Cathedrals are intricately designed places of worship that have become too sacred to change. Building them required serious planning and thousands of man-hours. Compare that to bazaars, which were public forums that constantly changed – new merchants came and left, new products arrived and disappeared.
This distinction was applied to different forms of open-source development in The Cathedral and the Bazaar back in 1999. It was a response to the rapid adoption of Linux and the Linux development style. Open, rapid iteration with a solid engineering foundation.
I think the same metaphor can be applied to startups today. Beyond open-source development, some startups are run more as Cathedrals: pristine, extensively planned, built from scratch. But Cathedrals are difficult (if not impossible) to change quickly.
The Linux development model (the "bazaar") can still be helpful today, even for closed sourced or for-profit companies. Release early; release often. Reuse as much code as possible (Linux was a derivative of Minix). Build a development pipeline that can be used to iterate quickly – Linus invented git for version controlling Linux, and email lists were the most effective for collaboration over the Internet (hopefully no longer accurate). And an adage from The Cathedral and the Bazaar itself – "The next best thing to having good ideas is recognizing good ideas from your users. Sometimes the latter is better."