Prototype: In the Health Law, an Open Door for Entrepreneurs

The hopeful include founders of start-ups who otherwise wouldn’t have access to affordable health insurance — people like Rajeev Jeyakumar, a co-founder of Skillbridge, a Manhattan-based online job marketplace for business consultants.

Mr. Jeyakumar is uninsured. But unlike many people who were thwarted by the government’s faulty health care website, he was able to sign up for individual coverage three weeks ago. He will pay just $74 a month, after tax credits, for his new plan through the New York State exchange.

His story illustrates how, when finances are tight, new entrepreneurs often place the health of their businesses over their own health. “In the early days, a venture is often very much self-funded,” Mr. Jeyakumar says. “You always trade off between the money you need to survive in terms of paying rent and food. And when you have health care as an additional cost, it’s always very tempting to not put money into it.”

But come January, Mr. Jeyakumar will have a health plan that “even includes dental,” he wrote in an email. “I’m very pleased with the outcome.” Until then, he’s refraining from using his Citi Bike membership or playing sports, lest he sustain an injury requiring medical care.

And when it’s time to hire employees, he says he will most likely avoid the extra work of administering a company health insurance plan and instead encourage employees to shop the new health care exchanges on their own and bump up their salaries to cover the cost.

Research published in the journal Health Affairs showed that small businesses with 10 to 24 employees have paid 10 percent more than large ones for the same health care coverage, and that companies with fewer than 10 employees have paid 18 percent more until now. Small businesses’ plans were also more vulnerable to rate increases; as a result, they often provided less coverage, if they offered it at all, resulting in a competitive disadvantage in hiring.

Constantia Petrou, owner of Konnectology, a website that provides information on health care specialists, expects the new law to broaden her hiring options. When she started her company seven years ago in Burlingame, Calif., she realized that she couldn’t afford to offer a group plan.

“In terms of hiring, the health care expenses contribute a huge, huge component to your cost of operation,” Ms. Petrou says. So instead of bringing on full-time employees, she relied on contract workers.

She is looking forward to getting price information online from the Small Business Health Options Program, or SHOP, an exchange that was created by the new law. (Currently, business owners can obtain estimated SHOP prices online, but specific ones are only available by mail after filling out and mailing in a PDF downloaded from Healthcare.gov. Some states, including California, have their own SHOP exchanges, and their procedures vary.)

Ms. Petrou says the law could enable her to hire full-time employees, depending on the new costs of coverage. If so, she will either pay for a portion of the individual plans that her employees shop for on the exchange, or she may take advantage of tax credits and offer a small group plan. “We now have options to explore,” she says.

Some experts say this type of flexibility may have a big impact on the economy over all.

“Assuming we get the website working, it’s going to be the biggest step we’ve had in a long time in the U.S. in terms of changing the structure of the economy,” says Craig Garthwaite, assistant professor of management and strategy at Northwestern University’s Kellogg School of Management. Mr. Garthwaite is a co-author of one of two recent studies that conclude that the Affordable Care Act could spur entrepreneurship by easing job lock — where people stay in a job mainly for the health insurance.

The act was aimed at people like Jeannie Armstrong, who in 2009 was planning to quit her job within a couple of years to start a private clinic for adolescents with substance-abuse problems. But then her 18-year-old son learned that he had diabetes. Fearing that he would be unable to find individual health insurance, she has stayed in her job so her son could keep receiving coverage under her employer’s health plan.

“We’re talking pre-existing condition, we’re talking no money, we’re talking health care costs out of the roof,” Ms. Armstrong says of her son’s situation.

But in January, her son will be eligible for individual health insurance. That will free Ms. Armstrong to quit her job as a social worker in the juvenile court system of Fairfax County, Va., and to pursue her entrepreneurial dreams. Now, instead of opening a for-profit clinic, Ms. Armstrong has decided to go the social-entrepreneurship route. In September, she founded the nonprofit Center to End Adolescent Substance Abuse Encounters.

