What the hell is he talking about? VCs routinely fund companies that don't have a business model or any near-term path to making "buckets of money". Twitter being a great example.
He was specifically calling out Dave Hornik for his bit about not investing in iPhone apps because it's too small a market. There's too much VC investment in junk they think will be the next big thing rather than things that might be smaller hits, but actual hits. It's the difference between a $1 scratch-off paying $5 vs. buying $30 of Powerball tix in hopes you hit the jackpot.
What Hornik says seems 100% obvious. iPhone is still a tiny percentage of the market. That said, they're disproportionately likely to use the web and apps I would think.
But still, you have all of the negatives you do with Facebook Apps (capricious overlords in total control of your fate) but with something like 5% of the user base. And while iPhone users are clearly more engaged with that platform than, say, Win Mo users, they're nowhere close to Facebook users.
iPhone has the App Store, through iTunes, and is already demonstrating that people will pay money to install those apps on their phones. Facebook apps plan to make money how exactly?
Yeah, I'm not sure what the hell he's talking about either. The fact that specific funds exist for both iPhone and Facebook applications kind of obliterates his point.
