New York--The sun and wind aren’t the only natural sources of energy. Human beings are being used to power up devices in developing nations. 

Potenco, the Alameda, Calif.-based start-up, is developing a pull-cord generator that can power lights, cell phones and even laptops by using the energy expended to pull the cord. The generator is targeted at developing nations where energy isn’t that easy to come by, but can also be used in the Western world during activities like camping.

“There are 2 billion people around the world that have no access to electricity,’’ said Colin Bulthaup, chief executive of Potenco. “One out of every three people has never switched on a light in their life.”

The pull-cord generator fits in the palm of your hand, and with your other hand you pull the cord, which generates the energy. A minute of pulling will give you 20 minutes of talk time on a cell phone, one hour of ultra-bright LED-based flashlight use and three hours of play time on an iPod shuffle.  The extra calories needed for a full day’s worth of light or cell phone use is 20 to 50 calories, said Bulthaup.  In developing countries where starvation is rife, expending too much energy could be detrimental. 

There are other products on the market that generate energy via human output, but Bulthaup said hand-cranked products have a smaller crank arm, which means your movement isn’t that broad, and thus gives off less energy per crank. With the pull-cord generator, you make large movements when pulling, which enables you to give off more energy with less output, said Bulthaup.

Potenco is a spin off of Squid Labs, a venture-technology company formed more than three years ago by four Massachusetts Institute of Technology graduates. Squid Labs has spun off five companies, with Bulthaup in charge of Potenco. One of the goals of Squid Labs was to identify the “lowest-hanging fruit that would have the largest global impact,’’ said Bulthaup, noting that the key fundamental need is the lack of power in developing countries.

While the emerging markets may not seem like the best place for a start up to launch a product, Bulthaup, said there is money to be made in some of the world’s poorest nations thanks in part to microfinancing. Microfinancing is the practice of giving very small loans to people in impoverished nations.

“Microfinance institutions are more prevalent, which creates capital that’s then available for purchase of items,’’ said Bulthaup. “A lot of the regions markets are very liquid…the trick is try to make the product cheap enough.”

While hand-cranked or pull-cord power generators may be a bit gimmicky in the developed world, there is a real need in emerging markets.

“In third-world countries, generators are used several times a day, not just once a month,’’ said Richard Doherty, research director at technology market research firm Envisioneering. “Brazil, Russia, India and China will see hundreds of millions of generators in the next few years.”

Still, in some developing countries, crime and graft is rampant, especially with commercial products, which could prevent the pull-cord generators from making it to the intended parties, said the analyst.

Either way, Doherty said launching a green product in emerging markets goes a long way in terms of raising venture capital or angel funding in the U.S. As for its viability in the U.S., Doherty said given Americans increasingly consider themselves green or “green leaning” the idea of expending a few minutes to charge a cell phone or iPod provides people with a lot of satisfaction.
  
Potenco will start manufacturing its pull-cord generator in the second quarter of 2008 for developing nations and is aiming to sell it in the U.S. by the summer. Bulthaup noted the price has yet to be determined but that it will be very affordable in the developing countries and more expensive in the U.S.