You're right that it's a very simple product, though. $5 a month with a 20% discount for $50/yr sounds fair to me.
I like it though. Your textbook well executed MVP. The price might need some tweaks but hey, it's a product. Well done Jonas.
That makes no sense in the context of selling 0's and 1's where the marginal cost is close to zero.
What you should ask yourself is this: would you rather sell one hundred subscription at $120 per year or ten thousands subscription at $10 per year? I'm not saying these are the numbers that GP would have but you must take this into account.
Another way to put it: quite some people are very happy sitting on hundreds of thousands --if not millions-- of dollars selling games on the iPhone at less than $5 a pop.
Another comparison point: there are desktop apps way more complex than the webapp we're talking about here that can bought (not a subscription, but bought) when there are bundle sales at way less than $10. Once again, the problem is trivial: would you rather make zero sales to that target demographic (people buying apps bundles) or would you rather sell a few thousands license for you app at, say, $5?
Basically the two concepts that you don't understand are: a) economy of scale and b) it's all 0's and 1's.
"I probably couldn't even be bothered invoicing you."
That just shows how lame and inefficient your invoice and tax filling process is. (btw I can help: no latter than yesterday when the tools of the trade were posted here there were apps taking care of automated invoicing and tax fillings)
Running a service is expensive. First you have customer acquisition, which is not magical and free as you seem to believe, then you have servers to run, email services to pay, security updates, new features, server admin, customer support .. unless you are running at an amazing scale you just cannot do that for $10/year.
> would you rather sell one hundred subscription at $120 per year or ten thousands subscription at $10 per year
Where on earth are you getting these numbers from? You don't automatically get 100x the sales if you drop the price. This is just pure fantasy IMO. More likely he is going to get 100 sales either way, because he might manage to get his product in front of 100 people for whom the problem solving value exceeds the cost, and who has a $10/yr problem?
Fact is this a product targeted at businesses. The type of people who are actually interested in paying money for someone to solve their problem do not care about the difference between $10 and $100. Do you save them $101 worth of time? Then sold! If anything I would be suspicious of a low price like $10/yr because I know it's not viable.