Fred Wilson: Apple is evil and Facebook is just a photo-sharing site

July 21, 2010 | Kim-Mai Cutler

Twitter and Foursquare investor Fred Wilson shrugged off Facebook’s open graph, the social network’s strategy for mapping the web via people’s relationships and tastes, and called Apple evil for its increasing control over devices and the mobile ecosystem.

“Facebook is a photo-sharing site, really. Maybe with some chat attached to it,” Wilson said at the Geo-Loco conference in San Francisco today. “I don’t think the open graph is important. Everybody’s got a social graph. Every large-scale web app has a social graph. I don’t think Facebook’s social graph is anything to be scared of.”

That said, Wilson did call the social network, which just crossed 500 million users today, a “juggernaut” in a word association game he played on-stage with Federated Media chief executive John Battelle.

[Update: Fred commented below this story (you can read his full thoughts there). He says he was trying to be fun and controversial on-stage. "I do believe, at least in some way, in everything I said. But please understand that I was consciously trying to be on the edge."]

Wilson said that neither Google nor Twitter would probably ever rely on Facebook to power or socialize its web apps, both for strategic reasons and because the two companies already effectively have their own social graphs.

He decried Yahoo for increasingly relying on Facebook, which now can show visitors status updates from their friends on its homepage.

“It’s a shame,” he said. “It’s capitulation.”

The company he said he worries most about at night as an investor is Apple.

“I think they believe they know what’s best for you and me, and I think that’s evil,” he said.

While Google’s Android operating system is on track to power anywhere from two to four times as many devices compared to Apple’s iOS, Wilson said developers weren’t yet migrating en masse to create apps for Android-based phones.

Wilson said Google was “challenged.”

“It’s been a long time since they have released anything that has been truly transformative for the web,” he said. “The last thing may have been Gmail. They should buy somebody. YouTube was a great move. They weren’t getting video done and then they bought YouTube.”

“They should buy Facebook,” he said to laughter in the audience. But as an investor in Twitter, he wouldn’t comment on whether the search giant should buy the company.

He also talked about the rapidly changing venture capital industry. Wilson’s firm, Union Square Ventures, has carved out a niche for itself by doing early-stage investments in New York’s blossoming tech scene. He said other legacy firms may struggle as they come to terms with smaller fund sizes.

“A lot of great practitioners of the venture business in the 1980s and 1990s are retiring. Venture firms are really about the people who are in them. It’s not that common that firms can survive the succession from generation to generation. So the new firms that are coming up that will be different from the top tier firms of the 1980s and 1990s.

The industry is much more capital efficient now so you have to be able to write a $1 million check now so you can be there to compete in the first round. I don’t think that’s true in life sciences and cleantech. Fund sizes [for consumer Internet startups] will need to get smaller.

The venture business is pecking order driven. It’s a lot like music. If you’re one of the top venture firms, you’ll see the best deals,” he said “There was a fairly static list of top-tier venture firms for 20 years and that’s what’s changing now. It’s causing a lot of hand-wringing.

Wilson, whose firm was an early investor in Foursquare, said the firm wouldn’t have made much of a return if its co-founder Dennis Crowley had decided to sell the company to a buyer like Yahoo. He said at that time, Union Square had only invested a half-million in the company.

“In terms of my own financial interest, [selling] would not have been the outcome I would have wanted,” he said. “Dennis didn’t really care about what was right for his own pocketbook. He cared about what was right for the service.”

“When you talk about entrepreneurs and their companies, it’s their baby. They want their baby to be the best it could ever be.” For Foursquare to become a company with a user base on the order of 100 million people, Wilson said, the company just needed time.

Wilson also talked about Twitter’s stability problems following a rough month for the company with significant downtime during the World Cup. Twitter oAuth tokens were down earlier this week, crippling startups who rely on the platform to power their log-ins.

“Twitter was built kind of as a hack, and they didn’t really architect it to scale,” Wilson said. “Then it started to scale, and they’ve never been able to catch up.”

