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...