It's never just one thing or the other but understanding your domain is a necessity and years of experience counts for a lot. Also, the first guy out often ends up with arrows in his back, something I learned from the first couple of startups I worked for.
Absolutely. There is a lot of glamour with first mover advantage, but in today's world where iteration is what differentiates the survivor, the first mover has a hefty price to pay. That's another thought.