Before Howard Hughes Jr. was flying airplanes and making movies, his father Howard Hughes Sr. was revolutionizing the drill bit market. Though his father was a judge, Hughes Sr. dropped out of Harvard and the University of Iowa College of Law. Instead, Hughes became an entrepreneur with many failed endeavors before he stuck on a winning concept.
On August 10, 1909 Hughes was granted a patent for the Sharp-Hughes Rock Bit, better known as the “rock eater”. The two-cone rotary drill bit design could drill through medium and hard rock ten times the the speed of its contemporaries—revolutionizing the oil industry. While several other businesses had produced similar bits before, Hughes’ legal experience gave him the insight to patent his bit.
In 1909, Hughes also founded the Sharp-Hughes Tool Company with his business partner Walter Benona Sharp. By 1918, he had full ownership of the company and renamed it Hughes Tool Company. No one else ever owned a Hughes bit, they were leased from from Hughes Tool Company. Licensing fees were the core revenue of the Hughes Tool Company.
When Hughes Sr. died of a heart attack in 1924, he passed majority ownership to his 18 year old son, Howard Hughes Jr. This became the financial spring board that Hughes Jr. rocketed into his film and aviation empire.