Kent presents product development as a three-phased approach (eXplore, eXpand, eXtract). This really closely models the product life cycle (from HBR).
Kent's insight is that you should act differently depending on the phase you are in.
In the Explore phase (stage #1 above) you can't predict the future. You've no idea how long finding market fit is going to take. It's a high risk activity. The main driver of success is the rate at which you can run experiments and learn quickly. At this stage software quality is irrelevant - the half-life of the code is short. You want a cross-functional, loosely co-ordinated team to deliver this phase.
The next stage is Expand - this is rapid growth, equivalent to the B round of venture capital. You have validated the market, you know what to do and how to do it. Time to scale, develop features and get it in the hands of users and build those feedback cycles.
Finally, you are at Extract. This is where economies of scale shine. Work here is predictable - adding a feature will result in a known about of revenue. You can estimate things well because you've done it plenty of times before. Quality is really important - cutting corners now will cost you because you'll be stuck with it for ever.
Organizations can get tuned to a particular way of thinking and that can constrain. For example, it's easiest to get tuned into the last phase Extract (see Innovator's Dilemma)
Beck states that this is one of the things XP got wrong- there is no one-size fits all methodology. The 3X model says it's all about where you are on the s-curve.