Definition:
A false negative is a project terminated on the assumption that it will fail and then ultimately proves successful. It is harder to track false negatives because after a project is terminated, it is only occasionally reincarnated to prove its ultimate worth. A typical false-negative scenario is one in which the project is terminated, with regard to the expenditure of resources, but is licensed elsewhere, and the licensee ultimately succeeds. When good judgments are made under conditions of incomplete and imperfect knowledge, both these types of error must occur. Logically, any attempt to eliminate one error type results in a greater number of instances of the other type.
Visionaries are especially afraid of a false negative, that customers will reject a flawed MVP that is too small or too limited.
Further Reading:
BOOK: The Lean Startup – Eric Ries