I was listening to a podcast about software design and they were quoting Steve Jobs. So this is third or fourth hand and probably garbled from the original.
Stage One is where you are new to a domain and it seems simple and you design a simple solution. But the simplicity is really a lack of understanding so your design, while simple, is not very good.
Stage Two is where you see the complexity of a domain and you end up with a complex design. It might handle lots of things but the complexity makes it hard to learn and use.
Stage Three is where you figure out how to make a simple design that still addresses the complexity of the domain. This is the elegant solution. It doesn't have every conceivable feature, but it handles the important stuff for a majority of users. For example, the iPod. Lots of other music players have more features, but the iPod hits that sweet spot balancing simplicity and features. (100 million buyers testify to that)
Back when my company was doing custom software development for a wide variety of domains, a lot of our products were Stage One. A few progressed to Stage Two. Even now that we're focused on one domain, our product is still definitely Stage Two. Suneido, our development tool has some Stage Three aspects but doesn't really qualify overall.
Stage Three is hard. And there doesn't seem to be any formula for achieving it.