Being frugal is essential in a startup life, but there is a thin line between being cheap (not spending at all) and being frugal. The thought of a startupper is always to get the best by spending the least. Some of the things I felt startups shouldn’t mind spending on …

• Designers are needed, esp if you are a geek:
  Hope all geeks dont take me wrong on this, but most of the geeks suck at aesthetic sense and designs. Given a mock-up, there can be none better than them to get it live on the site, but designing a mock-up requires a different (I would even say complementary) skill. If you are running a e-commerce business where most of your transactions and business is going to be online, better get someone to design the pages – even the sign-up button, it’s position, size, everything matters!
  Even though, I don’t use wufoo much, I simply love their site, their colors, the dotted underline when you hover over a button, everything is so cutely made that I was forced to use their product!
• Interns are costly – hire them
  There are tens, no hundreds of internship sites where you could post your description and some of them say ‘Rs. 1 per hour‘ – I understand you are a startup, but come on … If you really need to get your job done perfectly, you need to shell out a little. The ultimate goal should be to get the feature done (or) accomplish the sales target you have set – don’t compromise on quality
• Hosting space – get a dedicated one
  We initially hosted interviewstreet.com in MediaTemple (shared hosting space) and faced so many issues! Yes, it was cheap, much cheaper than others existing in the market, but not having a dedicated one implied you don’t have root access (you don’t have root access on your own startup?!), limit on memory limit to run django process and many more.
  We wasted 2-3 weeks of solid development effort trying to tackle all problems posed by a shared server and finally unable to take it anymore, moved on to linode
  It’s so much peaceful when your local development machine and the remote server are of the same configuration & OS – no nasty hacks on the server to get your app running.
• Accessories – laptops, netbooks, keyboards, etc
  Again, I am sure there would be a team (or 1 person) whose job role is to code. Invest in a good laptop (not netbook!), a comfortable keyboard, good internet connection – never be frugal/cheap in these. It’s extremely frustrating to work on a bad keyboard with slow internet speeds – this frustration can make the developer stop coding!
• Stay Connected
  Customer service is a key element in a startup – replying to e-mails spontaneously brings so much joy in a customer. A data card (or) a phone with GPRS facility to keep a tab on customer activities and getting back to them tells a lot about your startup. Invest in them

There are so many other ways of saving money (work-from-home), economical travelling, etc – when you are running an e-commerce business, don’t hesitate much to spend on technology if it’s going to improve the productivity of the overall company. To be honest, I didn’t do anything of what I stated above initially , but slowly realized and have almost done everything.