The Genius Strategy of Howard Hughes in the Oil Boom

Howard Hughes devised a revolutionary strategy during the oil boom by creating a monopoly on drill bits essential for accessing oil fields. Instead of selling these bits outright, he innovatively opted to lease them on a monthly basis while providing free sharpening and maintenance. This model allowed each drill bit to recoup its costs within a few months, generating profit with each subsequent month. This approach parallels the modern software-as-a-service (SaaS) model, where businesses maintain control over the product, ensuring regular updates and improvements while charging customers a recurring fee. Hughes's strategy not only highlighted his business acumen but also laid the groundwork for a transformative service-based approach in various industries.