Over the next year, she plans to stay in her job while her son finishes school; in her free time, she will assemble a board of directors and write the organization’s bylaws. By next fall, she plans to be running the nonprofit full time.

“I’m not hamstrung by having to stay in this job,” she says.

Ms. Armstrong sees the new law as an opportunity to start something new. But Kevin Kuhlman, manager of legislative affairs for the National Federation of Independent Business, says that while job lock is a real concern for entrepreneurs, he remains skeptical that the new law will be able to solve the problem.

The federation unsuccessfully challenged the constitutionality of the Affordable Care Act’s requirement that most people obtain health insurance or pay a tax penalty,  in a case that went all the way to the Supreme Court last year. The plaintiffs were uninsured and didn’t believe that the government could require them to buy insurance.

Certainly, many established small-business owners are not clamoring for information on new health coverage. Barry Sloane, chairman and chief executive of Newtek Business Services, based in New York, says a majority of his customers
haven’t bothered to visit the exchanges.

“The negative publicity that’s come out about the site not functioning has kept people from thinking they can go to it and get a result,” Mr. Sloane says.

Prototype: Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands

“We had a lot, at least 100,” Julia estimated of their inventory, which they priced at $1 to $2 apiece. Sales were impressive that night — “we made like $68,” she said.

Julia is among hundreds of thousands of youngsters — and parents — in the United States who are using Rainbow Loom. The kit consists of two plastic template boards, a hook, 24 plastic clips and 600 multicolored mini rubber bands. From it, 24 bracelets can be woven into patterns similar to those traditionally used in lanyards and friendship bracelets, but more complex and colorful.

Rainbow Loom is the invention of Cheong Choon Ng , a Malaysian immigrant of Chinese descent with a graduate degree in mechanical engineering. He came up with the idea in 2010 and began selling the kit while employed as a crash-test engineer for Nissan.

In the past year, Rainbow Loom’s popularity has soared, spurring hundreds of YouTube fan videos and scores of so-called kidpreneurs like Julia. Now Mr. Ng is overseeing a rapidly growing company that he started from his living room in Novi, Mich.

Rainbow Loom began as Mr. Ng’s attempt to impress his two daughters, Teresa, now 15, and Michelle, now 12. One afternoon, the girls were making bracelets out of small rubber bands, and when Mr. Ng tried to join in, he found that his fingers were too big. He went to work creating a wooden board with push pins, which helped improve his dexterity but was too bulky to win his daughters’ approval.

Mr. Ng persisted, adding rows of pins. “I was putting pins on two and three and four rows, crisscrossing the rubber bands and making big bracelets,” he said. Finally, the girls were hooked, and they began to use the board to make gifts for friends and neighbors.

IT was Teresa who later suggested that her dad try to manufacture and sell the loom. His engineering background, which includes product design, quality control and manufacturing experience, provided a solid foundation for the project, and his brother, Cheong Yeow Ng, an engineer and inventor living in Wichita, Kan., encouraged him to sell the product online.

As with many new ventures, the first challenge was financial. “All we had saved to invest was $10,000,” Mr. Ng said.

When he found that his budget was too small for American manufacturers, he began vetting some in China. He sank $5,000 into the molding for the template and the other $5,000 into the kit’s parts.

A shipment of 2,000 pounds of rubber bands arrived at the family’s home in the summer of 2011. Mr. Ng assembled kits after arriving home from the office at night; his wife, Tyng Fen Chan, worked on them during the day.

They had limited success selling Rainbow Loom online, and their early attempts at placing it in major toy stores fell flat. Part of the problem was that people didn’t know what to make of the newfangled toy. To educate potential customers, Mr. Ng and his daughters posted instructional videos on YouTube, and he bought Google ads to help spread the word.

In the summer of 2012, Mr. Ng’s luck changed. The owner of a Learning Express Toys store, a chain of 130 franchises, placed an order for 24 looms, and, two days later, she called to reorder. Soon, other Learning Express Toys stores were clamoring for Rainbow Looms. The key to selling the kits, it turned out, was educating buyers about how to use them. Specialty toy and craft stores were just the place for loom demonstrations and classes.

