His math is completely skewed. 22 sales a month of a service that charges $200/month will generate $343,200 a year (unless he's assuming 100% churn rate).
Edit: Updated now.
So yeah, if he does his 22 sales / month, at the end of the first month, you're even, and starting from month #2, you're making money.
Combine this with "It's easier to sell one time a $1000 product than 1000 times a $1 one" and you get the main idea.