The guys at Contrast have an interesting examination of a point made during Peter Merholz’s product strategy workshop at UX London:
During his workshop, Peter made a point about planning software iterations using cakes as a metaphor. The above drawing shows two ways to plan out baking a cake. You can deliver the base first, then the filling, and finally the icing. At the end of the last phase you have a consumable cake. Alternatively you can make a cupcake, then step up to a normal cake, and eventually a wedding cake. The difference here is that people enjoy cupcakes.
Iterate rapidly, deliver quickly, build up to something even better.