Amazon AWS free credits are a type of currency and are the lifeblood of many startups. Companies can experiment on AWS (Amazon Web Services), get used to it, get their applications deployed, or scale them. So, for Amazon, it’s an amazing loss-leader, so they love giving out free usage of their web services to get companies hooked. But, I get questions like: “How should a startup manage its Amazon free credits?”, “How are we supposed to manage this? How do we maximize our credits?” Let’s explore the answers and more.Tips to Maximizing Amazon AWS Free Credits:
- There is a lifetime limit of $100k in credits
- Two approaches
- Possible to receive $100k upfront in free credits but only have a year to use them
- $5k upfront, then another $10k, then another $15k, then the big one ($100k total)
- Take it slow, don’t waste the credits
If you have gone through Y Combinator or Techstars, or like a Tier 1 VC firm, the first path is to ask and receive $100,000 worth of free credits. You will get that.
There’s one catch though, in that you only have a year to spend them, and the lifetime cap of AWS credits is $100,000! So you basically are getting it all up front, and you only have a year. Now the tricky part about this is a lot of early stage startups actually can’t spend $100,000 a year, because they don’t have the customer usage to drive the use of their Amazon credits up, and so they end up having 50, 60, $70,000 worth of credits expire, they can never get those credits back, and they didn’t maximize that.
The preferred way, the $ 100,000-lifetime credits limit in mind, is to start slow, get five or $10,000 worth of credits, and you can get this through Amazon. You get this through incubators, there’s a bunch of different ways (we’ll list the top ways we see our clients getting free AWS credits below0, and then once you use those, go up another 10K, and then you go up another 10K, and you are at 25, and then the grants can actually start getting bigger.
And then you can hit up the Y Combinator, Techstars, Tier 1 VC, whoever you know in that world, and get the big giant grant that will take you from maybe like 20 or 30,000 that you’ve already used, up to the 100K. But at that point, you are able to use that incremental big chunk of credits.
Take it slow. It is like ordering a pizza. You are not going to try to eat the pizza all in one sitting, right? So order a slice, order another slice, order another slice, and you’ll actually get way more usage out of it. That way, if you do the incremental approach, you are not going to waste a bunch of credits.
How to Get AWS free credits
So how do VC-backed companies get credits on Amazon Web Services?
- Ask your VC - many venture firms have relationships with the AWS team, and they can get you free credits just by being in the VC’s portfolio. YC isn’t the only one!
- Try the AWS Free Tier - learn more here.
- Check out AWS Activate, but first go through your VC since they may have a “bigger” offer.
- Attend an Amazon webinar - they sometimes give away credits. See upcoming events here.
- Get a Brex or Ramp card - these credit cards offer some great perks, including AWS ones. Most of our clients have used these very successfully.
- Some banks have relationships. Read about the best banks for startups.
- Become a Kruze client:
At Kruze, we do a lot of work with Amazon. We are happy to introduce you to them if you are one of our clients looking for credits, but please, just be careful, and don’t go for the $100,000 credits right away, unless you are absolutely positive you can use those credits. Hope that helps, if you have any questions free to contact us.
