[dagw]

The first mover advantage is an illusion.

I wouldn't go that far. All the cases you cite are of products that definitely classify as substantially better than what they replaced.

Before Gmail took over the market from Hotmail there had been several other companies that failed due to only being slightly better.

Yes you can beat the "first mover", but doing so is hard and requires an almost revolutionizing better product.

[Retric]

I am not saying it’s easy to beat them, rather first movers also generally die or move on. Atari, Electronic Controls Company, Mosaic, etc simply aren’t around any more. Sure Yahoo isn’t dead, but it’s also moved on from it’s initial success.

[dagw]

first movers also generally die or move on.

Sure, but before that they generally make a lot more money than the second and third mover. When all is said and done, Atari and Yahoo did much better than Colecovision and Lycos.

The risk with being the first mover is that, having easily seen off competition from the second and third mover, you become complacent and stop moving.

[Retric]

Many arguably most first movers simply flopped, look at social networks or MMO’s for example. The bias of only remembering successful first movers is exactly the illusion I am talking about. Generally if a slightly different business model works it’s a first mover if it fails it’s a bad idea.