Storage on the vm won't be too much of an issue, as long as you make sure to use Object Storage (s3) for pict-rs from the start. For Lemmit (just a few users, but hundreds of communities and over 150k posts) I'm doing fine with just 2 GB of memory, 1 vcpu, and 2 GB of disk storage for postgres. The storage bucket is sitting at 36 GB.

You might want to scale up cpu and memory for more users as you grow, but you'd be surprise with how little resources you can get away.