When Shepard Fairey arrived in New York City this past September, it was at an interesting moment in a curious career. In some circles, the 34-year-old Fairey is known as one of the most prolific and notorious street artists of his generation, creating memorable graphics that have spread through urban centers all over the world. He was in New York to join a panel at a conference called Creativity Now, where he would speak on the subject of "The Commodification of Street Art."

At the time, Fairey had just split with a longtime creative partner and founded his own marketing design firm, Studio Number One. After the conference he and his wife, Amanda, would visit Japan, where a couple of shops sell clothing that features his imagery. Then he would return to Los Angeles, where he is based, to finish preparing for his latest gallery exhibition, titled "This Is Your God," which juxtaposed his signature graphics with dollar bills. He would also get started on Studio Number One's first projects for some very large corporate clients who hope Fairey can help them connect with a much-sought-after demographic.

All of this should be enough to make it clear that Fairey walks a fine line between art and commerce, between the underground world of graffiti culture and the very mainstream world of selling products to consumers. "Sometimes," he said at the panel discussion, "I feel like a double agent." But even at the conference in New York, where it would have been easy to pander to a largely alternative culture crowd by denouncing corporations, he described himself as a capitalism-embracing entrepreneur.

Yet that is not quite the whole story. Later that night, Fairey went out with a few friends to put up some of his street images--"bombing," as the process is called. Spotting an irresistible blank billboard in Manhattan's Chinatown, he managed to get to the roof of a building with a six- by eight-foot folded-up poster, a small bucket of wheat paste, and a roller. He got the image up, but then things went awry: Someone called the police, and Fairey was arrested, charged with criminal mischief and trespassing. He spent the next 48 hours in jail. It was his ninth bust.

"Sometimes I feel like a double agent," says Fairey.

The rap sheet has not kept Fairey from landing mainstream clients. Imagery he created with his earlier firm, known as BLK/MRKT, has supported the marketing efforts of such household brands as Levi's, Mountain Dew, and Universal Pictures. The new Studio Number One assignments awaiting him as he posted his $1,000 bail included label designs for Express jeans and the graphics for an upcoming repositioning campaign for Sunkist, the orange soda made by Dr Pepper/Seven Up.

Can you call someone a maverick if he works for multinational corporations? Can you call him a sellout if he's willing to risk arrest for the sake of self-expression? Can you call him a self-promoter if his most famous images are unsigned? Just as the "meaning" of Fairey's street visuals depends on who's looking, the answers to those questions vary according to who's asking. But wherever you come down, the underlying issue is one that resonates: Many entrepreneurs wrestle with the problem of integrity--the tension between what you want to do and what the market is willing to pay you to do. As hard as it is to craft a vision, it can be even harder to stick to it, to avoid letting pragmatism descend into compromise, to keep alive the idealism that inspired you in the first place.

Several weeks after Fairey's eventful trip to New York, the offices of Studio Number One seem relatively calm, even mellow. (The criminal charges were still unresolved, pending an April hearing.) Situated in the blue-green Wiltern Building in L.A.'s Koreatown, Studio Number One has seven full-time employees plus a handful of part-timers and interns. The front section of the office has been made over into an art gallery--known as Subliminal Projects--and there are stacks of posters with the image that Fairey made into his street-art signature: a vaguely menacing visage, often paired with the word Obey or Giant, which he refers to as "the icon face." Fairey's office, in the back, is stuffed with art books, decorated with album covers, and co-occupied by George, a year-old pug. There isn't much obvious structure at the firm; Fairey simply strolls out and hangs around his designers' cubicles, looking over their shoulders. There is usually music playing, often hip-hop or punk. This week, Fairey was making new designs for the Obey Giant clothing line and overseeing the first issue of a magazine called Swindle, his latest project.

Although Studio Number One was only a couple of months old at this point, the same space had housed BLK/MRKT, which was formed back in 1996 when Fairey joined with artist and designer Dave Kinsey. Differences both creative and personal led to a split, with Kinsey keeping the old firm's name and Fairey taking the offices and most of the personnel.

One thing that's not immediately obvious is why Fairey would use his skills on behalf of a corporation. A low-key but affable guy, with short hair and a solid build, Fairey favors T-shirts (Sex Pistols, Ramones), jeans, and sneakers. Earlier in his street-art career, he routinely pasted the Obey icon face over advertisements. In one of his final such acts, he added the head to a series of Sprite "Obey your thirst" billboards (later he was actually hired by Sprite, and while he wondered if his client knew about that stunt, he didn't ask). He admits he'd like to be more selective--pretty much the only thing he rules out is work for tobacco companies--and that there are times when clients can be painfully predictable. He slips into mimicry: "We want to push the envelope, but we don't want to tear the envelope. We want to be outside the box--but the box needs to be nearby." Pause, smile, big laugh.

