Barney (1991) argues that resources, if they pass the VRIO test lead to sustained competitive advantage. The question arises if sustained competitive advantage is even important for startups? The environment for startups changes so fast that it might be very difficult to achieve "sustained" competitive advantage, so that competitive advantage might be enough.
Yes, VRIO model to startups is a good analysis and fundamental which each entrepreneurship should apply in strands of its business.
Because this model enables to know about your environment, your competition, and yourself (business).
Is VRIO model that crystallizes the mind of entrepreneurs What? How? and For Whom? is born this business.
Sure, it is. But as you noticed, given the dynamic character of the startup environment, they need to build new capacities and capabilities, rearranging resources and trying to extend their competitive advantage. That is the point in the development of Teece's dynamic capabilities. I would encourage you to read (if you still didn't) the recently published paper "Dynamic Capabilities and Organizational Agility Risk, Uncertainty, and Strategy in the Innovation Economy" by Teece, Peteraf and Leih, in the California Management Review, 58(4), 2016. It may give you some insights for your future works with startups environment.
I would say 'yes'. The VRIO model can be used to map the competitive position of the new firm in the industry. Of course, it will be very costly for startup firm to be at par with established companies, but this is not the purpose of VRIO analysis. The purpose is what factors of resources a new firm has that it should focus on in order to survive or compete in the industry. The analysis should be based on value, rarity, inimitability and organized resources (VRIO) as compared to the existing competitors.
The logic of VRIO is sound for startups, but in the particular way that the new entrant has to have some valuable resource that is rare, so that they can successfully create value for buyers and, hence, capture that value in the form of earnings above production costs. That is, the most inimitable resources (e.g. IP, specialized market access) are likely to be rare and valuable and provide some sustained advantage over the growth phase. But, if the new entrant is not organized to capture/appropriate the value, then the entrant doesn't have a sustainable strategy.
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