How Blue Man Group learned to see green

October 2, 2012, 10:27 AM UTC

When the founders of Blue Man Group decided to get bald and blue, they had no idea that shooting goo out of their chests and teaching fractal geometry would turn into two decades of fun and a multimillion-dollar show business enterprise. Today an average of 60,000 people a week attend Blue Man Group performances in six cities around the world — not including the touring shows — at an average ticket price of $59, or roughly $3.54 million in revenue a week from sellouts. Co-founders Matt Goldman, 51, Phil Stanton, 52, and Chris Wink, 51, continue to write and produce the shows, perform for special events — and have no thoughts of retiring. Their story:

Phil Stanton: I moved to New York in 1986 to study acting and pursue a career in theater. Chris was the first person I met on my first catering job. Matt and Chris had known each other since they were kids.

Matt Goldman: After college, I was a producer for Omni Resources, a software company. It was a time when punk rockers would walk by Wall Street guys in Armani suits, and neither would blink.

Stanton: We’d hold salons on Sundays with friends and started going to see performance art in town. We started to think of a show we’d like to see, and Chris came up with the idea of a bald and blue character.

Chris Wink: We were trying to create a character that was exposed and stripped down. We think of the Blue Man as being both a hero and an innocent, and baldness helps evoke both. The color blue just felt right.

Goldman: It was 1987 when we got bald and blue for the first time. We went up on the roof of our apartment to take pictures. The bald caps were $30 each, and we were freaking out about how expensive it was. We were all eating rice and beans. But we felt we had stumbled upon something very special that was bigger than us.

Stanton: We felt the ’80s was a boring decade known for greed and excess, and thought it’d be fun to represent our first statement in 1988 as the “Funeral for the ’80s.” It was a ragtag event of several people in Central Park. We did a bonfire and got rid of icons like a Rambo doll.

Goldman: By 1989, somehow the group was just the three of us. We got on the roster with P.S. 122, a performance space, and they’d send us out to different cities.

Wink: We would work 14-hour days, then take off a week and build a show. We did all the work ourselves. There was no crew.

Stanton: Matt’s software salary helped, and Chris and I put in money from catering.

Goldman: At first, everything we did was a losing proposition. People were paying $8 a ticket to see us, but it was costing us $28 a head. The joke became, Let’s just hand these people $20 as they come in.

Wink: Before long, the show led to an extended run at LaMaMa [Experimental Theatre] and won an Obie Award. Before we knew it, we were at the Astor Place Theatre.

Stanton: In 1991, when we opened at the Astor, we had two producers who put up the show. They handled the rights for three years. We wanted to control our own destiny.

Goldman: We started Blue Man Productions in 1993 and started making crazy new instruments. When Phil cut his thumb on a power tool, our backup Blue Man had to make an emergency appearance on stage. For the first time, we had evidence that other people could play the Blue Man character, which had never occurred to us before. Until then, we had done 1,285 consecutive shows between November 1991 and October 1994.

Stanton: When we started to teach other people how to do the character, it was really difficult. It was so personal, because I felt like I was the Blue Man. Passing that on was hard, but it was joyous at the same time because we knew the show had to go on. We have written materials and a process for training now.

Wink: We didn’t know it was a business back then. We were just pursuing what we were passionate about.

Goldman: With all we were doing, we needed a second show’s worth of income to fuel it. So in 1995 we chose Boston for the next show because it was the shortest shuttle ride to another city. When we opened Boston, we weren’t there all the time. A lot of people didn’t read music, so we created a music template. We had to write an employee handbook because we were trying to create an organization where people treated each other with a bit more consideration than other offices. After Boston, it took on a life of its own.

Stanton: There were times we felt we were failing as a community on the way to becoming a company. One time we flew everyone to a show opening, and the next time, we couldn’t do it. We wondered — did we set up an expectation that we were no longer able to bring everyone along with us?

Goldman: Everything was a challenge. We thought if we had a third show, a three-legged stool would be the steadiest of all structures, so we opened Chicago in 1997. We found out the week before we were going to open that we would have run out of money and missed payroll. So instead of opening as planned, we opened the show a week early and started selling tickets for dress rehearsals, added shows, and made payroll.

Stanton: We have associate directors, who were among the first Blue Men after us, who do the bulk of the training. Performers aren’t hired and cast until they go through a six-week program. We start with music and character work, and they have to learn different things for the show. The Blue Man character involves different modalities, like the Hero, the Group Member, the Scientist, and the Shaman. We have them occupy those modalities, and do improv, as well.

Goldman: Over the years we’ve diversified with shows all over the country and the world. We made an arena rock show, put out a few albums, and got into writing music for movie scores.

Stanton: Quality control is ongoing. The associate directors visit each show three times a year and have weekly contact with Blue Man captains in each city. They watch the shows and do workshops with the guys, but performers have to find their own Blue Man. All the shows are a little different. Matt, Chris, and I go around and see the shows, but not as often. When a show opens for the first time, the three of us go out. For example, for the Las Vegas show [opening Nov. 14] at the Monte Carlo, we’ll be there for six weeks to tweak things.

For the most part, the three of us now concentrate on dealing with the business, working on new material, and growing the business. Chris and I don’t have our own offices. We work out of a conference room. Matt has an office at the Blue School.

Wink: We have more than 140 students in the Blue School, a not-for-profit school that we started.

Goldman: We’ve put creativity, social-emotional learning, and choice-based learning into every aspect of every subject taught.

Stanton: We’re a brand that has to diversify to get to the next level. We’re looking to expand the theatrical business and go into other media. We’re interested in creating a company that will go on after we’re no longer on the earth. We’re trying to find people in other disciplines who can understand our aesthetic. I suppose expanding our creative bandwidth is the beginning of a succession plan.

Goldman: We didn’t want to be celebrities. We wanted to say something, almost as cultural sociologists.

Wink: We constantly change the show with the times. I really like trying to find the kernel of where our next piece will be. There’s a sense that, even though we do silly things, there’s wisdom in the fool. We still feel like young kids coming to work every day, and the spirit of the project has made us better people.

Our advice

Goldman: Know your strengths — and weaknesses. Assess the risk, and bite off what you can chew. No one person has to have all the skill sets, but you have to hire people who have them. It’s about collaboration, quiet leadership, and having fun.

Stanton: Keep talking. We’ve always believed in consensus, so if there’s a disagreement, we talk it out until we come to an agreement.

Wink: Work together. If you can be a good collaborator, it’s like having a superpower because you can connect your gifts with that of someone else. The point is to get the work done and not look out for your own celebrity or money. I stopped trying to have my own career, found some friends, and worked with them.

This story is from the October 8, 2012 issue of Fortune.