Is this not a deliberate and material misrepresentation of your company? If this were a financial contract being sold, wouldn't this be fraudulent?
A comment from PG about him I will never ever forget even though I had never heard of Altman before goes like this: "You can leave Sam Altman on an island full of cannibals and when you come back a year later, he is the king of the cannibals."
This is one of the most awesome character traits to ever have. You WILL be successful by being like this, it's just a matter of time.
The canonical question is "Honey, does this dress make my ass look fat?" The honest answer may be "yes." But that answer could be hurtful and result in a seriously pissed off girlfriend/wife for a while.
The easy answer is "no." Dishonest, but no hurt feelings. A better response is often to deflect the question entirely and say, "I think you look much better in that purple dress you used to like."
That's what Sam did here: he deflected the question before it even arose.
"We were trying to get a big client for weeks, and they said no and went with a competitor. The competitor already had a terms sheet from the company were we trying to sign up. It was real serious.
We were devastated, but we decided to fly down and sit in their lobby until they would meet with us. So they finally let us talk to them after most of the day.
We then had a few more meetings, and the company wanted to come visit our offices so they could make sure we were a 'real' company. At that time, we were only 5 guys. So we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were. It worked, and we got the contract."
I think the reason why PG respects Sam so much is he is charismatic, resourceful, and just overall seems like a genuine person.