San Francisco, Nayarit, Mexico — In an old warehouse in a tiny town on Mexico's Pacific coast, Cirque du Soleil co-founder Gilles Ste-Croix is holding tightly scheduled rehearsals before the launch of his latest production. Like Cirque's shows in Las Vegas, it features skillful acrobats, daring trapeze artists, stilt walkers and jugglers. The difference? All of the performers are local children.

"When I see a kid who can walk on stilts the first time, the smile on his face is incredible," says Ste-Croix, 65, who retired from Cirque du Soleil last year. "I wish this had happened to me when I was 8 years old."

Ste-Croix, who has a house in San Francisco — a Bohemian beach town known locally as San Pancho — raided Cirque du Soleil's warehouses for old rigging and costumes for his Circo de los Niños. He badgered friends for professional lighting and projection gear. And he spends $50,000 (USD) a year on the project.

The circus school started four years ago when 40 children signed up for the first show. It now has a permanent home in the renovated Bodega Circo warehouse where more than 70 children aged 8 to 17 learn acrobatics, juggling and trapeze. "The children are learning what is theatre. If they're going to juggle alone in the backyard, it's very different to going on stage, doing it in front of people," says Ste-Croix.

Stilts and tentacles

At the warehouse, the doors are painted in red and yellow big top stripes. Inside, dozens of children with painted faces wiggle into leotards or edge along a low-hung tightrope backstage before the first performance. Families line up outside under mango trees for the best seats.

A clown serenades them on an accordion as children on stilts stalk the yard in pink costumes sprouting tentacles. A comedy duo featuring a woman in a Flamenco dress and a man with a rapper's heavy gold chains entertains the crowd.

People are still squeezing along rows of chairs inside as the show opens to a man beating a bass drum behind a screen projected with flames. A young girl in a green feathered costume climbs and spins on a thick rope topped with a huge rose.

The audience whoops and cheers through the acts, which includes boys back flipping and girls creating silhouettes on the trapeze or in synchronized aerial hoop routines. Seven people balance on a bicycle to circumnavigate the stage before the grand finale involving the whole cast.

"Hell yeah, I was nervous," said Nicte, 14, who balanced on the tightrope and bicycle in the show. "You get used to doing shows but you still get those nerves when you're going to go on stage and that crowd is out there. It's incredible, it's actually addictive."

Many, like 10-year-old Natalia who performed the opening and closing rope act, have their hearts set on circus careers.

"It was so exciting but before the show I had butterflies in my stomach I was so nervous," she said. "I want to be in Cirque du Soleil, doing acrobatics or maybe trapeze. I just want to be there."

Ste-Croix, who founded Cirque du Soleil with Guy Laliberté in 1984, says a handful of the children have the drive and talent to eventually join a major circus school, if they push themselves. "When I was 12, I wanted my father to give me the money to buy a bass guitar as I wanted to be Paul McCartney, and he never gave it to me. He said, 'You're going to go and play in the pubs, it's not the life I want for you,' " says Ste-Croix.

Meet the Beatles

It wasn't until he was in his 30s, after abandoning a career as an architect and a job in theatre, that he started the Quebec street performance group that eventually morphed into Cirque du Soleil.

Now a huge business currently running 18 productions, it generated close to $1 billion (US) in revenues last year. Cirque's first theme park is in the pipeline for Puerto Vallarta, an hour south of San Pancho.

Helping create The Beatles LOVE show for Cirque, Ste-Croix says, was the pinnacle of his career. He worked with legendary producer George Martin at London's Abbey Road Studios — and met McCartney.

"Of course I told him (about his childhood fixation), and McCartney said, 'How many kids wanted to be me?' We became good friends after that," recounts Ste-Croix. "After that show, I said, 'What am I going to do next?' I'd done the thing I wanted to do in life."

How would his life have been different had his dad bought him a guitar?

"I'd probably be a bum!"