MQ Holdings, LLC

An Open Letter

2019 Founders’ Letter

Introduction

In Google’s 2004 Founders’ IPO Letter, Sergey Brin and Larry Page said, “Google is not a conventional company. We do not intend to become one.” I will use the same opening statement in our first opening letter. MQ Holdings is not conventional company. We do not intend to become one. My entrepreneurial evolution revolves around clarity, discipline, and consistency. This has always reinvigorated my entrepreneurial spirit despite my daytime job.

Now the time has come to shed all fear of failure and stop using the desire of financial safety as an excuse to take the greatest risk an entrepreneur can take: start their own business. This change will bring important benefits to our founders, our present and future clients, and our community. We want to clearly explain our plans and the reasoning and values behind them. By reading this letter, we are delighted that you are considering supporting our company vision and values.

Luis, Jose, and I intend to write you a letter like this one every year. We’ll take turns writing the letter so you’ll hear directly from each of us. We ask that you read this letter in conjunction with any other corporate documents we share.

Our commitment to leadership

Luis, Jose, and I believe in the responsibility of leadership. Being a leader at home and at work is at the heart of what we do and will always be our number one priority.

Our goal is to use our subsidiaries to improve the lives of as many people as possible. In pursuing this goal, we may do things that we believe have a positive impact on the world, even if the near-term financial returns are not obvious. Real estate is our primary source of revenue, and the properties we purchase or sell are useful to our main goal. We strive to have a positive economic impact with every purchase or sale.

The infinite game

As a private company, we concentrate on playing the infinite game. We want to be better today than we were yesterday. We find joy in our advancement.

Usually we expect projects to have some realized benefit or progress within a year or two. But, we are trying to look forward as far as we can. Despite the quickly changing business landscape, we try to look at three to five-year scenarios in order to decide what to do now. We try to optimize total benefit over these multi-year scenarios. While we are strong advocates of this strategy, it is difficult to make good multi-year predictions.

MQ Holdings is initially funded by the contributions of its founders. This does not give us a lot of flexibility, but it allows us to be more selective with our expenses and analyze the true value of resources, tools, and services that will allow us to conduct our day-to-day business. Our commitment is to execute quickly to achieve long-term value.

The infinite game does have risks. Markets may have trouble evaluating long-term value, thus possibly reducing the value of our subsidiaries. Competitors may be rewarded for short-term tactics and grow stronger as a result. We understand the risks around our long-term focus. We will make business decisions with the long-term welfare of our company and clients in mind and not based on accounting considerations.

Risk vs reward in the long run

The business environment changes rapidly and needs long term investment. We will not hesitate to place major bets on promising new opportunities.

We will not shy away from high-risk, high-reward projects because of short term earnings pressure. Because we recognize the pursuit of such projects as the key to our long-term success, we will continue to seek them out. For example, we would fund projects that have a 10% chance of earning a billion dollars over the long term. Do not be surprised if we place smaller bets in areas that seem very speculative or even strange. We will accept projects further outside our current businesses, especially when the initial investment is small relative to the level of investment in our current businesses.

We encourage our subsidiaries, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit their specialty This empowers them to be more creative and innovative. Many of our significant advances may happen in this manner. Most risky projects fizzle, often teaching us something. Others succeed and become attractive businesses.

Leadership roles

Our structure is decentralized. Luis, Jose, and I have known each other for over 14 years. The three of us lead the company collaboratively with me as the Chief Executive Officer.

To make timely decisions, Luis, Jose, and I speak often to update each other on the business and to focus our collaborative thinking on the most important and immediate issues. Decisions are often made by one of us, with the others being briefed later. This works because we have tremendous trust and respect for each other and we generally think alike. Because of our long-term friendship, we often predict differences of opinion among the three of us. We know that when we disagree, the correct decision is far from obvious. For important decisions, we discuss the issue with mentors or a team appropriate to the task. Differences are resolved through discussion and analysis. Luis, Jose and I run the company without any significant internal conflict, but with healthy debate. As different topics come up, we often delegate decision-making responsibility to one of us.

We hired Jose as a more experienced complement to Luis and I to help us lead the business. Jose is the Founder of AFA Soccer. The shared judgments and extra energy available from all three of us will significantly benefit MQ.

All three of us devote considerable time to the overall leadership of the company and our subsidiaries. We are extremely fortunate to also have a cohort of mentors that support us in areas that we may not be able to immediately cover. They deserve all the credit for developing us to be the kinds of leaders we are today.

Summary and conclusion

MQ is not a conventional company. Luis, Jose and I intend to lead MQ with strong values. We will optimize for the infinite game. We will support selected high-risk, high-reward projects and manage our portfolio of subsidiaries. We will lead the company collaboratively as a team of three. We will give opportunity and encourage freedom for ourselves, our family, and our subsidiaries.

In this letter is our company’s spirit. We have discussed our commitment to the infinite game. We look forward to a long and hopefully prosperous experience. I wrote this letter to help you understand MQ.

We have a strong commitment to ourselves, each other, and our vision. Luis, Jose, and I will do our best to make MQ a long-term success and the world a better place.