Imagine you seat a child in front of a machine with a number of levers, buttons, and dials, and you tell him (assume he's a little boy) that pressing some buttons or pulling some levers in a particular order will win him a bunch of money or candies (whatever is more motivating to children these days).
Of course, he'll start experimenting. Pulling this lever, twisting that dial. Eventually, perhaps by sheer luck, he'll do something right, something that gets him, suppose, $1. Now he has a choice: he knows a particular action or sequence of actions that can get him $1, so he can keep doing that, OR he can keep experimenting like he was before, hoping that he'll discover some sequence that gets him $2 or more.
This is the dilemma of exploring versus exploiting, although the analogy above is somewhat contrived. I first came across a formal definition of this during a lecture on Reinforcement Learning, where the problem at hand was how a rational agent must decide, when placed in an unknown environment, whether to explore and learn how to earn greater rewards, or simply settle for what it already knows and just keep exploiting that to earn limited rewards.
This is one of those cases where "once you see it, you can't unsee it." That is, once you see this written out or formally defined, a lot of other decisions that we make, from mundane ones like which route to take, to more consequential ones like career choices, start to fall into this category of dilemmas.
Often, you find yourself at a fork:
(1) explore - throw caution to the wind and just mess around, explore, try suboptimal paths, HOPING that you discover a new path that is better than the best path you already know
(2) exploit - play it safe, stick with what you know, and just cash in on the most rewarding path according to your current knowledge
In most situations, and as is the case for most "important" life decisions, there is no "right" answer, and there are tradeoffs for each choice. For example, if you want to explore, you better be sure you're not pressed for time or resources, and that you can afford to "mess around." If you choose to exploit (and especially if you choose to exploit too early) you risk settling for a significantly sub-optimal path that may not be the best use of your resources.
So why did I write all of this out, if I didn't have a strategy to make the "right" choice? Simply because I think there's incredible value in just knowing that this dilemma is a thing, and knowing that most decisions can be boiled down to a choice between exploring and exploiting. It's a simple framework to allow you to more clearly think about your choices, and hopefully in doing so, make better decisions for yourself.
P.S. It's also neat because if your parents ask you why you're still unemployed and living in their basement, you can just tell them that you're choosing to explore your career choices and that you don't want to exploit your knowledge too early and end up in a dead-end job.