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You're creating a false dichotomy: we can either add new features, or stabilize the current version, but we can't do both!

Yes you can. You can spend some time to stabilize, and then add new features on top, then stabilize again if needed.

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I am not saying that's a dichotomy, I mean this purely as a function of resources. Sure you can do both but that takes up twice as much time as if you only did one of them. So however much you want to do of either is really up to the project's management goals and what the customer is willing to pay for...

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