You don't. You can give your input with the known challenges, but you don't tell him to stop doing the idea. People learn by failing and your best friend's idea may never work, but what he learns from that and what spawns from that might work.

I remember specifically when a company pitched their idea that it would never work, and 3 years later the business is doing really well.

The only way you can really tell your best friend to stop, is if you have direct experience in what he is trying to build and have succeeded.

Your friend will learn the hard way and that's the best learning that there is.