I was recently asked, how do I know if I am just failing and wont give up or if we are iterating ? I smiled and asked if their board was happy. The truth is, iteration can often times feel like failure (and it is usually failure in some capacity that brings on the iteration). The more drastic of a direction the iteration is taking your company, the more it feels like failure.
How much iterating should one do? Until you are happy with what you are doing! Shoot, there are lots of success stories out there of products lingering in the market for years until finally they “caught a break.” *cough* Apple *cough*. They have had some failures, but through the lessons learned, they have created some great products. In reality, you can sub in almost any other organization name into that cough, Google, Intel, Microsoft, Walmart.
Google is now on its third attempt at social networking, Intel has dumped processor architectures MANY times, Microsoft is still iterating its mobile approach and Walmart now has 6 unique store fronts to meet market needs. All great companies iterate, the goal is to ensure the cost isnt greater than the reward.