I was asked to make a clone of this: http://www.bragster.com/ ok, not a clone per se, but a site with similar functionality on a lower budget! How low might one ask? Under 10K, probably under 5K.
My question: how do i explain to a non-tech savvy friend, that this is not possible, in the nicest terms, and convince them not to go to rentacoder.com and try to pay someone to not do it for them.
Has something like this ever happened to you, and how did you deal with it?
Find a site that looks like it cost $5,000 and send your friend a link to it.
Everyone knows a good website takes six to eight weeks to develop.
Come up with several metaphors that point out how out of place you think the request is, and use them repeatedly until the point is made. Brute force attacks for the win!
check Clipshare, http://www.clip-share.com/ you need to "setup" an ffmpeg or another engine to encode videos, flix or another you want in the server, but its pretty easy to setup in general and cheap also.
Extending Kyle's answer a bit - maybe try an analogy for their business.
For example, if they're involved in construction, ask them whether it would be possible to create a 1km bridge spanning a river for $500k (no idea what the actual cost would be).
The difficulty with IT is obviously that it's an intangible thing. Make an analogy that's tangible.
In general, it is not advisable to do rough estimations because the result will be wrong. You would be under estimating because of a lot of things.
In this case (and just because you are certain the task is impossible given the cost requirement) you could do a rough estimation where you divide the project in specific tasks and maybe milestones with time and resources required for each. Give this estimation to your friend and tell him that is a first-approach/very-rough-estimate/very-risky-because-of-lack-of-a-formal-analysis.
Other posts here in SO may provide some guidance to you: http://stackoverflow.com/questions/tagged/estimation
I was an a similar situation. A friend pitched me a business idea for a social networking site. I asked her, "sounds fun, but how exactly is this going to be competitive with all the sites that have well-established userbases?"
Granted, I wasn't expecting a good answer to that question, so maybe it wasn't incredibly nice. Still, she thought about it, and twigged that the idea wasn't going to make any money, and that she had underestimated the difficulty of the undertaking. I didn't have to tell her so in any condescending, didactic sort of way, so I didn't feel like too much of a jerk about it.
Shall I forward all the horror stories I get from people who used services like rentacoder? Yikes.
We all know that if they go that route, it's roughly equivalent to throwing the $5000 in the shredder. Maybe you can suggest they find a partner to start the business with who can do the coding. If they get someone jazzed about it, and offer them equity, a) they're not out the $5000 and b) they have at least a chance of getting code that doesn't suck.
Here in the bay area, at least, there are any number of hackathons and meetups where developers looking for projects go. If the idea is good, and the person promoting it is sufficiently enthusiastic and personable, someone will be interested.
people never want to hear "that's impossible" especially entrepeneurial types, it just makes them more dogged. so just show them what -is- possible for their 10k and let them come to their own conclusion.
So, while drawing on other sites for inspiration is fine, "recreate X" is not a scope, it generally means the client hasn't thought it through. For a start, you don't know which parts of that site are really standing out to the client.
So sit down with them and plan it properly, get them to lay out what they want from the ground up, without resorting to "however bragster/youtube/ebay do it".
Just bullet point it, really quick and dirty. you'll then have an idea of the true scope.
then you can throw some numbers next to each one, and watch them add up to over 10k. this will illustrate your point, and help your friend/client far better than "Trust me don't bother it's impossible"
you can also use ClipCenter as your youtube clone software.. Heard they have the latest and newest youtube-like-website software.