(FORTUNE Small Business) – For them, office hours are based on weather conditions. Seed-round funding comes from the money they've earned promoting other companies. More often than not, they conduct business not from behind a desk but via cell phone from such out-of-bounds areas as canyons, beaches, or deep inside a skating-park warehouse.

Who are these guys? They're extreme athletes--skateboarders, bikers, surfers, and snowboarders--who have started small companies out of frustration over what they say is inadequate equipment made by companies whose CEOs often have never participated in the sport. That's why skateboard champ Tony Hawk founded Birdhouse Projects in 1992--he wanted a better board. "Big companies like Powell Skateboards lost their steam as innovators," he says, explaining why he set out to create a company focused on the good of his sport and how he ended up pioneering a wave of like-minded athletes turned entrepreneurs.

Don't expect them to talk about revenues. Instead they concentrate on leveraging their friendships and endorsing each other's brands. They advertise their products by wearing them, riding them, or selling them at competitions. But even having a few major event titles behind their names doesn't guarantee success. "Surfing is a hard business to be profitable in," says former pro Xanadu, who started his board-shaping business a decade ago and today crafts boards for touring surfers. Turning hobbies into professions is as dazzling a trick as they've tried.

WILLY SANTOS, 25, has always dreamed of owning a skateboard shop. In July the professional skater finally had the money to open a small store, Willy's Workshop, in his native San Diego. He stocks his shelves with big-name brands (Vans shoes, Birdhouse skateboards) and attracts locals by hosting poster signings that feature fellow Birdhouse skaters Tony Hawk and Bucky Lasek. But he credits the shop's success to his unique marketing ploy: Buy a skateboard, get a haircut. "It works both ways," says Santos. "Parents come in and get cuts while their kids wait, and then after they pick out a board, the kid gets one." His fiancee, Shalihe Cabiling, who oversees things while Santos is touring, says business is steady. Next move: amateur competitions in the store's parking lot.

SHAUN PALMER, 32, spent a decade winning first-place snowboarding titles. The only problem he had with this, he says, is that he was promoting someone else's snowboard company: "The relationship got stale, and I wanted my own company to set myself up for the future." With help from private investors, Palmer started Minneapolis-based Palmer Snowboards in 1995 with fellow snowboarder Jurg Kunz. Today, Palmer designs and tests technologies to make his titanium-riddled boards (which are sold in Europe, Canada, and the U.S.) lighter, faster, and more responsive to riders. The best way to promote his company's product to the masses? He plans to make the 2002 U.S. Olympic snowboarding team and cross the finish line--first--on a board of his own design. "I'll go out and win everything to show the world a great product," Palmer says.

TODAY, TONY HAWK'S Huntington Beach, Calif., Birdhouse Projects is a $10 million-a-year skateboarding company that sponsors some of the best athletes around. But eight years ago, when Hawk first launched Birdhouse during a sharp downturn in the sport's popularity, his team had to sleep seven to a hotel room when on tour, and Hawk relied on freelance video editing to earn money to feed them all. But the venture wasn't about money. It was solely about making a deck and wheels capable of turning skateboard tricks as fast as the X Games champion could invent them. "We just wanted to focus on good skating and turning out good products," Hawk says. Success--which now includes his own popular Nintendo game--was secondary to Hawk, who remains the humble inspiration for many of today's athletes who want to start their own companies.

THE HARDEST part of running a skateboard company is manufacturing the boards, especially if you're doing it out of your living room. This is what pro skater Chris Gentry, age 26, and his wife, Ricca, 30, found after starting up Costa Mesa, Calif., Kingdom Skateboards Inc. in 1996. All profits, as well as Chris' sponsorships earnings, went into making the 36,000 boards the couple sold annually. Left dry by their first outsourcing deal, in January 2000, the couple cut back on production and sponsorships while recovering. Now ready for another manufacturing deal, Kingdom also has a new marketing channel: the hip-hop music industry. Chris, also a rapper, is cutting an album and has deals to make boards for stars like Dr. Dre. He plans to release a new board design every six months.

DISENCHANTED IN the 1980s with bikes they felt were made for mass appeal by fly-by-night promoters, pro BMX bikers Mat Hoffman (left) and Steve Swope started to design their own bikes in 1992 to perform better in unconventional environments (vertical ramps, mud, and moguls). Today, Oklahoma City-based Hoffman Bikes employs 25 people and sells 30,000 bikes a year ($230-$800 each). "I'm a consumer as well, and I have a strong motivation to make these bikes good," says Hoffman, 28. Hoffman Bikes--one of the few small companies competing with big guys like Mongoose and Schwinn--has found its niche with a cultlike following that Hoffman credits to his company's focus on what's good for the sport. "I don't think about what the competition is doing," he says. "I just try to satisfy myself as an athlete."