Elon Musk planned on studying material science at Stanford, Walter Isaacson explains (in his biography of Elon), after getting his physics degree from Penn:
Still fascinated by capacitors, he wanted to research how they might power electric cars. “The idea was to leverage advanced chip-making equipment to make a solid state ultracapacitor with enough energy density to give a car long range,” he says. But as he got closer to enrolling, he began to worry. “I figured I could spend several years at Stanford, get a PhD, and my conclusion on capacitors would be that they aren’t feasible,” he says. “Most PhDs are irrelevant. The number that actually move the needle is almost none.”
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“I thought about the things that will truly affect humanity,” he says. “I came up with three: the internet, sustainable energy, and space travel.”
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Musk had come up with an idea for an internet company during his final year at Penn, when an executive from NYNEX came to speak about the phone company’s plans to launch an online version of the Yellow Pages. Dubbed “Big Yellow,” it would have interactive features so that users could tailor the information to their personal needs, the executive said. Musk thought (correctly, as it turned out) that NYNEX had no clue how to make it truly interactive. “Why don’t we do it ourselves?” he suggested to Kimbal, and he began writing code that could combine business listings with map data. They dubbed it the Virtual City Navigator.
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Nicholson, who had a PhD from Stanford, did not equivocate. “The internet revolution only comes once in a lifetime, so strike while the iron is hot,” he told Musk as they walked along the shore of Lake Ontario. “You will have lots of time to go to graduate school later if you’re still interested.” When Musk got back to Palo Alto, he told Ren he had made up his mind. “I need to put everything else on hold,” he said. “I need to catch the internet wave.”
He actually hedged his bets. He officially enrolled at Stanford and then immediately requested a deferral. “I’ve written some software with the first internet maps and Yellow Pages directory,” he told Bill Nix, the material science professor. “I will probably fail, and if so I would like to come back.” Nix said it would not be a problem for Musk to defer his studies, but he predicted that he would never come back.
On one hand you don’t need many brilliant PhDs, but on the other hand the supply of brilliant minds is also extremely limited. And while the university system is a very inefficient system for taking lots of bright young minds and filter out/train the brilliant ones, the huge advantage for companies looking to recruit those is that money and time swallowed by the university system does not have to be fronted by them.
Of course, creating an organization and culture that allows those brilliant minds to thrive and be productive is a separate challenge by itself.