In the beginning, there was Burbn. Sound familiar? Probably not; but it was Instagram's co-founders Kevin Systrom and Mike Krieger's first app, which let users check in at venues and share photos taken there. In typical startup-then-pivot-fashion, Instagram rose from Burbn's ruins.

But what led Systrom and Krieger to move on from the complex, location-based Burbn to the selfie-instigator Facebook-acquired for $1 billion in 2012? Hard work, timing, opportunity, and plain dumb luck, apparently.

In the latest episode of NPR's How I Built This, with Guy Raz, Systrom and Krieger share their journey from an itty-bitty startup to a billion-dollar company. Here are five lessons for entrepreneurs:

1. Identify your market.

By 2010, location-based search company Foursquare was on the rise, and cellphones had begun to embrace higher-quality cameras. Systrom saw an opportunity to make use of them and bank big on the location-based app industry. In comes Burbn, which he co-founded with his Stanford classmate Krieger. The service let users check-in to places, earn points in a gamified system, and most important, take and share photos of the actual meet-ups.

Early data analysis revealed users were actually using the photo capabilities more than any other feature, so Systrom and Krieger decided to pivot and change the focus of their app to a photo-sharing service.

Systrom quotes Eric Ries, author of The Lean Startup, to explain this decision: "Don't ask why people don't use your startup. Ask why the people who continue to use your startup, keep using it."

2. Listen to your clients.

Instagram filters were born after then-girlfriend (now wife) Nicole Systrom (nee, Schuetz) told the entrepreneur she might not be using the revamped app. "My photos aren't good," Systrom recalls her saying. "They're not as good as your friend Greg," she added.

"Well, Greg," Systrom replied, "uses a bunch of filter apps to make them look nice."

Then a light bulb went on and Systrom started working on the first Instagram filter, while Krieger kept up with the construction of the app itself.

3. Embrace failure, learn, and move on.

"The best thing for an entrepreneur is failure," says Systrom. When Burbn reached a stagnant point at a 100 users, Systrom and Krieger made the hard choice of scrapping it completely and starting over. The gambit paid off.

4. Accept when you're wrong.

After Facebook acquired Instagram, there was an overhaul in the app's terms and services agreement. The updated version contained a controversial provision stating that user content could be used for advertisement purposes without the user's consent and without retribution. Users started deleting their accounts in outrage.

"We have a graph of account deletions at that time and it was skyrocketing," shares Systrom. He decided the best way to deal with the controversy was to face it head on, apologize and admit the mistake, on a lengthy post published in the company's blog. "Actually, the graph of deletions at that moment drops to zero," says the entrepreneur.

"Sometimes you just have to say sorry, you just have to say you were wrong," he adds.

5. Recognize when your luck is changing.

"The world runs on luck," Systrom says, emphasizing the real challenge is what you do with it.

The billionaire believes everyone gets lucky at some point in his or her life. "The question is," he contends, "are you alert enough to know you're becoming lucky?"

There were other photo-sharing apps when Instagram first started, but it was Systrom and Krieger's handling of their luck and resources that ultimately drove them to success.

Published on: Sep 22, 2016