Have you run your own servers in a colo? I've done it myself.

One person, with maybe 3 hours a week of time investment after a few weeks of setup and hardware purchase. Using containers I can move between the cloud and my own servers seamlessly, and long as I never bite the golden apple and use any of the cloud's walled garden "services" like S3. If I need more power I can spin up some temporary servers at any cloud provider in a few hours. For me the cloud is a nice thing because I don't use too much of it. If AWS disappeared tomorrow it would be a mild inconvenience, not devestating like it would be to many newer unicorns.

Go ahead and try to use the cloud you're paying for as a CDN or DDoS sheild, or anything amounting to a bastion of free speech. You'll quickly find out that your cloud provider doesn't like you to use all the bandwidth and CPU you pay for, and they don't like running your servers when they disagree with your views. They quietly overprovision everything pulling the same crap as consumer ISPs where they sell you a 100mbps line and punish you if you use more than 10 of that on average. That's the main reason the cloud is so cheap.

Hardware is cheap, colo's are cheap, software is largely easy to manage. The economy of scale they enjoy is from vendor lock-in and overprovisioning more than anything else.

Is it really that hard to double the amount of servers you own every few weeks? No! If you're using containers or managed KVM you can mirror nodes basically for free over the network as soon as the Ethernet is plugged in. Your time amounts to what it takes to put the thing in a rack, plug in the Ethernet, and hit the "on" button. Everybody in SV land thinks you have to use cloud to "scale massively" but they forget that all of today's technology behemoths were built years ago when the cloud didn't exist. Oh yeah, they all still run all of their own hardware too and have from the early days. Using their model as a template, you should own every single server you use and start selling your excess capacity once you get big enough.

Did you ever read about how Netflix tried to run their own hardware but can't because they have so much data in AWS that it would basically bankrupt them to extract it? Look at how these cost models work. Usually inbound bandwidth is extremely cheap or free but outbound is massively more expensive than a dedicated line at a datacenter, 50-100 times the cost if you're saturating that line 24/7. The removal fees from a managed store like S3 or glacier are even more ludicrous. The cloud is like crack and as soon as you start using it more than a few times a year you will get locked in and unable to leave without spending massive $$$. Usually companies figure out this shell game once they're large enough, but by then it's far too late to do anything about it.

Why are they marketing these things so heavily to startups? Because lock in is how they make their money. They make little or nothing on pure compute power, but since you don't have low level hardware access they can charge whatever the hell they want for things like extra IP's, DDoS protection, DC to DC peering, load balancing, auto scaling. You give massive discounts to new players using these systems and inevitably some of these will become the next Uber or Netflix. Then you are free to charge whatever exhoribitant rates you please once it's so impractical to move that it would require a major redesign of the business.

I see it a lot like franchising. By building on Amazon's cloud services you become "Uber company brought to you by Amazon". Like franchising, your upside is limited because any owner with a significant share of total franchises will begin to put pressure on the service owner itself.