Startups aren't about "fake it til you make it". At its core a startup (and its founders and investors) are typically making a contrarian bet that must be right. Theranos bet that it could use a small amount of blood could be used to the same effect of much larger blood draws. It has turned out that this was not right at this point in time. If its technology worked we would not be reading this news story.

Of course while every company wants to paint itself in the best light it is probably best not to engage in outright deception. If discovered that can be fatal.