Later, the second realization is when you start needing deeper observability, and realize you have to bring in one more platform and set it up. Just adding another service is easy, but making them work seamlessly together is much harder. In this case the "failure" is that they realize they are spending way too much time to set things up to even see what's happening in their application in prod.
This argument in favor of PaaS makes a lot of sense to me. A PaaS vendor might say, "sure, you could set up your own observability layer, configure storage for it, troubleshoot that one service that can't connect to the API's endpoint, etc. Or you could just check the "observability" box on our dashboard and boom, there it is."
I'm currently at a company that really likes setting everything up from scratch. And the amount of time my team has spent building out a platform, as opposed to providing business value, is really sobering.