In the area I live, houses are often built one complete room at a time, over many years. They start out as a single-room shack, then the owner builds extensions as they have children or money. Often, they build a porch, and then decades later wall up the porch and turn it into a room of some kind.

I kind of like this analogy because it does help us reason about the situation. The one-room shack is basically an MVP; a hacky result that just does one thing and probably poorly, but it is useful enough to justify its own existence. The giant mansion built from detailed architectural plans seems like a waterfall process for an enterprise application, doesn't it?

There are many advantages to building a house one room at a time. You get something to house you quickly and cheaply. When you build each extension, you have a very good idea of how it will be most useful because you know your needs well. You are more capable of taking advantage of sales (my neighbor collects construction overstock for free/cheap and starts building something once he has enough quantity to do so). It's more "agile". The resulting houses are beautiful in their own bespoke ways. They last a long time, too.

The downsides are that the services and structure are a hodgepodge of eras and necessity. If you're competent, you can avoid problems in your own work, but you may have to build on shoddy "legacy" work. You spend more of your time in a state of construction, and it may be infeasible to undertake a whole-house project like running ethernet to every room.

It's all tradeoffs. I think it does in many cases make sense to build a house in this way, and it likewise makes sense to build software this way. It depends on the situation.