The cost and performance models are two of the key drivers of the popularity of serverless and Function-as-a-Service (FaaS).
Cold starts have gone down a lot, from multiple seconds to 100s of milliseconds, but there is still much space for improvement.
There are various techniques that are being used to improve the performance of serverless functions, most of which focus on reducing or avoiding cold starts.
These optimizations are not free; it is a trade-off between performance and cost, which depends on the requirements of your application.
Currently, closed-source serverless services offered by public clouds offer few options for users to influence these trade-offs. Open-source FaaS frameworks that can run anywhere (such as Fission) offer full flexibility to tweak these performance/cost tradeoffs.
Serverless computing is not just about paying for the resources that you use; it is about only paying for the performance you actually need.