how I can communicate to him that there is a better way of doing the startup without sounding arrogant?
Background: you have experience, he doesn't. You wanted to talk and help, he wanted to do it by himself and wasn't willing to listen. Basically, IMO, we could summarize the story like that. What then? If I start with the following, it's because I think these are reminders that you should see as big red flags and keep them in mind IF you decide to go any further and talk with him again.
You may have already done more harm than good. Hell is paved with good intentions. You wanted to help, but your friend didn't understand it that way. Why? Because, for decades, I've learnt that people, very very often, don't like to be proved wrong. And when you tell/show them something they could/should do differently, they can see it as the "know-it-all-and-of-course-better-than-me-advisor". Even if you don't mean it...
Plus: a very important point is that people who start a business pursue a dream and you can't take it away from them or break it. That'll make them mad or any other negative feeling towards them and/or you.
They want to think that the road ahead is a wonderful highway, easy to drive by, go straight ahead, but, sometimes, blindfolded, so that they can't see that the road is indeed a narrow, dark and full of small/large/tricky and dangerous potholes path. That's what dreams are sometimes made of...
What you have tried: list of possible problems and their outcome = discarded.
What you have as arguments for the pros and cons: your experience + your feelings about what he may be doing wrong + your desire to help him.
He's rejected eveything, as you mention it. What are the options left?
do nothing more, and let him do his way. If he fails, he'll learn from it, and if he succeeds, great! :)
try something slighly different. I'll expand on that point, because it seems like the one you want.
As the direct approach failed, you can still try to talk about your problems. The ones you faced when you launched your business. Because, as a (now) business owner, I faced many many problems. Some of them I knew about (but didn't understand or read the signs that others, more experienced, like you, had given), some I discovered. But it has to [ look / be ] like a small talk, and absolutely not like a "trying to help you" or "you should really think this way" type of advice. Offer your own experience, don't challenge him. The latter sounds bad and is often seen a "lowering", while the former is just neutral, and not judgemental.
Before I launch my business, I was filled with hope (51%, or you wouldn't start...) and fears (200%, or you would fail for sure, IMO, if you are too confident, and less careful).
I listened to profesionnals (business owners, bankers, CPA...), but not always understood what they meant. You sometimes have to face it to fully realize the danger. I was craving for any advice. Not everyone is the same. Some believe they can do everything by themselves, and some just fear they'll never be able to make it (like me, at the beginning) and succeed.
If your friends stands in Cat. #1, let it be like that, and everything more than what you already tried may just annoy them more and more. Is it worth a friendship? Be there just in case he's asking for advice, but don't try to step in on your own initiative. That would be my advice N°1. He who pays the piper calls the tune.
If you think he can still hear and listen to some advice (Cat. #2), do it like my second point. Keep in mind that "I used to care about what people thought of me until I tried to pay my bills with their opinions." :)
I often talk with people who run a business or want to start one. They (we) all have the hopes; and some, the fears. If you want to help your friend, talk about yours, and he'll pick what he thinks is important to him. You don't sound arrogant when talking about your problems, and what you tried to solve them, but rather when you talk about how great you've been dealing with them and just focus on that (sounds selfish too), or that won't work because of X/Y/Z (sounds like know-it-all).