I know of one case. Two founders, one American, one Indian (my brother), both highly technical. They were almost running out of money but also needed 5-6 programmers and someone to manage them, so they could take care of the business aspects. They took investment from angel investors, and my brother opened up shop in his home town in India, which is a small city. IMO the key to their success was that they were able to find this one guy who bootstrapped the entire business in India and managed it very well. Also, since this was a small city, they were able to find stable employees at reasonable salaries, unlike cities like Bangalore, Mumbai etc. which are very expensive and people keep switching jobs for salaries. Eventually the startup got acquired by an American Corporation and the operation in India is still going quite well.
That is certainly true. But I would like to emphasize the importance of having a solid manager over in the India operation. Because even if you are Indian, it becomes difficult to manage from a long distance.
I agree, i know of an entrepreneur who wanted to build a wildfire like app and hired some indian developers, but the project kept getting delayed and some stupid technical decisions were made.
For his next project he went through references and also through drupal forums to find the developers. He then met with them personally and was in constant touch(it helped he was in india a lot) till the launch of the project.
