We had reserved instanced and regular ones, we did not see any patterns in stability issues between those. Re: instance types - I do not really remember which instances we were using to be honest. And as for the scaling up and down - we had a hard time keeping it all up as it was, we did not want to spend resources trying to make it work with constantly changing node pools (though I understand, that it would push us to building are more robust infrastructure able to handle random node outages, we had a business to build and wanted to focus on the product instead of creating a perfectly scalable application for an early stage application).

Well I ask because reserved instances can significantly reduce the price of ec2 (up to something like 75%). Also just turning off idle instances can save a ton. If you invest the time in doing those things I think you can beat other options and so in that way, cloud infrastructure can be very economical.

It is like many other things involved in running a technology company. Investing in automation can pay off hugely.

The newer instance types are very reliable too (in my experience).

If you were using old generation instances (t1 m1 c1 etc.) your experience would have been VERY different to current generation instances (c3 c4 m3 t2). Did you try network optimized instances with (very) low latency networking?

Did you try dedicated instances?