If these are people you genuinely care about, it is worth the time investment to educate them why the idea isn't practical or useful. Keep in mind that they often do not have nearly the same insight into what it takes to really build a product or a business.

For a lot of other people (where you dont want to invest the time debating/educating them), you can offer to let them retain equity and work on it at contract rates. If you have the spare time and use for the cash, you can give them a slight discount (vs. market) and everyone wins.