An Israeli start-up is embarking on what could be one of the most important tech projects to ever hit the developing world, it believes. Beginning next month, hundreds of kids and adults in Mathare, located in Nairobi, Kenya – one of the world’s worst slums – will be joining the world’s “digital elite,” with computing devices that will allow them to use the latest software, access the Internet, and develop the skills needed for success in tomorrow’s world.

And it will only cost seven dollars a head, said Philipp Pfeffer, Brand Manager for Keepod, the “social enterprise” company behind the Unite for Mathare Project.

“Seventy percent of the world’s population doesn’t have access to a computer of any kind,” said Pfeffer. “Keepod has developed a way to bridge that digital divide, in Africa and all over the world – not by buying everyone a laptop, but by supplying them with an operating system, software, and storage on USB ‘disk on key’ flash drives.”

Keepod has developed a Linux-based operating system that can act as a portable hard drive by plugging it into the USB port of any recent PC (going back about 8 years, said Pfeffer). “For the first time, we are separating the ‘brains’ of the computer from the hardware, allowing users to take their ‘computers’ with them on a small, cheap device that will enable them to keep their data safe, secure, and accessible,” he said.

While there have been other operating systems distributed on USB flash drives, they are all supposed to be used temporarily, eventually installed on a hard drive. Keepod’s version of Linux is the only one specifically designed to work on these drives.

Phillip Pfeffer (Photo copy: Courtesy)

Phillip Pfeffer (Photo copy: Courtesy)

To get the flash drives into the hands of its target market – the billions around the world who don’t have access to computers — Keepod will work with local non-profits and NGOs. In Mathare, it’s working with a group called LiveInSlums, which will distribute the USB sticks and train program participants in how to use them (Keepod will provide training to NGO reps, who will then take what they have learned and train others to teach the end-users of the disk). In essence, Keepod will be a hardware wholesaler, selling the devices to NGOs, who will be responsible for their distribution.

Keepod (the term means “hedgehog” in Hebrew, chosen because it was a fun, easy name to remember, said Pfeffer) has similar goals to the One Laptop Per Child (OLPC) project, which aims to distribute low-cost laptops not only to kids, but to adults. “They were hoping to develop laptops they could distribute for not more than $100 apiece, and they have gotten the prices on the latest models down to about $120,” said Pfeffer. “That’s a fantastic accomplishment, but for people making $5 a month, as many of the poorest do, it’s still an insurmountable sum.” So far, the OLPC foundation has distributed about 3 million of the devices, but it’s unlikely to be able to sustain its production and distribution model at $120 a machine – unlike Keepod, which is producing and distributing devices for a lot less.

Besides, giving Keepods out to poor kids is a lot safer than giving them laptops. There is a major theft problem in areas where OLPC devices have been distributed – despite the fact they include anti-theft systems — with armed gangs wresting the laptops from owners and then reselling them.

That won’t happen with Keepods, said Pfeffer. The USB sticks can be easily hidden, and thus won’t make people who have them into targets for thieves. To ensure even greater security, he said, Keepod’s come with an encryption system to prevent use by thieves. But Pfeffer doesn’t expect that to happen too often. “Unlike a laptop, it’s just not worth a thief’s time to steal USB flash drives.”

In order to use a Keepod, a user has to plug it into a PC. As it turns out, Africa is a favorite destination for old, used computers that offices in New York, London, and Tokyo no longer need. “Companies buy new PCs every year or two, and many of them donate or sell their used PCs to various social service organizations,” and many of those end up in Africa, where they are simply dumped, said Pfeffer.

The reason for that dumping: Using these old computers isn’t so simple, because they are usually shipped without the hard drive, for security reasons – and anyone in Africa who can afford a hard drive can afford to buy a new computer. “With Keepods, all these computers can be put to good use, because we don’t need a hard drive to operate the PC,” said Pfeffer.

And it’s not just Africa, either. “There are poor people everywhere, even in Israel, Europe, and the US, who are getting left behind because they don’t have the opportunity to learn the skills they need to get ahead,” said Pfeffer. “The digital divide is a global issue, and Keepods can help bridge it not only in Africa, but anywhere.”

If there’s any question about the viability of Keepod, it’s in the company’s business model. Although it sounds like Keepod should be a non-profit company, it isn’t; it’s a business that expects to earn a profit. “It’s true that at $7 a pop, the margins are very low,” Pfeffer said. “But we don’t expect to get rich off this. That amount is enough to sustain the company. We are not looking for an exit, but a legacy.”

The company’s founders, Nissan Bahar and Frank Imbesi of Milan, believe that there has to be an opportunity for participants to make money in order to promote the project. According to Ted London, a scholar and teacher on Base of the Pyramid (BoP) issues at the University of Michigan, Keepod’s corporate structure and distribution method is as much a start-up experiment as the Keepod OS on a flash drive system itself.

Response to the project has been very positive. In order to get Keepod going, Bahar and Imbesi raised funds on crowdfunding site IndieGogo, beating their goal by a nice margin, with donors sending money from all over the world. “At this point we really are a start-up,” said Pfeffer. “Whatever money we make from the Mathare Project will be plowed back into the company. Our objective is to be self-supporting, and not to have to resort to crowdfunding again. It’s a new paradigm not only in computing, but in business as well.”