For Gary and Molly Fitzpatrick, who own two Learning Express Toys stores in Ohio and one in Michigan, the Rainbow Loom has been a boon for their franchises. “It’s a substantial portion of our business right now,” Mr. Fitzpatrick said. The kit is listed as one of the top toys of the summer of 2013 on the chain’s Web site.

The Ngs initially called on friends and neighbors to help assemble the product, but now that work is done in China. Mr. Ng, who left his job at Nissan last fall, manages a staff of 12 and rents a 7,500-square-foot warehouse near his home to handle distribution. In all, 600 retailers carry Rainbow Loom, and just over one million units have been sold at a retail price of $15 to $17 each.

The most popular state for sales is New Jersey, according to Mr. Ng. Jennifer Grisafi of Montclair said that her local swimming club was a hotbed of Rainbow Loom activity all summer and that her 7-year-old son now prefers making bracelets to playing video games. “He loves doing technical stuff with his fingers,” Ms. Grisafi said. “It’s exciting to see how creative he can be.”

Summer camps, many of which prohibit electronics, are another place where the Rainbow Loom thrived. And beyond selling bracelets instead of lemonade, children have been busily posting how-to videos online. One YouTube user named Ashley has uploaded four such videos; the most popular, in which she explains how to make what she calls “a starburst bracelet,” has attracted around 450,000 views since Aug. 1. The official Rainbow Loom videos have garnered a total of 4.6 million views.

But like any new product in a competitive market, the Rainbow Loom faces challenges, including the tendency of children’s toys to fade in popularity. To keep his brand relevant, Mr. Ng is focusing on innovation.

“I am working on new tools to make more exciting rubber bands and more bracelet patterns,” he said. “I’m also expanding into designing accessories.”

Rainbow Loom has drawn comparisons to Silly Bandz, the springy rubber bands that were ubiquitous on children’s wrists several years ago. That company’s founder has branched out into watches and other types of jewelry and has formed partnerships with brands like Angry Birds and Barbie for themed bracelets.

IF Rainbow Loom attracts imitators, the key to keeping them at bay is having “a secret sauce” that no one else can replicate, according to Bill Aulet, managing director of the Martin Trust Center for M.I.T. Entrepreneurship and a senior lecturer at the M.I.T. Sloan School of Management. Rainbow Loom’s community of enthusiasts could be just that sauce.

“If there’s a whole ecosystem around this product, and it becomes very profitable, then someone would very likely come in and buy it,” Mr. Aulet said of Mr. Ng’s company.

Aside from that possibility, Mr. Aulet said he believes that outside help will be required to expand the business.

“He’ll need muscle of some sort,” Mr. Aulet said. “He’ll need a stronger team, more money, more expertise, partnerships. The complexity goes up exponentially as he starts to go national. It’s a whole new game.”

Prototype: Helping Hollywood Players Hook Up

The movie has a director with promise and cachet in Jake Hoffman, son of Dustin Hoffman. But still, when Mr. Haeussner set about looking for financial backing, he knew it would be tricky given the heroin use and other eccentricities in the film. “The doctor or dentist down the street who has $500,000 wasn’t going to invest in a project as unique as this one,” he says.

So instead of trotting it out to individual investors, the route independent filmmakers have taken for decades, he turned to a New York-based company called Slated that connects filmmakers and potential financiers on its Web site.

Slated is a free, members-only service that allows directors, producers, actors, sales agents and investors to communicate once they have been approved for membership and have created online profiles. It is “maybe like OKCupid,” Mr. Haeussner says, referring to the popular online dating site.

Members — there are 4,000 — describe their moviemaking or investing backgrounds, specify what types of movies they are interested in and indicate how much they are willing to invest. Filmmakers can also put up trailers for movies they want to finance, and everyone can send messages to one another privately.

The platform differs from crowdfunding sites like Kickstarter and Indiegogo — which the filmmakers Zach Braff, James Franco and Spike Lee, and the creator of the “Veronica Mars” television show, Rob Thomas, recently used to solicit donations for film projects — in that it simply introduces filmmakers and equity investors.

