Frugality breeds more frugality: if you set an example, others will follow and compound the financial savings. Frugality can result in camaraderie, since you are all in the rickety boat together eating ramen. Frugality can prevent resentment and walls going up between employees and decision makers, since even the CEO has to cut back on everyday luxuries and lives the same way employees do. Frugality can express your values by giving you an opportunity to "splurge": if you spring for a $500 chair for all the engineers but never fly first class yourself, it shows that you understand how important a good working environment is compared to other things that are perceived to be frivolous. Frugality can serve as a reminder of risk: if you're surrounded by luxuries you can forget you are actually a startup fighting to stay alive. Frugality can maintain a good relationship with investors even when the going gets tough, since it shows you're trying your best to avoid blowing their investment. Frugality can motivate employees and reward them for success, since you'll only add perks when the company can afford them, and when you do, the team made it happen not the VCs. The list goes on.