The iterative design process is a simple concept. Once, through user research, you have identified a user need and have generated ideas to meet that need, you develop a prototype. Then you test the prototype to see whether it meets the need in the best possible way. Then you take what you learned from testing and amend the design. Following that, you create a new prototype and begin the process all over again until you are satisfied that you’ve reached the best possible product for release to the market.
This iterative process is often called “rapid prototyping” or “spiral prototyping”.