Answer: When you are a pre-revenue company like Twitter.

Twitter is much maligned for not having a forseable way of generating revenue. It’s easy to mistake this for a lack of effort or accumen on the part of the team. In fact, I would argue that the apparent lack of a business model and lack of emphasis on revenues is not a short-coming but a strategic effort on the part of twitter’s investors and founders. The reason being, it is a hell of a lot easier to justify an inflated valuation for a startup based on the amount of capital invested and not on revenues.