Both I and a close friend are involved in separate startups. I'll cut to the chase. I am essentially a geek, and don't like "beating about the bush", or unnecessary "hyperbole" or "hype". I know my stuff and when I get the impression that someone is "buls***ing" or trying to pull the wool over my eyes, I take it as a personal affront to my intelligence. As a matter of fact, one of my startups is based on exposing the widespread fraud and ripoff in a particular industry - which "scratches my itch" very nicely.
Back to this post. My friend (lets call him Sam for now), is a "people person" - he is prone to bouts of irrational exuberance, and quite frequently "over gilds" the lily when talking about his products/service. Sam is an amateur/hobbyist programmer - yet wrote his "application" himself - which is (almost always), a bad idea. I took a look at his codebase and was completely staggered - apart from the shockingly poor quality, he also does not employ any of the typical software development practices such as version control etc. He applies "patches" in an ad-hoc fashion when one of his clients reports a problem - and often cannot recall the last patch he applied - and has absolutely no idea what "side effects" his patches introduce to the core codebase. To say his code is "half a*sed would be very complimentary.
I have almost come to blows with him when I suggested he adopted a better style of programming which would provide a basic architectural framework, which would in turn make his code more robust/scalable and easier to maintain. So I thought "screw this. I'll keep my comments to my self".
Now, he is embarking on a marketing spree, and is using buzzwords to describe his product/service - and I know full well that that is not the case. As a sales person (or at least a person with salesman like abilities, he has realized that people respond to certain buzzwords, and so he now includes those buzzwords, as a "matter of course" in his marketing material).
Well, whats that to do with me I hear you ask ... Well, he is constantly asking me act as a reference for his product, or to add a comment/testimonial (with my name) so he can show to his clients. Also wants to link up with me on linked-In - but I cannot possibly be associated with the crap that he is selling.
I mean Sam is a nice guy and I value his friendship (outside of work) - and he knows so many cool people etc, etc. BUT I don't want to be associated with a substandard product - I have my own business/online reputation to manage. I am not sure how to break this to him without offending him (if left to my own devices - thats exactly what would happen). Can anyone suggest how I may somehow let him know that I do not want to be associated with his business - without sounding churlish/offensive?
If you are one that doesn't like "beating around the bush", then this is a situation in which you need to be diplomatic and direct. Explain to him your concerns about his product and why you don't want to be associated with it. Give examples of ways he should improve it if he wants your endorsement. If you truly have the friendship you describe, then Sam should be open to your comments. However, your style of delivery will be key to the outcome.
If you say you won't support him, be prepared to walk away from your friendship too though.
For "Sam", this could easily be the most important thing in his life. And for you to say that you won't support him on this would piss him off. People are not rational. We just think we are.
You could give him an endorsement on something that you believe in - e.g. if you hate his code but love his idea, your endorsement might focus on the idea (the positive). Also, you may say that he's a great friend. You're not lying and you're supporting your friend. He may not want your input on coding style, so what?
I would simply tell him that because he would not implement your advice on product development, that you don't feel that he took your input seriously. As a result, you don't feel that you can give a good testimonial on the product/business.
Edit: I would put it this way because it seems like a very personal situation, where relations are strained anyway. The real issue seems to be that he's not open to taking constructive criticism at all. It's a bit beyond the product IMO, if he is volatile and unprofessional, would you want to be associated with him in general? I think that the points others have made will work well also.