Right now I rent a large server to host multiple things because I don't like the limitations of their free tier. There's something very elegant about having all your "apps" isolated and with their own settings but the price must be just right. I really enjoyed using Heroku (for a client) because maintaining my own servers, even for hobby stuff, feels like such a waste of time.
[1]: http://datacol.io
$35 vs. $500 means that when you are in the bootstrap phase you do not use Heroku. Meaning you do not get used to the very nice quality of life features they have for deployment, CI, etc. Then by the time you have income or an investment switching to Heroku makes even less sense because you've already invested into whatever stack you are using.
With the availability of high level tools on AWS and GCE, it does not take that much work to get to a functional system for CI and deployment. My small team of three at my last gig managed to tie Bamboo to a large scale AWS deployment with what amounted to basically a side project worth of effort.
However, I run a machine learning service which requires ~3GB of RAM, which means I have to pay--at minimum--$500/mo on Heroku to get a single "Performance L" dyno. Google charges me somewhere in the neighborhood of $35/mo. I'm OK paying a little more for Heroku's convenience, but not 15x.
To any Heroku PMs here, are there plans to allow for custom-sized dynos or additional tiers?