If they don't grasp that they are a pretty fair weather friend to begin with so don't loose sleep and get your business moving.
Once the business started to fail, we started to fight between each other. We lost our friendship and the business. If I could go back in time, I would have had this chat with him.
On the other side, I talked to a friend of mine who is running a successful business in Toronto. He started his business when I was his room mate in university. I was very bitter that he didn't include me as his business partner. His answers were that I didn't bring value to his business. I am glad he did that, because we are still friends and he is willing to help me with whatever business I start in the future.
He has more ideas he wants to pursue and I'm unwilling, due to his role in the first.
But because I have an ongoing partnership in the b&m business, it's hard to be fully forthcoming about not wanting to work with him.
My situation is different in that I'm not going ahead with the idea without him. Mostly I've just put off working with him again and he hasn't been too persistent about getting started on anything.
Even still, if I were faced with the conversation of "why don't you want me to be a part of this?," I would tell him exactly why. He wasn't a good co-founder in the past, I don't expect he will be this time either, and I'm not prepared to risk another business on him.
I would tell your "good friend" that you don't enjoy working with him, even though you like him, and that you won't be including him.
It's always going to be awkward if you're talking about how great your startup is going and he got left out.
Keep business separate from your friendships.
Businesses are a lot easier to find than a good group of friends.
Most startups fail, friendships can easily be forever. Don't mix them if you think it's going to be trouble from the start.
Good luck with your startup and keeping your circle of friends together.
I don't work with friends, and I don't make friends at work. I keep those two areas of my life completely separate.
The benefits are: you can make whatever business-decisions are prudent without worrying about upsetting a friendship, and you can make whatever friendship decisions you want without worrying about how it effects your business.
I have a similar mantra for business & family, never mixing the two.