Yet he also says he's been consistently surprised about which clients are fun and satisfying to work for and which are not. Express has been smart and accommodating--a bit of a surprise considering that the brand is synonymous with mass shopping-mall retail. The people in Levi's marketing department were so plugged in they knew about the White Stripes before he did. On the other hand, his experience doing work for a Los Angeles alternative rock station is described with a round of profanity, and he found the neopunk band blink-182 to be clueless phonies. So he tries not to make assumptions.

Of course, the other thing that's not immediately obvious is why a corporation would want to work with Shepard Fairey.

The clients who have hired Studio Number One or BLK/MRKT often have in mind untraditional marketing campaigns built on word of mouth and reputation. So it makes sense that word of mouth and reputation come up so often as those clients explain how they connected with Fairey in the first place.

Justin McCormack, a marketing consultant, was promoting an extreme-sports event called the Gravity Games in 1999. "We were looking for someone who could help us reach this elusive youth market," he says. Young males, as he points out, are famously hard to target, watching little television and espousing a cynical attitude toward traditional media and advertising. At the time, McCormack says, he had no idea how to go after that demographic, so he started asking around. He heard about Fairey's firm, but the name didn't mean much to him--until he noticed a familiar image in the portfolio. An avid art fan, he had long been intrigued by the mysterious Obey imagery he'd seen in New York and other cities, and he'd wondered who was behind it. "I said, 'Holy smokes--it's you!"

Can you call someone a maverick if he works for giant corporations?

Fairey's firm promptly got the job of creating the Gravity Games' brand imagery and helping promote the event. "I don't know if I should say this, because it's illegal, but we hired [Fairey] to go out and poster downtown L.A. with our Gravity image," McCormack says. The event was a hit. More recently he hired the studio to create the logo for a new wireless scheme, called MobilRelay, that will offer users discounts on certain youth-oriented products and services from partner companies. "Studio Number One created a visual that's both corporate and cool, visually familiar and sexy. But it's not exclusionary to those who aren't that cool. They nailed it."

McCormack offers an interesting barometer for how to judge whether promotional imagery resonates with those elusive youths. "You have to give them something they really want," he says, so if a poster or a sticker looks so cool that kids are saving it and sticking it on a bulletin board, then it's a success. You can't stick a website on a bulletin board, but the home page for MobilRelay (which is slated to go live in a few months) has a rough, paint-splattered, organic feel; at the same time, it's not so wild-looking that it's hard to read. Anyone who's interested can navigate it. That's the sweet spot that a lot of marketers are looking for, but it's hard to achieve. In Fairey's view, this is largely a matter of instinct--like Louis Armstrong's famous response when asked to define jazz: "If you have to ask, you'll never know." He's able to connect with this demographic because he shares its mindset; he's not an outsider trying to find his way through a subculture, but rather a product of that subculture--one who still participates in it. "I can't really put my finger on why other people don't seem to be able to do stuff that just for me is very logical," he says. "It's hard to deconstruct when you're so close to it."

Robert Douglas, who is director of lifestyle marketing for the Brand Buzz unit of mega ad agency Young & Rubicam, tracked down Fairey several years ago after seeing his street art. He used BLK/MRKT for multiple projects, including producing graphics for a youth-oriented 7 UP spinoff called dnL. When Dr Pepper/Seven Up, the Plano, Texas-based beverage giant, tapped his firm to work on the relaunch of Sunkist, Douglas quickly called Studio Number One. The project is a good example of how the process works.

In early October, Douglas sent over an explanation of the planned Sunkist promotion. Called "Charged Experiences," it involves a contest that will allow various winners to, for instance, hang out with pro athletes or get onto the set of a blockbuster movie. It's scheduled to roll out this summer and will be supported by print and television ads. The target: "multicultural urban teens and influencers" age 13 to 18. (This will be, of course, a departure from the traditional Sunkist beach vibe.) The assignment: treatments of a "Sunkist Charged Experiences" logo, including one with a "graffiti look."

Often, Fairey points out, client directives can be vague, boiling down to something along the lines of: Make it look cool. "They'll say they're going for a little bit more of an urban feel, so we ask, 'Urban like hip-hop, like black? Or urban like disaffected suburban white graffiti kids?' And they get a little bit more specific: 'Well, we don't want it to be too graffiti, because we can't promote graffiti, but we definitely want it to be a little edgier.' So we take that and translate it to, like, a city skyline, the sort of generic cool urban symbol. And we throw a few concepts together."

