Say for example, your company needs about 1 million users before you can start charging any type of meaningful advertising dollars. Additionally, there's this virality affect that gets those 1 million users to get their friends on your product, so things will start to take off quickly, and then viola! You have a moat.

Only rub is, until you hit 1 million, you're making essentially $0. And that'll take lots of time, people, and servers that all need to be paid for.

Welcome to the social network.