Slated was founded in 2010 by Stephan Paternot, an American Internet entrepreneur and film producer; Duncan Cork, a South African creative consultant; and two other partners. As Mr. Paternot put it, they realized separately that “there’s a fundamental structural problem with how films are financed.”

The early backers of a movie assume a great deal of risk, often paying to option a book, for instance, and develop the script. But they can be the last to see a return, even if the movie is a hit. “A lot of the value gets lost with the theater owners, the distributor, the sales agent,” Mr. Paternot says. “They all make a cut, they all get everything first.”

Changing the inner workings of the industry is one of Mr. Paternot’s and Mr. Cork’s missions, though they acknowledged it would not occur soon. For now, their focus is on streamlining the financing process.

Each film project listed on Slated is packaged for investors. It must have a director, a producer, a writer and principal cast to be considered. The budget requirements for a feature film are $500,000 to $15 million; for a documentary, $250,000 to $2 million. Slated restricts its membership to investors who meet the Securities and Exchange Commission requirements for accreditation — a net worth of $1 million or annual income of at least $200,000 for an individual and $300,000 for a household for the last two years.

The filmmakers and financiers negotiate the terms of the deals on their own, without Slated’s involvement. Since the company’s introduction in January 2012, nine films listed on the site have received financing. According to Mr. Cork and Mr. Paternot, investors in recent projects have committed amounts from $25,000 to several million dollars.

Eventually, Slated will begin charging transaction fees, much the way Kickstarter does.

To generate revenue in the meantime, it introduced an optional subscription service in July called First Look. For $500 a month or $5,000 a year, investors can peruse listings of what Mr. Cork and Mr. Paternot identify as more elite film projects, such as prominent documentaries and feature films with commitments from sought-after directors and actors. Their hope is that financing production companies will use First Look much as they now rely on development teams to sort through scripts in search of the most desirable projects.

Since its founding, Slated has raised about $4 million from its own investors. They include the entrepreneur Barry Silbert, founder of SecondMarket, an investment platform for private companies and funds.

Partners like Tribeca Film Institute contribute to Slated’s roster of films by recommending promising projects. Beth Janson, Tribeca’s executive director, says Slated’s strong investment bent is unusual. “The idea that investors are looking at the financials of a project is interesting,” she says. “They’re trying to present projects as a viable investment.”

In September, the S.E.C. will lift a ban that prevented businesses of all kinds from publicizing their fund-raising efforts — a change that could have a significant impact on hedge funds and venture capitalists as well as the film industry. Filmmakers who comply with a new set of regulations will be able to advertise online, in newspapers, and on radio, television and billboards. “You could take out an ad on Sunset Boulevard saying, ‘Fund My Movie,’ ” Mr. Cork says, adding that Slated planned to help its members navigate the new rules.

ONE of Slated’s most appealing assets is access, something even established filmmakers seek. “You’re rarely in a room with investors,” says Marina Zenovich, who won two Emmys for her 2008 documentary “Roman Polanski: Wanted and Desired” and turned to Slated in 2012 to finish financing her sequel, “Roman Polanski: Odd Man Out.”

“Slated is almost like being at a cocktail party with a bunch of investors, and, if they’re interested, they reach out to you,” she says. She raised about $100,000 through Slated for her movie, money her backers will recoup with a premium by October. The film will appear on Showtime, starting in late September.

Slated also hopes to refresh the pool of financiers available to filmmakers. “Everyone’s going after the same old investors who might be getting tired of investing if they’re not making money,” Ms. Zenovich says. By some accounts, Slated is already attracting new money. Mr. Haeussner says he has been contacted by potential financiers in London, Pakistan and India.

Of course, investing in movies remains fraught with risk. “This is one of the few industries where you make a full investment before you even know the product is marketable,” says Jason E. Squire, a professor at the USC School of Cinematic Arts and editor of “The Movie Business Book.” And the industry has had its share of fraudulent financiers over the years, creating mistrust among filmmakers.

