Ask HN: Hosting for Rails-based startup

We're on the verge of launching a new Rails-based startup and we're looking for hosting advice. We're currently hosting the development version on Heroku, but we're well-aware of the costs once we launch and need to start scaling out. Because of that, we're toying with the idea of hosting it on a VPS and eventually moving to something bigger if the need arises.

We're fine with the added work of configuring the servers on our own, but we would like input or experience that anyone has had with the hosts they're currently using. I've been using Heroku for a couple of years now for most of my projects, so I'm out of the loop on who's currently providing the best VPS service. I've had personal experience with Linode and DigitalOcean, while one of our cofounders has had positive experience with 1and1. Anyone out there with some advice?