According to legend, Ernest Hemingway once made a $10 bet with several writers that he could write a whole story in six words. He wrote “For sale. Baby shoes. Never worn.” on a napkin, passed it around, and collected his winnings.
If you have time, please take a look at the above article.
It is the best explanation of Hemingway’s Iceberg theory that I’ve read yet.
The Theory is this: By leaving out details and backstory which you, the writer, know but don’t fully put on paper, the power of those unwritten details or background facts find its way into the aura and impact of the story. It is a bit like an actor who plays a cab driver and the actor makes up a whole family and biography and school history for this character, just for himself to find his center and motivation and anger or sadness.