Another intersting answer i found on Quora.
What kind of problems do startups in developing countries typically face?
1. Developing world doesn’t have the legal infrastructure in place for Venture capital to work well. If a startup founder gets $1m in funding from a VC in Pakistan or India and decides to run away, how easy will it be to catch him & get the justice done?
2. Success breeds success. Even in the US, many cities outside silicon valley tried & failed to replicate the valley’s success. There is a definite element of success piling on success (network effects). It is very hard to bootstrap this process. Think of those Paypal mafia and the growing Facebook mafia.
3. Developing world governments act against businesses through failed policies and/or sheer incompetence. In India, it takes more than 2 months to incorporate a company. In the valley, incorporation is measured in hours.
4. Hiring is a big problem, as quality labor is scarce, is taken off by big overseas companies and what is remaining is thinly spread around in a large geography.
5. Tech infrastructure is a problem. Can you get a 20-50 Mbps connection at an affordable rate? How about 24/7 electricity, water, etc?