You're correct, we did seed the community with people I knew in startups that I thought would (1) be interested in this type of community and (2) have interesting discoveries/thoughts on tech products.
I won't pretend there aren't voting rings but they're not limited to the "valley in group" at all. We see people across the world trying to game the site, as people do on Hacker News, reddit, and other crowd-curation sites. As I mentioned earlier on this HN thread, we have systems that help combat these rings and in part thank to YC/HN's guidance, we'll improve this.
I also want to point out just a few examples of products that reached the top of the day's board from non-valley, "famous" startup people. E.g.
- Notifyr (http://www.producthunt.com/posts/notifyr) was made by a 17 year old in the Netherlands. It's the 5th most upvoted product right now
- Instanerd (http://www.producthunt.com/posts/instanerd) was made by Alex in Skopje, Macedonia as a small side project. It received over 160 upvotes and ~5x the number of comments than the average submission.
- Pie (http://www.producthunt.com/posts/pie) is a team collaboration app by startup in Sigapore. It too hit the top of the board.
Of course, not everyone will agree with what's most upvoted and an upvote really is just a measure of interest, not a review.