On a couple of occasions this week I have been reminded of the power of iteration in business. While we all aim to be perfect the first time around, it is a pipe dream. Great products and services are born out of trial and error. Only with iteration will a company get the feedback it needs to inch closer and closer to a product that best meets customer needs. And part of that process of iteration is trying stuff out early and often — broken stuff will get fixed (and, occasionally, fixed stuff will get broken) and in the process solid products will emerge.

Take for example the Treo 600. Two years ago, attendees of the TED conference were given the opportunity to buy the first generation Treo at a big discount. I, like a substantial portion of the TED crowd, am a gadget freak and very happily signed up to get the first generation Treo. The only problem is it sucked. No offense Handspring, but the first Treo was a mediocre PDA and a terrible phone. It was a big fat flip phone that did many things but did nothing particularly well (ok, the address book and dialing integration was pretty cool but that was about it).

I’m back at the TED conference this week and have yet again been given the opportunity to get the latest Treo — the Treo 600. As a warmup to receiving the Treo 600, Peter Skillman, the lead product designer, gave a brief talk on the evolution of the Treo. He discussed what his team had learned from the initial Treo design (first and foremost, people want a phone that looks and feels like a phone). And he showed a bunch of drawings and models of proposed Treo 600 designs that ultimately lead to the device that is being sold today. Of the design process, Skillman summed up his philosophy this way, “it’s about failing — big time.” While many of the prototypes and drawings were indeed failures, the resulting device seems to me the best smart phone available to date. By using an iterative process, Handspring has been able to create a much better product than it would have otherwise produced.

Similarly, I have always viewed as one of the key strengths of building a web business, the ability to rapidly evolve a product or service based upon specific, quantifiable user feedback. Successful web businesses have never sought to put out the perfect product. Rather, they have put out products that can be measured and tracked, and have been quick to revise those products based upon the direct feedback they receive. The more agile a company is in responding to that user feedback, the more likely it will ultimately build a product or service that best meets the needs of its customers.

As I sit at TED pondering the interaction of technology/science and design, my conviction about the value of the iterative design process seems self evident to me. Great product development is an evolutionary process. Just as sophisticated organisms like mantis shrimp or bonobo monkeys were not born over night, nor were sophisticated devices like the Treo 600. Only through trial and error can a company build great products and services that truly meet the needs of their customers.