But he added that now that the company has raised more than $100 million in the last year, it has the resources to attack its infrastructure problems. The company has more than 100 engineers now and recently hired away Michael Abbott, Palm’s head of software and services, to be its vice president of engineering.

Finally, Wilson gave his thoughts on a number of companies in the mobile space. He said prospects for Research in Motion, maker of Blackberry phones, weren’t good. He said it was “tough being the second fiddle” for Gowalla, another location-based social network that is a rival to Foursquare. He said the HP-Palm deal was a “great acquisition” for the company.

Next Story: Flipboard CEO: New 'social magazine' de-uglifies the Web
Previous Story: Gazelle lands $12M to buy and resell your used electronics

Twitter

Facebook

Google Buzz

Digg

StumbleUpon

Delicious

Google

More...

About the Author, Kim-Mai Cutler

Kim-Mai covered social networking for VentureBeat until July 2010. To reach VentureBeat's current writers, email tips@venturebeat.com.

http://avc.com fredwilson

When John and I talked about the on stage interview last night, we agreed to have fun and that I would try to be controversial. You have take some of the things I said in that light. Especially the word association game we played. I do believe, at least in some way, in everything I said. But please understand that I was consciously trying to be on the edge. It was a fun interview to do and I think the audience enjoyed it. Did you?
http://avc.com fredwilson

I would also like to say that I talked a fair bit about how strong twitter's engineering team is now and how good their engineering leadership is and why I am confident they are getting ahead of the scaling issues
http://www.venturebeat.com Kim-Mai Cutler

Oh thanks for your comments. I hope it seems self-evident that it's kind of playful. If it doesn't, I'll put your comments here up higher.
http://twitter.com/LEADSExplorer LEADSExplorer

If Facebook is a photo-sharing site, then Twitter is a playground for spamming bots as there seem to be more bots on Twitter micro-blogging than humans.This indicates the future of Twitter is short term.
http://www.venturebeat.com Kim-Mai Cutler

Made a note up near the top of story about what you said in the comments.
http://pulse.yahoo.com/_D477HLDLY7UFBDWTMWU7IXQZ2Y ute loseru

I'm glad that Fred Wilson piped in. Otherwise with the tittle of this column I would seriously have thought that he needs medication. I too think that Apple is “evil” but because of the arrogance they have and some day their product cycle will peak and shave off billions in quarterly revenue. As far as Facebook being a photo sharing site I completely disagree. I have both a Facebook account as well as Twitter; and of the 400 “friends” I have on Facebook that are active I would say that 5% to 10% have Twitter accounts and of that number maybe 20% to 25% “tweet” more than once every two weeks. For Twitter to thrive (and last more than two more years) they need to figure out how to gain real estate share on my computer screen as well as hundreds of millions of others like Facebook has accomplished.
artigriff

What an uninsightful and self-serving speech… Bad-mouthing comnpanies he failed to invest in and shamelessly promoting the ones in his portfolio is quite distasteful. Perhaps the only comment I agree with is the one on Google…was Fred perhaps suggesting that Google should buy Twitter and save it from the agony of figuring out a revenue model?
http://avc.com fredwilson

it wasn't a speech. i did that earlier in the day. all of these comments that you are reading about were made in an interview i did with john battelle.
http://avc.com fredwilson

as i said, i was trying to be controversial. but the only thing i use facebook for is to look at my friends and families photos
nedned

Fred was provocative, and the comments about Facebook were amusing (and true in a sense; though the Twitter remarks were spot on, as is his follow-up response regarding the team). At the end of the day, these comments raise valid concerns about particular issues- issues that are generally difficult to articulate succinctly. On a side note, “LEADSExplorer” should change his/her display name to more effectively conceal he purpose of his/her trolls.
http://twitter.com/dpgj dpgj

Evil or not depends on which side you are standing but luckily I am a devil so feel perfectly comfortable.
http://fernando-gutierrez.com Fernando Gutierrez

