This is a decision-making / prioritization practice for selection of ideas (feature ideas, performance ideas, growth ideas). It is a 2 by 2 matrix comparing Impact vs Effort. A variation of the matrix may consider Effort+Costs or Complexity as representation of both effort and costs.
The source of ideas and hypothesis are practices like Event Storming, Impact Mapping, HMW, User Research, Empathy Mapping. While we perform those aforementioned practices, often ideas would emerge for possible improvements or new hypothesis may form. Some of them may be already formulated as HMW questions.
Before adding any of them as items on the Product Backlog these ideas & hypothesis would typically need some research, analysis and further elaboration. As any team has a limit of bandwidth and attention, prioritisation is required and any activities would be added as items in the Product Backlog.
Once prioritised these ideas & hypothesis may lead to:
Check out these great links which can help you dive a little deeper into running the Impact & Effort Prioritization (Matrix) practice with your team, customers or stakeholders.