# Why Your Prototype Might Be Closer to Theranos-Level Fraud

> Scrappy products risk deception when they misrepresent current capabilities.
- Title: Why Your Prototype Might Be Closer to Theranos-Level Fraud
- Summary: Scrappy products risk deception when they misrepresent current capabilities. Founders must distinguish between minimal viable products and fraud by ensuring…
- Keywords: theranos, prototype, fraud, minimal viable product, investor deception, customer deception, founder ethics, product development, Inc
- Source: Inc — https://inc.com/soren-kaplan/why-your-prototype-might-be-closer-to-theranos-level-fraud-than-you-think/91433384
- Read time: 1 min
- Topics: theranos, prototype, fraud, minimal viable product, investor deception, customer deception, founder ethics, product development
## What makes a prototype deceptive?
Scrappy products use manual work and simulated features to gauge interest before release.

> The ethical line comes down to what customers and investors believe is working today.
## Theranos case study
Elizabeth Holmes claimed Theranos could perform full lab tests with one blood drop but only did a small number of tests.

> According to the SEC, the company’s device could complete only a small number of tests, while most patient samples were processed using modified machines made by other companies.
## MVP versus fraud
An MVP can be ready for sale and represent future capabilities through upgrades, but it cannot misrepresent current capabilities.
## Zappos test example
Zappos photographed shoes in stores and listed them online, then shipped physical products after orders.
## Why this matters now
Founders must ensure current product capabilities match what customers and investors believe to avoid deception.
## Key takeaway

Founders must distinguish between minimal viable products and fraud by ensuring current features match what customers see.