Quality should be there overall, but especially on those things that really matter. This may be features for an app like facebook, or performance in a highly responsive game. My point is blindly following performance is not achieving quality. Quality is in the eyes of the user and has different meanings depending on what the user perceives and is doing. We could say the web experience using browsers has extremely bad quality characteristics from an engineering point of view, yet it changed the world. So maybe Steve wasnt so spot on :)

On Instagram, have you read about its starting and also Pinterest. Instagram had a product about Bourbin or something that was not a widely used app, but did attach to a niche of presumably drinkers. What made Instagram is that they somehow recognized that people on the Bourbin site were really into the pics taken of their hobby. Instagrams next app was a buggy system apparently! However, I recall reading it was that they recognized the uptick by recognizing the users wanted to post pics (with the filter stuff). So here, there was no real quality, just a feature not exposed well in the social market. Pinterest also seemed to recognize that wedding dresses and women gained them traction. In my judgement its this recognition of opportunity and gaps in the social market combined with what you say, the right time and place. Right time and place can also mean partially that there is a need in the market for something thats not well done.