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The Art and Science of Funny or Die

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"When the legend becomes fact, print the legend." -Carleton Young as Maxwell Scott in John Ford's The Man Who Shot Liberty Valance

It all began when two Saturday Night Live alums-Will Ferrell and Adam McKay, who were also responsible for such comedy hits as Anchorman and Talladega Nights-shot a funny little video with McKay's daughter and decided to throw it up online. "The Landlord" went viral, and thus, Funny or Die was born.

Or at least that's how the legend goes. And as legends go, it's a pretty good one, especially if you're of the mind that online video has the promise to be just as big as television or film.

The fact is, Funny or Die is as much the brainchild of Sequoia Capital's Mark Kvamme, who put up $17,000 and enlisted the pro bono help of a handful of tech startup veterans to launch the site from a technical standpoint. For the content, Kvamme spoke with a friend at Creative Artists Agency (CAA), who suggested enlisting Gary Sanchez Productions-the company owned by Ferrell, McKay, and Chris Henchy-to help launch a website that would feature both established talent and up-and-coming comics and let viewers vote on whether or not videos are funny or should die.

It's the successful marriage of Hollywood and Silicon Valley that has been the key to Funny or Die's success, says COO Mitch Galbraith, one of those startup vets who signed on at the company's launch after he'd sold Insider Pages to IAC. Prior to that, he'd been senior director of business operations at Yahoo!.

"Obviously, making great content and working with celebrities is smack dab in the middle of the Hollywood expertise," says Galbraith. "But the frugal DNA is definitely a very Silicon Valley thing in that, when in doubt, we underspend."

Will Ferrell's "The Landlord"

"The Landlord," featuring Will Ferrell and Adam McKay's daughter and the first
Funny or Die video to go viral, has racked up more than 79 million views to date.

Indeed, after "The Landlord" and its follow-up, "Good Cop, Baby Cop," became internet sensations in 2007, many pundits figured it was just a vanity project for Ferrell and McKay and gave it little chance of lasting, much less growing. But Kvamme quickly signed on other investment partners including DAG Ventures and Tenaya Capital. In the past 2 years, HBO also signed on as an investor; other noninvestor partners include Gary Sanchez Productions, Judd Apatow, and CAA.

The Art
Kvamme's son Michael, an aspiring young comedian, can actually take the responsibility for the original idea of a comedy site that would combine user-generated content and celebrity content, but the concept was soon expanded beyond comedy. "We thought we would take the recipe for Funny or Die, pick a vertical, and marry a relevant celebrity," says Galbraith. The team partnered with skateboarder Tony Hawk for Shred or Die and chef Tom Colicchio for Eat, Drink or Die, but neither site achieved sustainability. And after Sequoia Capital's famous "R.I.P. Good Times" memo in 2008, the team decided to keep the focus on the funny.

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