Estonia's Overhyped Silicon Valley

"It may need a new name," Erik Anderson says with a straight face. One of the stars in the new batch of companies taken in by Startup Wise Guys accelerator, where Anderson handles business development, is a company called Pubify. It's incorporated in Hungary, and when I ask its co-founders if they're worried the name might be misunderstood, they look nonplussed. "Publify was taken, so ... " one of them, Kinga Jentetics, explains. (Pubify, like Publify, is in the e-book business.)

We're sitting in the accelerator's cozy, bean-bag-filled workspace in the old town of Tallinn, the capital of Estonia. The city hosts one of the hottest startup scenes in the world. "Few factors get us as excited as Estonian founders," Silicon Valley venture capital guru Marc Andreessen tweeted recently after his company led a $58 million funding round for TransferWise, the international money transfer company started by two Estonians. People here like quoting a 2012 Wall Street Journal piece that said Estonia was "producing more startups per capita than any country in Europe."