Will Ferrell, Chris Henchy, and Adam McKay
Co-founders, Funny or Die

Hollywood needs more people like Will Ferrell, Chris Henchy, and Adam McKay.

We say this not because we enjoy Eastbound and Down, the bender of a sitcom they produce for HBO, and The Other Guys, the buddy comedy that Henchy, 46, and McKay, 42, wrote and in which Ferrell, 43, starred. We say it because the three men could have easily spent the past few years focusing exclusively on extracting money from their existing franchises. (Step Brothers 2, anyone?) Instead, they have chosen to do work on something risky, ambitious, and, at least in Hollywood, entirely strange: a start-up.

Funny or Die was born in April 2007 with seed funding from Sequoia Capital. The idea: to combine low-budget shorts created by professionals with videos submitted by amateurs. The founders shot the first video in an afternoon at Ferrell's house and cast McKay's 2-year-old daughter, Pearl, as a foulmouthed ("You pay now, bitch!"), drunk landlord. "It seemed like there was a melding of TV, film, and the Internet," says McKay. "But we didn't dare think that we would be on the cusp of that change."

They were wrong. Within a matter of days, "The Landlord," which is as offensive and hilarious as it sounds, had been seen by more than a million people. At presstime, it has been viewed 74 million times, and Funny or Die now attracts 10 million viewers a month, succeeding where numerous websites created by studios and TV networks have failed. The company employs 60 people and is booking revenues in the tens of millions of dollars, mostly through the sale of ads. This past year, it turned its first profit.

Ferrell calls reaching profitability "amazing, especially in this economy." We think it's amazing that the guy who played Jacobim Mugatu in Zoolander has created a new kind of movie studio. Funny or Die has TV shows on HBO and Comedy Central and has filmed a pilot for TBS. Next year, it will produce its first feature film. "This company is becoming a great place for young comedy people to work," says Ferrell. "Hopefully, down the road, you'll hear, 'I worked at Funny or Die for two years and went on to direct my award-winning short.'"