The Top 5 Side Projects That Became Billion Dollar Tech Companies and What You Can Learn From Them

Success is typically a combination of talent, hard work and luck. Luck often doesn’t just mean a chance occurrence like winning the lottery but instead having a mindset that creates, recognizes and seizes opportunities for success.

The ability to turn lemons into lemonade is a defining characteristic of successful people who seek how to turn even the biggest misfortune to their advantage. Today we’ll discuss a number of household names that grew to success exactly because their founders seized opportunities and snatched victory from the jaws of defeat.


Many know Instagram as the mobile photo app with 400 million monthly active users which was acquired for $1 billion by Facebook less than 2 years after it launched. However Instagram was not the original project its founders, Kevin Systrom and Mike Krieger developed.

Kevin Systrom’s original app was named Burbn and was intended to combine elements of Foursquare and Mafia Wars by allowing users to check-in to locations, make future plans with acquaintances, earn points for hanging out with friends, and post pictures.

As detailed in the Atlantic article Instagram was first called ‘Burbn’ after looking at how customers reacted to Burbn they decided to rewrite it from scratch with a new focus

Lesson #1: The customer is always right. Mike & Kevin’s initial hypothesis was that users wanted a “better FourSquare” but once it became clear their users didn’t find that as interesting as photo sharing they decided to focus on that instead. It is very easy as an entrepreneur or product manager to get attached to an idea even after users tell you it isn’t very good and then tell you what they want instead. I’ve watched many products crash and burn because they had very good reasons at the time for ignoring their users.


Slack is one of the fastest growing enterprise apps of all time and went from launch to being valued at over $2.8 billion less than two years after it exited beta.

Slack daily active users

7 million people used for Slack daily and there were about half a million paying users the last time they shared their sales metrics in 2015. Slack’s success is reminiscent of a phoenix rising from the ashes.

The Pando Daily article, Third life: Flickr co-founder pulls unlikely success from gaming failure. Again details the challenging circumstances that led to the birth of Slack

Lesson #2: Internal users can be just as good as external customers in validating that an idea is great. The Glitch team worked on, tested and continuously improved an internal communication tool that eventually worked so well that when they released it they were overwhelmed by how much their users loved it. If a product team doesn’t care about the product they are building enough to love using it then how can their customers? Although seemingly obvious, it is amazing how often teams build and deliver products that they themselves believe are clunky and unusable but decide that this is acceptable because building a great experience is too hard or costly and that their users wouldn’t care. One thing that we’ve learned over the past decade is that there is always room for a well designed experience to completely dominate a market when it shows up.


At the start of the decade, Groupon won the achievement of becoming the fastest growing company of all time by making $500 million in revenue within the second year of its existence. Groupon then went on to have the largest IPO since Google’s which ended up valuing the company at over $13 billion.

Before there was Groupon, there was The Point. A website dedicated to organizing people around a cause. So how did this evolve into the group buying website and app that we all know today? This history is detailed in Business Insider’s INSIDE GROUPON: The Truth About The World’s Most Controversial Company which states

Lesson #3: Timing is important. A good idea launched at the wrong time is indistinguishable from a bad idea. One of the things that made group buying attractive was that it launched during the Great Recession when consumers would be more amenable to saving money via discounting and business owners were looking for ways to get lots of people in their stores & restaurants.

A few years ago Wired wrote an article titled Turns Out the Dot-Com Bust’s Worst Flops Were Actually Fantastic Ideas where they pointed out that many of the ideas behind failed web companies in the 1990s such as online grocery delivery (Webvan) or same day delivery (Kozmo) are now being competitive markets with lots of players like Instacart, PostMates and Amazon Fresh.


There are few media platforms that can claim to be as influential as Twitter has been in recent years. With over 300 million monthly active users and being on track to make about $3 billion per year, Twitter is a success story. But it is a success story born from failure like the other products in this post.

Business Insider has a great piece on the founding of Twitter titled How Twitter Was Founded

Lesson #4: Fail Fast. A common trap for product teams is to work on a failed idea way past its “sell by” date. Once the it became clear to the Odeo team that they couldn’t build a more compelling podcasting experience than the one built natively into the iPhone platform they gave investors back their money and decided to focus on Twitter instead. We all only have a limited time on this planet. Don’t waste it keeping a bad idea alive.

On a side note, it is interesting to back look at the decade old post by Mark Arrington on TechCrunch wondering what Odeo’s shareholders think of the company wasting time on side projects like Twttr.


Last but not least is Pinterest. The company is currently valued at $11 billion and had 78.5 million unique users from the US according to Comscore. The story of Pinterest is very similar to others we’ve just read and is detailed in the Fast Company article The Pinterest Pivot which is excerpted below

There are lots of similarities with the elements of our previous lessons in this story. There is the notion of failing fast once it was clear that the timing wasn’t right to provide a mobile shopping experience given mobile payments weren’t seamless at the time. Most importantly there’s the element of listening to customers by watching what features resonated the most in the original app and then focusing on those in the new app similar to the Burbn ➡Instagram transition.

Lesson #5: Treat every failure as an opportunity. The overall lesson from all of these companies is that it is possible to snatch victory from even the most terrible defeat in business if you seize opportunities as you encounter them instead of giving up. Remember, according to research luck is mostly just another name for creating and taking advantage of opportunities.

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"Everything you touch you change. Everything you change, changes you" - Octavia Butler, Parable of the Sower

"Everything you touch you change. Everything you change, changes you" - Octavia Butler, Parable of the Sower