http://motherboard.vice.com/read/how-reddit-got-huge-tons-of...
Now that they have solved the chicken-and-the-egg problem, they're legit.
Point being, lot's of startups over-promise (and exaggerate) in the beginning. It takes time fix bugs and find things. If you waited for a perfect product and were 110% honest you would likely not get any traction.
That's not to say that this guy shouldn't be penalized for lying about where he sourced his products though!