The partners still hope to confront those structural issues. For now, Slated is trying to mitigate early-stage financial risk by doing such things as standardizing legal contracts, to help reduce transaction costs and make it easier to finance projects.

Another goal is to help educate both sides. For potential investors, it is a matter of addressing such questions as how to assess the relevance of a film, or how to determine the likelihood of a financial return. For filmmakers, it means teaching them the language of finance and how to present projects as more than just creative ventures.

As Mr. Paternot put it, “Professional investors are like, ‘I just want to make money.’ ”

Prototype: Tech Accessories, Courtesy of the Mountain Pine Beetle

With his father and stepmother, Dave and Nadine Lipson, he owns 37,000 acres that include a cattle ranch, a resort and a 10-mile stretch of the Blackfoot River, other parts of which were featured in the 1992 film “A River Runs Through It.” The infestation had the potential to ruin their business, which banks on the area’s scenic beauty.

“Having a resort in Montana with no trees is a big problem,” Mr. Lipson says. So rather than watch the bugs turn the land into a tinderbox for wildfires, the Lipsons decided to take steps to stop the beetles in their tracks. In the process, they found a way to turn their ravaged wood into something useful: a material for making accessories for Apple products. Their story offers lessons in adapting when an environmental crisis hits and, more broadly, how to be resilient in the face of adversity.

The mountain pine beetles that descended on the Lipsons’ ranch have coexisted with pine trees for millenniums, but as temperatures have risen in recent years, the insect’s range, population and winter survival rate have grown. The beetles now inhabit trees from Southern California all the way up to the Northwest Territories of Canada and as far east as South Dakota.

“From an evolutionary perspective, it’s very similar to a pack of wild dogs attacking an elk,” Andrew M. Liebhold, an entomologist with the United States Forest Service, says of the beetles’ prowess. “When they gang up on the tree in large numbers, they’re able to overcome its resistance.”

The Lipsons’ challenge was to shut down the pack. “We had scouts that hiked through the forest, identifying trees that were infected,” Mr. Lipson says, adding that the needles turn a burnt-red color. The next step was to isolate those trees by thinning around them, then cut them down and haul them out. Within two years, their corner of the infestation was under control.

But now they had thousands of tons of lumber to dispose of. While other landowners burned the wood or sent it to mills to be mulched into sawdust, Mr. Lipson, a self-proclaimed serial entrepreneur, was eager to find a better use.

He learned that beetle-kill timber retains its structural integrity if harvested before the natural decay process begins. He reasoned that the wood could be used for flooring, framing and moldings in projects on the ranch, which has more than 50 buildings, so he sent 16 feet of raw timber to a mill for processing. What came back surprised him: a shimmery, blue-tinged wood. The mountain pine beetle, he found out, carries a fungus that produces a natural blue stain. “We thought it was pretty spectacular-looking,” he says.

That further motivated the Lipsons to make something out of the wood. Last June, they started Bad Beetle, which makes accessories for Apple computers, tablets and phones. They also hope that the company will raise awareness about the mountain pine beetle infestation.

The accessories “have the ability to reach people who are interested in eco-minded issues,” Mr. Lipson says. In January, Bad Beetle started offering iPhone backs and iPad stands on its Web site and has sold 730 so far. This summer, it will roll out cases for MacBook computers and iPads. Should Apple, which doesn’t require a licensing agreement for the products, become interested in selling Bad Beetle items in its stores or online, Mr. Lipson says he’s prepared: “We have a stockpile of blue-stain pine that will provide the raw material for Bad Beetle products indefinitely.”

Were his supply to somehow run out, replenishing it would be easy. Some 20 billion cubic feet of such beetle-kill timber is now standing in 12 Western states, by Forest Service estimates. Private land with gently sloping contours and good access to roads provides the easiest and most profitable harvesting and manufacturing opportunities.

