If that was my opinion, I'd tell them right away. Time is short during YC. But since changing course is hard, if they don't agree with me, I don't insist too hard at first.
On the other hand, sometimes it happens instantaneously. There was one group that decided to change their idea during the last tuesday dinner. I was sitting across from them and we did a back of the envelope calculation about what their revenues might be in the ideal case, and we sort of looked at one another and said "maybe time to try something new." They found the new idea 2 days ago, and it's quite good.
On the other hand, sometimes it happens instantaneously. There was one group that decided to change their idea during the last tuesday dinner. I was sitting across from them and we did a back of the envelope calculation about what their revenues might be in the ideal case, and we sort of looked at one another and said "maybe time to try something new." They found the new idea 2 days ago, and it's quite good.