I am asking because I expect hosting costs to be my most expensive item while in the MVP stage, and I don't have a lot of cash to throw at my project.
With this setup, I've tested 200 concurrent users with no major problems, and would support easily tens of thousands of hits per day.
Having too many users is a problem I would love to have!
Good luck, and I hope you end up with a scaling problem to solve.
If you're inexperienced in server administration, go with Heroku I'd say. It's a great service and works really well and if you do get a load of traffic, it's really easy to scale up. There's a guide here to using unicorn to get 4X the performance out of it:
http://blog.railsonfire.com/2012/05/06/Unicorn-on-Heroku.htm...
You're correct in saying $40 per month for hosting until I gain more users. If someone would sign up to my "pro" plan I'd be breaking even :)
However I don't think that even if it does take off it will be as profitable as it sounds. It seems customer acquisition is going to be my biggest problem and so I'll probably end up spending lots on adwords and other promotional avenues.
That marketing plan I sent you covers only the basics, but perhaps with enough consistent effort the basics might be enough to drive initial traffic.
As I said, if there's anything I can do, let me know.