A steel thread is a very thin slice of functionality that threads through a software system. They are called a “thread” because they weave through the various parts of the software system and implement an important use case. They are called “steel” because the thread becomes a solid foundation for later improvements.

With a Steel Thread approach, you build the thinnest possible version that crosses the boundaries of the system and covers an important use case.

He explains this in detail in the full post, with lots of helpful examples.