Bad Beetle is not the only company using this type of wood. Judson Beaumont, a furniture designer who owns Straight Line Designs, based in Vancouver, British Columbia, creates cabinets, benches and children’s treehouses with beetle-infected two-by-fours. He estimates that in the past three years he has sold about 75 items at $1,000 to $4,000 each.

“It’s probably been my most successful run of furniture pieces,” he says.

John Stein, owner of Kirei, a company based in Solana Beach, Calif., says architects and interior designers have been enthusiastic about the beetle-kill wood panels it began selling six months ago. When they hear the back story, “it resonates,” he says. That’s especially true in the West, where many prospective buyers have firsthand experience with the beetle infestation.

The Forest Service’s Forest Products Laboratory based in Madison, Wis., has worked with insect-killed wood for 50 years, and is now using it as a component in plywood-like panels. The state of Colorado has exempted beetle-kill lumber, sawdust and furniture from sales tax, and estimates that the value of items made from trees felled by the mountain pine beetle and the spruce beetle will hit $22 million this year.

The byproducts of two environmental scourges in Southeast Asia have similarly been transformed into furniture at the hands of Bannavis Andrew Sribyatta, founder and design director of a Miami design firm, Project Import Export.

He obtains dried water hyacinths and liana vines — both considered destructive plants — from his home country, Thailand. He weaves them into chairs, chaise lounges and wall panels for individual and commercial clients, including a Nobu restaurant in Los Angeles. The story behind his creations often “seals the deal” for potential buyers, he says. “Our work doesn’t stop at the point where I tell the customers about the product,” he says. “They tell their friends. It’s a topic of conversation.”

The effort involved in transforming these raw materials typically results in higher prices. Bad Beetle’s iPhone backs, for instance, cost $69, whereas silicone ones by the fashion designer Marc Jacobs sell for up to $48 and resin hard cases by Kate Spade are $40.

GIVEN the industry’s youth, it’s not yet known how many consumers will pay a premium for such products, but according to Thomas Lyon, a professor at the Erb Institute for Global Sustainable Enterprise at the University of Michigan, the beetle-kill wood could be a tough sell.

Since it would otherwise go to waste, the timber that’s used can be considered sustainable. But the response to sustainably produced wood has been underwhelming so far, Professor Lyon says, adding that people tend to open their wallets enthusiastically only for items that affect their health or are showpieces. With wood products, those criteria rarely exist. “Typically they’re hiding behind your walls,” he says. “Nobody can see that you bought sustainable wood.”

Buyers, however, could consider high-end furniture or hand-held tech accessories as a kind of wooden bling that’s worthy of their dollars.

If businesses can “transform the color into a positive so that it becomes something cool, then it may sell for a premium,” Professor Lyon says. “But it won’t be because it was sustainable, is my guess.”

Prototype: At Ministry of Supply, Teamwork in Making High-Tech Apparel

Six years later, while riding his bike around the campus of the Massachusetts Institute of Technology as an engineering student, he realized he needed a dress shirt that could withstand the rigors of bicycle commuting. This time, he teamed up with a classmate and set out to make that missing item in the clothing market.

But they weren’t the only ones at M.I.T. to identify such a problem. Two students at its Sloan School of Management soon got together to develop their own version of work-appropriate clothing made with practical fabrics.

One was Kit Hickey, a former investment banker who had been frustrated that her Brooks Brothers suits were so stiff compared with her rock-climbing togs. The other was Aman Advani, now 28, who in his previous life as a management consultant had begun cutting the tubes from his dress socks and stitching them to the feet of his sports socks to build better footwear for his rigorous travel schedule.

The two groups, potential competitors, met each other at M.I.T.’s entrepreneur center in 2011. But instead of seeing each other as rivals, they decided to work together. “We were like, ‘Oh my God, this is crazy.’ I can’t believe we found each other,” Ms. Hickey, 28, says of the meeting.

“It was promising to know that there might actually be a market for this,” adds Mr. Amarasiriwardena, 24. By this time, he and his classmate Kevin Rustagi had started Ministry of Supply, a clothing business based in Boston that specializes in high-tech office apparel. Soon after the meeting, Ms. Hickey and Mr. Advani joined the company.