I don't think he's badmouthing, he is just giving his oppinions (quite common to many people, by the way) on very notorious companies. And we don't know if he ever tried to invest in Facebook (in Apple is would have been impossible because of his age).
http://twitter.com/baba12 Baba

Mr.Wilson, I don't think you should have to try and defend your statements one bit, it is like you somehow feel guilty about what ya stated.Man you may have stated everything honestly and not held back, more of that is needed & so try and be pure Id, have no filters and express truly if that means you are on “edge” so be it at least you take up very little space when you are on the edge.Google may very well buy Facebook & it will not be a good merger except for some investors and the M&A folks.
adrianoesch

if you follow a bot its your own fault. i see twitter much more as a link-sharing system, it is for me i get many good informations out of that system
http://www.seospidy.com SEO India

I Dont Agreed with this Facebook and Twitter is best knowledge base very useful resource.
http://twitter.com/jvwright Jeff Wright

What you call evil, I call courageous. Apple is transforming the computing/digital industry with every new product. If they're so wrong about it, then why is every one of their competitors following along like lost puppies within months. They're doing what they think people will want, trying (for the most part) to find the right reason, not just scooping out whatever people *say* they want, pandering to a market, as Microsoft did with Kin.
ANDNEXT

its transforming the industry for the worst. you guys talk about apple like Apple its a high tech company and the gadgets they make are top of the line.PEOPLE DO NOT KNOW BETTER REASON WHY APPLE ITS RULING THE WORLD. PEOPLE DO NOT KNOW ANY BETTER.WHERE WAS APPLE BEFORE ADOBE: NOWHERE. WHERE WAS APPLE BEFORE UNIX: NOWHEREWHERE WAS APPLE WITH OUT THE HELP OF MICROSOFT: NOWHERE.WHERE WAS APPLE WITH OUT THE HELP OF GOOGLE.:NOWHERE.AND NOW STEVE GOT A BIG PIECE OF THE PIE AND HE THINK HE IS THE MAN BURNING BRIDGES.STEVE ITS ACTING LIKE HE NEVER HAD ANYTHING BEFORE. BUT KARMA WILL GET HIM. INSTEAD OF COMING BACK A NEW HUMBLE MAN WITH A NEW LIVER , HE IS ACTUALLY WORST. HE IS BETTER OFF DEAD.
http://twitter.com/rurikbradbury Rurik Bradbury

Removed (double-post)
http://twitter.com/rurikbradbury Rurik Bradbury

You have to stop skipping your anti-psychotic meds.
http://www.24pagebooks.com MartinEdic

Ha, Fred, talk about linkbait! You just surfaced all the whack jobs, even those who write with Caps Lock on.I can't call a company obsessed with maintaining a very high level of quality 'evil'. And criticizing Facebook because all you use it for is to look at photos merely betrays your ignorance of how average, non-techie people use it- to socialize. You get your socialization via your blog with its large number of loyal readers and commenters (including me) so FB is not relevant to you. However, the people who pay attention to this discussion are not average FB users…As for Twitter, I think its relevance is highly overstated and I have yet to see a revenue model that justifies its valuation. It may be another YouTube, taking years to develop any kind of cashflow.
http://sonic.net Peter

Fred spoke honestly and openly, a breath of fresh air amongst all the fanboyism of Apple, Facebook and Google.
http://twitter.com/changds David Chang

It wasn't self-serving at all (and not a speech). Overall, I thought it was a good session, and I think the majority of the audience also enjoyed the lighter tone of the Fred-John interview.
http://bwasearch.blogspot.com Donna Brewington White

Sure what Fred said during the word association in the Battelle interview was entertaining (and certainly insightful whether or not you agree with the opinions), but it's what he said in response to the last question from the audience that has set him apart and has been a consistent message. He is helping to put a new face on VC.
http://avc.com fredwilson

I think its fine. Did you find the interview entertaining?