I can't imagine that building a foundation on these kind of lies towards your clients is going to be sustainable in the long run?
Now if they were billing based on number of people working for a client, and they were charging for phantom people, that would be fraud.
This guy just has an optimized workflow that he presents as if it were a team of people. If the customer feels that's unreasonable, they wouldn't pay. There's nothing unethical about that.
That's some pretty fancy doublespeak right there.
No. I'm sorry, but this is flat out lying. You can rationalize it all you like, but if you are lying and inventing people that don't exist, it's fraud.
This isn't even lying by omission, but actively working to deceive.
Sure, the customer may be getting full value for their money, but then why is the lying necessary?
First statement in https://en.wikipedia.org/wiki/Fraud :
"In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right."
And later, a clarification:
"the requisite elements of fraud as a tort generally are the intentional misrepresentation or concealment of an important fact upon which the victim is meant to rely, and in fact does rely, to the harm of the victim."
By your definitions, most businesses would be committing "fraud". Many, many, many companies have multiple emails, multiple phone numbers, even multiple mailing boxes that may all be handled by one person but which serve to filter and separate incoming contacts and certainly also present a level of professionalism that some customers find comforting.
And what about companies that have the same service but present it differently (to look niche or specific) to different audiences via different websites? Are they being fraudulent by making their potential customers feel uniquely served?
There are so many more examples I could bring up related to marketing, presentation, etc.
Frankly, barring some accident, I'm betting the solo company is more motivated to keep things running than the larger company that might sell out to a larger rival and allow their service to be shut down or changed negatively (with little or no warning to customers).
Your last point isn't valid by the way, customer don't know whether it's reasonable or not, because they don't know. They are buying something else then what they are told they are buying, which is unethical by my standards.