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The CEO of a startup that I work with has, unfortunately, grand ideas about software that we can build. It is in a field that I am interested in, so it excites me, but at the same time I am realistic - there are a dozen other companies that specialize in this software, and they have vastly more resources than we do (I would be the only software developer, and I work about 30 hours per month with this company). Let me be clear here: the software we're talking about has been in development by multi-national corporations for decades, incorporating bleeding-edge research and millions of users' data. We don't have employees, decades, nor experience enough to understand academic research in order to build and improve the system.

How can I gently tell my boss/partner “dude, I really wish we could make this, but it’s literally impossible given our resources”?

PS - I am on very good/informal terms with the CEO, so letting him down easy in a conversational way would be most logical here. However, I'm looking for a more diplomatic way to break this news to the CEO, especially considering how a manager/project lead would want to learn about the inevitable failure and potential damage to the company should such a project be persued.

EDIT: this is clearly not a duplicate of the one proposed. Simply reading the question and answers shows that...

Don't tell him you can't - tell him you can.

Then give him a realistic project plan, showing how long and how many people are needed - plus costs.

Let him decide.

How can I gently tell my boss/partner “dude, I really wish we could make this, but it’s literally impossible given our resources”?

You could do this on a one-on-one meeting or talk, but even though you are on good terms (and could even try that phrase you used) I suggest you phrase it more assertively, something like this:

Hello Joe, I've been giving some thought lately to the project we discussed. I really like the idea, and am exited about all this. However, I fear that with the current resources we have it will take much more time to complete. Would you mind if we go over this again to dismiss those worries?

It is likely that your CEO may debate after telling him this, so it would be best if you bring him your estimated schedule for the project to back up your claims.

This will also serve you as an exercise to actually lay down in paper and grasp the real extent of the project you have in hands, giving you a more solid assessment of the feasibility of the project. Who knows, perhaps it will seem more doable after you do that.

My recommendation is follow your gut.

Clearly you want to keep your future friendship and working relationship with the CEO, however you do work for him so I would strive to be as professional as possible and produce a great but short report.

Map the project in terms of man hours and put it into three growth phases over three years of development. In each phase increase the team size appropriately and thus the man hours including any related costs like workspace / equipment / servers / backups / security / electricity / etc as required. By close of phase three your project will be costly. It will require significant investment in terms of time, management and cash-flow on the CEO's part.

Then invite him out for lunch or dinner and casually and succinctly present your findings. Put the ball squarely in his court. This is what it will take to bring to market.

You may be surprised by your finished report. I would be open in your thinking to the idea of it being a great success. Either way, after you present the report it will end things well or spur on the CEO to actually getting it done.

Lastly don't forget, doing this thorough but short report is exiting, this could be a wonderful stepping stone and opportunity for your future growth. Best of Luck. T

If it was me, I would ask him about what competitive advantages he hopes to achieve. This does two things, first it might clarify in his mind the he cannot beat the big guys. Secondly, it clarifies what he expects you to do. If he does clarify that, or tells you just go ahead and do the framework of the system, the I would do so to the best of my ability.

He is the CEO and you are the developer. You probably get paid the same if the project succeeds or fails. Do what you are asked to do to the best of your ability.

Either your CEO is unaware of the existing products and how much effort it would take to duplicate them, or else he knows about them but thinks your company can come up with something cheaper and better. If you choose to have this conversation, DO NOT start with "your idea won't work because..."

Instead, briefly describe the existing entrants and then try to get an idea whether your CEO has a slick idea for competing, or if he just wasn't aware that these products already existed. Come to that meeting having already done your homework about the features and competitive advantages of the existing products, and when they came onto the market.

If your CEO wants to make a product because he thinks it's missing from the marketplace, you may give him the information he needs to decide how to enter the market (perhaps by using an existing product from another company and adding value to it). If he has an approach in mind that you don't know about, then at worst, you've shown interest and savvy.

Ages ago, my employer wanted me to write some project-management software and when I saw their specs, I realized they really just needed to buy Microsoft Project and learn how to use it. Stupidly, I told them that and went back to what I had been doing. If I had offered my services as a trainer or project liaison, I would have made a much better impression, and probably more money. It was a stupid move, a missed opportunity. Lesson: figure out what the people with the money want to do, and why, then help them accomplish their goal. DO NOT tell them their goals are wrong.

Don't you dare have this conversation, ever!

It's your CEO's money, blood, sweat and tears invested into this business. You don't have much to lose other than a steady paycheck if things go bad.

Unless he asked you point blank for an opinion about the viability of his entire business plan, I would never offer your opinions, because your opinions here are going to show him your lack of faith in the business. If you convince yourself you can't do it, you'll succeed every time, and I personally wouldn't want someone working for me that didn't believe in the success of the core of the business.