I think your article is quite good and mostly spot on. But I think the title is misleading. I’d disagree and say that iteration is, in fact, design… but design is not just iteration.
The biggest surprise in the article was the idea of “products designing themselves through iteration”. I had never heard of this before and it sounds ridiculous! So if that’s the idea you’re battling here, I get it — good products don’t design themselves. (and if anyone believes that, they’re crazy)
Though I don’t believe in the designer-as-mystical-creator model either. Designers aren’t magic, specially-gifted people. It takes a lot of experimentation to arrive at a great design — a lot of iteration. Not just a creative spark that magically arrives from nowhere.
But you’re right, you need a great hypothesis first, that addresses a real problem in the marketplace, to arrive at a well-designed product that will succeed. Not to mention a lot of luck and timing. There is a long history of well-designed products that came into being at the wrong time and did not succeed. So even a great idea with great design isn’t always bound for success.
In the end, design is hard — it’s a lengthy process. It takes equal parts creativity, research, iteration, testing, and refinement. And the discipline to stick with this process and not get frustrated. Take out any of those and your result will suffer.