Business partners often cross paths in the early, brainstorming stages of a project. But it’s unusual for alliances to form further down the line, after each side is emotionally invested in its idea, according to Joseph B. Lassiter, a professor at the Harvard Business School and faculty chairman of the Harvard Innovation Lab.

“Everybody wants to have a baby, but your baby is different than the other guy’s baby and you’re in love with it,” Professor Lassiter says. “You think the other guy’s baby isn’t as cute as yours.”

A similar apparel company, called Outlier and based in Brooklyn, was also formed by people who might have become competitors. Abe Burmeister and Tyler Clemens, its founders, were two bicycle commuters who met at their local coffee shop after one had already been stitching prototypes of cycling-friendly dress shirts and the other was making durable dress pants.

“Turns out we had been working with the same fabrics and looking at very similar problems,” Mr. Burmeister wrote in an e-mail.

With complementary products, the two saw that their babies would make excellent siblings. “Within a couple months of that meeting we teamed up to launch Outlier,” Mr. Burmeister added.

In Ministry of Supply’s case, the concepts of the two potential competitors were nearly identical. True to their M.I.T. backgrounds, the founders are focusing on technological innovation.

Mr. Amarasiriwardena and his team have relied on an engineering process used in aerospace design to help understand how the body’s skin moves, so that their garments will stretch in a similar way. They use thermal imaging to find the spots in the body that generate the most heat, so they can determine where to place vents in the shirts.

Some of the fabric was created with a material that NASA had designed to regulate astronauts’ body temperatures in 200-degree heat changes. Ministry of Supply has a license to use the technology for the material. While the primary task of most athletic apparel is to manage sweat, this fabric keeps the body cool, preventing perspiration from occurring in the first place.

To execute some of the designs, they use computerized knitting. “It lets us dictate if we want a lighter mesh in the underarm in the back, but we want more coverage in the front,” Mr. Amarasiriwardena explains.

But for a high-tech apparel product to achieve mass appeal, it must also be aesthetically pleasing. “If it doesn’t look good, it’s over,” says Mark Satkiewicz, president of SmartWool, a company that sells high-performance merino wool socks and clothing.

The key is finding a balance between looks and performance, which is no simple feat, Mr. Satkiewicz says. “It’s very difficult,” he says. “I don’t think any brands have hit a home run every time.”

To address this issue, Ministry of Supply tapped its customers from its beta stage for feedback before it opened to the public last June. A New York fashion designer then incorporated the suggestions into new designs. “We did more than 20 iterations of the dress shirt and we were progressively able to improve the aesthetic,” Ms. Hickey says, and as a result, the clothing now has a far more tailored appearance. Since last June, the company has sold 12,800 shirts and pants through its Web site and its Boston showroom (Mr. Rustagi left the company last year.)

One of the early adopters was Craig Breslow, 32, a pitcher for the Boston Red Sox whose fiancée bought him a shirt as a birthday present. She thought it would “appeal to the nerd” in him, he recalls, while he was “just hoping the fashion side of things would be passable.” Mr. Breslow is a Yale graduate with a bachelor’s degree in molecular biophysics and biochemistry.

Mr. Breslow decided to take the shirt on the road during the baseball season, testing it in the disparate climates of places like Texas and Toronto. It came in handy after games, when he and his teammates “have about 30 minutes to eat, shower, stop sweating and put on a suit,” he says. He liked the shirt — and its look — so much that he bought two more shirts, as well as a pair of slacks, whose comfort he compared to that of sweat pants. Then he decided to invest $50,000 in the company.

“It’s like the scientific method,” Mr. Breslow says of Ministry of Supply’s approach. “Find a problem, develop a hypothesis, test it and reach a conclusion. That’s something I can appreciate.”

Prototype: Pest Control in the Sky, Courtesy of a Raptor

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Prototype: Using Aluminum to Lighten Manufacturers’ Load

But innovations in their design and manufacture may play an important role in creating a fleet of more environmentally sustainable cars and trucks.

