"This team is a bit raw and naive and that comes from a lack of education and experience," Nelsen said. "We played Japan and South Korea and the set-ups, facilities, networks and support systems they have in place for players from about 14 and 15 means they produce quality players. We just don't have that. If we did, we would be on a level playing field. If we did, we would be even better.
"That's really hard because the football federations in New Zealand are more of a hindrance than a help. It's like running the 100m dash and starting 20m behind everyone else. We have to teach them what needs to be done and what it takes to win at this level. Winning at this level is incredibly hard.
"Realistically, we should get beaten in these three games [at the Olympics]. That's the real world. We should be getting smashed in all three games but the great thing about New Zealand players is we generally like being the underdogs. It sits well with us. We like to go against adversity. We try to turn things on its head. The World Cup was a prime example. These young guys can achieve against all the odds."
New Zealand will open their Olympic campaign against Belarus in Coventry on July 27 (NZT) before tackling Egypt at Old Trafford (July 30) and Brazil at St James' Park (August 2).
They need to finish in the top two of their group to achieve their goal of progressing to the quarter-finals and are targeting at least a win and a draw in their opening two matches.
They will go into it having experienced a dose of reality. They somehow escaped with a 1-1 draw against the Japan under-23 side after being totally dominated in the match and also came under considerable pressure in a 2-1 defeat to South Korea three days later.
The Olywhites round out their preparations against United Arab Emirates in Austria on Friday morning (NZT) to end a brutal travel schedule that will have seen them fly from Auckland to Tokyo, Seoul, London, Munich and London again.
"It's about survival," Nelsen said of the game against UAE. "For some reason we have been scheduled to play this game. We will travel 12-14 hours for one game and we don't want anyone to get injured."
Nelsen is the biggest concern and coach Neil Emblen has said he will play his first-choice side for the first half only before making numerous changes. Goalkeeper Jake Gleeson is making good progress from a groin injury but won't be risked; Tommy Smith, Adam McGeorge (both hamstring) and Tim Myers (virus) are in line to play.