-$5K to $10K goes much further in many other countries than it does in the valley and most entrepreneurs there don't have the option of moving to the valley because of visa restrictions. Potential investors there should consider this. This is one advantage some locations have over the valley.
Speaking from personal experience, the challenge for doing this in developing nations is that the hard part is being connected enough to a market to know if something can be built in three months that people will pay for. If you're in a developing nation intending to sell to America, you're probably not as close to your users as you need to be because products tend to change rapidly in the early stages of a startup and you need to be interacting directly with potential users and learning from them.
But the money does go 10 times as far, so the idea could have potential. $25K can roll a startup for a year or more on the cheap in Bangalore.
Serving local customers is key, but even if you're Reddit, I think that ideally you are immersed in a community of people doing similar things. You need that feedback and energy.
reminds me of microloans. It's a growing trend in Africa. I believe there are websites that connect you to farmers in Africa and you actually make good ROI.
The difference is that I am talking about funding in amounts larger than what microloan sites like Kiva allow (Kiva's top loan amount is ~2K) but more importantly, provide mentoring like YC does. Therefore, it has to be done by experienced entrepreneurs who guide these new entrepreneurs closely.
-$5K to $10K goes much further in many other countries than it does in the valley and most entrepreneurs there don't have the option of moving to the valley because of visa restrictions. Potential investors there should consider this. This is one advantage some locations have over the valley.