He said it was recurring revenue and the context in which he said it implied annual. He also said they kept the team down to three until right before launch and only once they had predictable revenue did they start bringing the remainder onboard. He further explained that during development the team performed client work, which would have further offset their costs.

It is very likely that the run rate of last month is more than 1/12th of the total annual revenue, as they are growing rapidly.

So let's estimate their run rate of last month at $75K and it becomes realistic - albeit a bit tight - to have 10 people on the payroll.

500K/month would mean 50,000 paying users and I'm pretty sure they don't have that. How can they hire 10 people? The same way other cash-strapped startups can - by giving equity instead of big salary.