Taylor Hopkins, 24, was part of a five-student research team at Ohio State University that recently created three novel designs for shipping pallets. Ordinary pallets are made of wood; the students’ prototypes are made of aluminum, which lasts longer.

The aluminum pallets are also much lighter than wood pallets, which saves fuel during shipping.

“We were presented with the problem of, try and come up with a new pallet that we thought could make an impact environmentally,” Mr. Hopkins said. “We ended up going with aluminum just because it’s very widely used and it’s lightweight.”

Aluminum is also significantly more expensive than wood, which means that the students’ designs are unlikely to become the industry norm soon. But the technology behind them could be useful to carmakers, which have started to embrace aluminum as a means of building lighter, more fuel-efficient vehicles.

“This project is such an interesting microcosm of the challenges that the transportation industry in total is facing, in moving from heavy steel to lightweight aluminum,” said Randall Scheps, automotive marketing director of Alcoa, and chairman of the aluminum transportation group at the Aluminum Association. Mr. Scheps said the student team looked at various methods of joining, or bonding, metals. It also looked at forming, or bending, metals, and at recycling. “These are all issues that the auto industry is facing,” he said.

Companies and foundations have been looking to young innovators for environmentally sustainable and cost-effective solutions to real-world problems. In the case of the shipping pallets, the project was funded with a grant from the Alcoa Foundation, which wants future engineers to think about use of lightweight materials. (Although the use of aluminum clearly benefits Alcoa, an aluminum company, it did not have to be used in the project.)

It’s an issue that has taken on urgency in Detroit in anticipation of Obama administration fuel-economy regulations that will require American vehicles to average 54.5 miles per gallon by 2025. Ford, for instance, that producer of macho, all-terrain trucks, is working on an aluminum version of its popular F-150 pickup.

Dr. Glenn Daehn, a professor of materials science and engineering at Ohio State and the students’ research adviser, says the aluminum shipping pallets are an example of “using simple projects to inject ideas into how we might make lighter-weight door systems or seats” — research that Ohio State is working on with companies like Honda and General Motors.

Mr. Hopkins said welding is an issue in dealing with aluminum. “There’s just a certain property of aluminum that if you heat it up too much, or for too long, it loses a lot of its strength,” he said.

To get around that, the students relied on “conformal interference joining technology,” a method of joining metals through a process involving electromagnetism, as opposed to heat.

Then there was the question of how to make the pallets cost-effective. Aluminum pallets on the market can cost more than $200 each, in part because they are welded by hand. Aluminum pallets are used to ship materials that must be kept sterile, or that will be stored for long periods.

But the students’ models are all estimated to cost less than $75 each. That was achieved by making the designs simple enough so they could be mass-produced.

“They weren’t some crazy designs that would take 20 hours to produce, where you’d have to do it one at a time,” Mr. Hopkins said. “Our designs can be automated. They only have two, separate pieces in a couple of them.” That makes it possible to “knock them out in a short amount of time,” he said.

WHILE the project could eventually affect how cars are manufactured, it may not change the world’s shipping pallets. According to Edgar Deomano, technical director of the National Wooden Pallet and Container Association, wood pallets, which account for 90 percent of the domestic market, are not going away, mainly because of cost.

“A recycled, or repaired, wood pallet could go for as low as $3 each,” Mr. Deomano said.

As for the argument that wooden shipping pallets are responsible for deforestation, he said: “That’s a false impression. Our industry is able to recycle pallets again and again. You don’t have to cut down more trees, you just have to repair existing pallets.”

Dr. Daehn says he remains hopeful, however, that a company will “step forward and commercialize” the new aluminum shipping pallets.

“We need more than a student project to do that, but I think we’ve shown them the promise is there.”

In the meantime, the project has already served Mr. Hopkins well. After graduating from Ohio State in June, he was hired as a metallurgist at Valbruna Slater Stainless in Fort Wayne, Ind.

“It was definitely one of my résumé highlights,” he said.