There aren't a lot of meetings at Studio Number One. After a conference call with Douglas, Fairey and his designers separated and started working up their own ideas. Some of these generally get tossed, and others might be mixed together into hybrids, but for the first stage the client usually gets a lot of options because having visuals to react to can be a lot more productive than buzzword chatter. With the Sunkist project, there were a lot of guidelines--the type style of Sunkist would not change, its familiar orange-and-blue combo would dominate, etc.--meaning a narrower range of variations was possible. After a week or so, Studio Number One sent its four top picks to Douglas via a secure website and in physical examples.

The biggest pitfall on a project like this, Fairey believes, is ending up with a look that seems forced, insincere, made by outsiders. "You have to be familiar with the graphic language that the people you're trying to reach will respond to," he says. One common mistake in attempting a graffitilike feel, for example, "is to grab a typeface from the computer that's supposed to look like graffiti. But the thing about graffiti is that all the letter forms are based on how they look next to each other. Your a might slant one way or curlicue over this way if it's next to one letter as opposed to another. So it's impossible to create a typeface, and those computer typefaces always look really awkward."

Studio Number One designer Florencio Zavala--he started out as an intern at BLK/MRKT and is also an artist whose work has an urban folk-art feel--hand-scrawled the word Charged in a graffiti-ish flourish. This had the right look and became the centerpiece of a design with a silhouetted cityscape and a series of icons suggesting some of the contest categories. This was one of the treatments Douglas liked best; he asked for some tweaks, then took the results to his clients, who signed off on it.

Asked about his own take on the submitted designs, Fairey sounds almost ambivalent. Brand Buzz had sent over some sample, starting-point designs, but those "looked really flat, didn't have any pop, any zing. It looked like outsiders trying to create stuff for that culture." While the designs Studio One submitted were all things that he and his staff basically felt looked pretty cool, given the constraints, Fairey didn't have a clear favorite and was more than willing to go with whatever made the client happy. "I mean, the stuff that we did is pretty boring compared with other stuff that we do. But it's all relative."

Fairey says he's a capitalism-embracing entrepreneur.

Most of the time, the question of what makes a visual style seem right is hard to pin down. For Express, one of Fairey's designs featured a striking eagle, wings wide, clutching a ribbon with the nonsense phrase "E Pluribus Denim" in blocky letters. "I knew Express was gonna pick that one," he says. "The company seems to want to appeal to Americana, but in a way that also works with people who might have eagle tattoos--bikers and stuff like that. I tried to make it something that was a balance of those things."

Justin McCormack, the marketing consultant, says that he knew he was getting access to an artist with "rock-star status" in the scene he was targeting, but he wasn't sure he was getting someone who was particularly professional. But clients describe Fairey and his team as fast, deadline-sensitive, and responsive. "Basically," McCormack says, "he treats everything like art." At first this surprised him, but looking back, he figures it makes sense when he thinks about the street-art style that made Fairey notorious. "What he was doing was creating propaganda. From there," he chuckles, "it's not such a leap to creating advertising."

When Fairey was a member of the 13-to-18 demographic, he lived in Charleston, S.C., where his obsessions were skateboarding and punk. He chose to go to the Rhode Island School of Design because he had a vague idea that he could make a living in a visual field. He got interested in screen printing. "What happened at RISD was that immediately people were talking about 'What's your major gonna be?' And people that were going into painting thought they were superior to people that were going into illustration, because"--he adopts a fey art-snob voice-- "'Illustration is commercial. I'm not compromising for anyone."

Fairey majored in illustration. He believed, he says, that his fellow students who had chosen to be painters were already compromising their work and were likely to do so even more as they moved into the world of fine-art galleries. He also admits that he was "scared" of the fine-art world. "I did blow it off. Because...," he pauses for a long moment, "honestly, I didn't think that I had the talent to make it in that world."

One night in 1989, when Fairey was still at RISD, he had a friend over who wanted to learn how to make stencils. Fairey flipped through a newspaper and picked out a picture of Andre Roussimoff--or Andre the Giant, the (now deceased) professional wrestler best known for his role in The Princess Bride. The friend balked because the image was too "stupid." Fairey was intrigued. No, he countered, it's cool. It's cutting edge. "Andre the Giant," he told his friend, "has a posse." They proceeded.

