should step in.
Runway Is Strategy. Spend Culture Fuels It.
Spend culture creates a predictable and controlled environment where financial decisions support product velocity rather than constrain it. And that’s exactly when the runway begins to steadily stretch.
Imagine this: your engineering team knows the cost of idle resources. Marketing can precisely track the ROI of every channel and SaaS tool. Executives have real-time visibility into burn that’s easy to monitor and manage. Sounds like a dream? Well, the right spend culture makes it real.
Spend culture helps founders build a shared mindset across the entire company, based on the idea that every dollar should push the product forward. This way, when teams invest in the right things, the business is able to grow faster – simply because the capital is working harder.
Spend Culture Foundations: Why the Earlier, the Better
Because early habits scale. How you approve tools, how you justify spend, how you evaluate ROI – all these early-stage decisions form the operating DNA of the company. If you set disciplined spending patterns when the team is small, they grow with you. If you don’t, the inefficiency grows instead.
The truth is, it’s always easier to get spend management right early on than to start with clumsy habits and hope you’ll revisit them later. Because let’s be honest: something more urgent always gets in the way, until the issue becomes so deep that fixing it takes immense effort.
Besides, expense management practices, vendor choices logic, and other ROI-related decisions are much easier to define with a team of 3-10 employees than with 50+ employees. Once spending behavior scales, it becomes exponentially harder (and more expensive) to unwind.
Let’s look at a clear example of cloud usage that needs to be optimized: with a team of 3–10, a few thousand in monthly waste is easy to spot and eliminate in minutes. You simply right-size instances, remove old environments, or apply off-hours shutdown rules before workloads expand.
But with a team of 50, everything changes. At that stage, businesses are often dealing with multi-region setups, dozens of services, and legacy infrastructure no one wants to touch. That same monthly waste has already snowballed into tens or even hundreds of thousands a year. At this point, fixing it requires heavy engineering effort, cross-team coordination, or even risky migrations.
Prevent, Don’t Fix
Many founders only “wake up” when it’s already too late and the spend drain has grown far too deep. Then comes crisis management, aggressive cost-cutting, and frantic attempts to extend runway by securing more funding that will burn just as quickly.
When the spend culture is set early on, it’s the other way around. Startup teams, instead of reacting to financial fires, are able to prevent them efficiently. Since smart spend culture is grounded in transparency, that becomes far easier.
As a result, startup founders who invest in spend culture early enjoy predictable business expenses, cleaner operations, and healthier margins. This way, they stay in control long before costs spiral. And instead of fighting for survival, they can focus on what truly matters: scaling their business and moving much faster with confidence.
Getting the Spend Culture Right: From “Who Bought this?” to “What’s the ROI?”
A spend-optimized environment starts with the right questions and the right actions. A few warning signs to consider: when finance teams act as detectives investigating unexpected bills, team leaders chase down mystery subscriptions, cloud environments run with no oversight, or no one checks whether SaaS tools overlap – that’s when the business needs to pause and reassess its expense management strategy.
In contrast, mature spending culture flips that completely. This shift turns spending into a transparent and shared responsibility, encouraging teams to justify decisions with data rather than gut feeling.
Breaking Down the Spend Culture: What It Incorporates
While not novel as a concept, there are still many stereotypes around what spend culture actually is. Some founders assume it’s simply about choosing the cheapest SaaS tools and cutting costs wherever possible. Others believe it’s all about meticulously running ROI calculations or even micromanaging who buys what. So, who’s right?
The truth is, a strong spend culture is much more nuanced than that. Some of its core components include:
- Total spend visibility into where money goes throughout the entire team;
- Clear ownership for cloud, SaaS, vendor spend, and other expense categories;
- Spend priorities closely aligned with the business goals, key milestones, and customer commitments;
- Team empowerment on making smart ROI-driven decisions enforcing rigid spend limits;
- Continuous spend optimization and shadow IT discovery.
- Guardrails for responsible purchasing through streamlined approval workflows and clear spend policies that enable speed without chaos.
The Bottom Line: Where to Start
First and foremost, gradually introduce a few spend culture “rituals” to your team. Even if you start small, the impact will show.
Some simple practices to adopt:
- Set up frameworks to measure ROI from specific tools or experiments
- Run regular SaaS cleanups and vendor reviews
- Encourage teams to compare alternatives
- Set renewal reminders to re-evaluate the need for a tool or renegotiate its price.
To get an easy start with setting up spend culture, a modern spend management platform can help significantly. Such solutions bring all your SaaS, cloud, and vendor expenses into one place while giving you the full spend visibility and control your team lacked before.
About the Author: Andrew Alex is a serial entrepreneur and the CEO of Spendbase, a Google-backed FinTech helping companies optimize SaaS and cloud costs. Fluent in tech trends and a TED evangelist, he regularly advises startups on cost efficiency, vendor negotiations, and scaling sustainably.