Next to the smeary image of the wrestler's face, Fairey scrawled "Andre the Giant Has a Posse." He took the results to Kinko's and made stickers and slapped them on stop signs and in clubs. Then--randomly, in places like his local grocery store--he started hearing people talk about the stickers, asking each other what it might mean. So he put up more of the images, in New York City and Boston. He encouraged others to join in, with stickers, spray-paint stencils, and wheat-pasted posters. Later he shifted away from the longer tag line to the concise "Obey Giant," and started making visual variations, reworking the face in Russian constructivist styles and working it into different graphic contexts. Strictly speaking, what Fairey was doing and encouraging was illegal. Yet it was subversive to no obvious end. It was a kind of self-reflexive enterprise: The point of putting up a lot of Obey images was to see how many Obey images could be put up.

Meanwhile, Fairey had started making T-shirts, and in the summer after his junior year, he started a printing business. He wrote off the fine-art world altogether. "I looked at it like this: I can be seen as cool and creative and somebody that's bringing great stuff into the realm of, you know, pop culture and skateboarding and punk music, in just whatever Dada goof-off stickering. Or I can be seen as not that talented in the fine-art world." He laughs. "So naturally I'm gonna gravitate to where I think I can succeed."

When his print shop struggled, he sold it and moved to San Diego, eventually teaming with Kinsey at what became BLK/MRKT. He was $30,000 in debt. "At that time in my life, you know, there was no, like, ethical consideration. Like, 'Would this be compromising my art?' I have to survive. Right now." He also had no experience using a computer, which was becoming a necessity for designers. In a gamble that nearly bankrupted them, he and Kinsey printed an expensive brochure and did a mass mailing to as many companies as they could think of.

By then, Obey Giant was a minor phenomenon, but of course it had never generated a dime--nor was it intended to. To the extent that the campaign had a point, it was simply to provoke thought and reaction in the viewer; its lack of context or reference point was part of the idea. But the years of spreading the campaign for esoteric reasons paid off in a way Fairey could never have anticipated and brought him, ironically enough, to the attention of the fine-art world. Gallery owners in New York City and elsewhere would see the posters, track him down, and ask him to participate in shows. "In the end, I completely circumvented the gallery system by doing street art."

It also helped his new business. That mailing got attention. "A lot of people at the companies we mailed to also had seen my stuff on the street and were looking for a way to get hold of me but had no idea how. So when we sent the brochure out and it had samples of my work, they were like 'There's that guy!' It wasn't ever my strategy that I was trying to advertise my graphic-design skills with the posters. It was the de facto result."

Fairey owns Studio Number One with his wife, Amanda. They also own the gallery and Obey Giant Art Inc., which sells Fairey's fine-art work (bought by museums, as well as clients like Ozzy Osbourne and the rapper Chingy). Finally, there is a licensing deal with a partnership called Obey Clothing, which makes and sells T-shirts, jackets, pants, and so on, for men and women, all featuring the icon face. Royalties go to Obey Giant LLC, another partnership.

BLK/MRKT's annual revenue with Fairey reached nearly $1 million, and the goal for Studio Number One is to get back to that level on an annual basis. By early January, the Sunkist and Express projects were done (Express was market-testing the eagle design that Fairey created but had not made final plans for rolling out the jeans), and new ones were starting up. In all, it's not a bad situation for the guy who didn't have enough confidence in his work to pursue a traditional art career. But it's still pretty complicated. He has learned, for example, that when he turns down those who want something recognizably in sync with his street art, someone else ends up getting hired to imitate that style. And he won't get paid. So he tends not to turn down such assignments. Why should someone else get paid to rip off his street art if he can figure out a way to do it himself, presumably better?

Not surprisingly, Fairey has heard the charge that he's a sellout, particularly from fans of his earliest work who accuse him of employing his skills for needlessly commercial ends. Fairey's attitude is, not surprisingly, more complex. On the one hand, he will roll his eyes at the predictable demands of those clients who seem to be chasing the same handful of "trendy" consumers. On the other hand, he takes pride in the work he does for those clients.

It took a certain stubbornness to stick with a project like Obey Giant for those years when it was little more than a curiosity, and that may be Fairey's defining characteristic. Questioned about why, in his middle 30s, he still feels the need to sneak around in the dead of night pasting up his images--that New York City incident wasn't isolated; I got a tour of freshly pasted images in Los Angeles--he says it's something he simply "needs" to do. In similar fashion, Fairey refuses to concede much to critics. "People make this very black-and-white delineation. But I say, 'How would you feel about it if it were a little more ambiguous? If all companies had marketing materials that didn't insult the consumer? That were somewhat creative and intelligent and almost like an art piece with a product behind it?" The self-branded rebels might not like it, he says, but "it sounds pretty utopian to me." I

Rob Walker wrote about negotiating in Inc.'s August 2003 issue.