I really do see where you're coming from, partly because I believed the same when I was in college. I kept looking around and thinking, "There has to be a place where everybody's better than this, right?"

I'll go ahead and put out a few things that I still think might be true about the top schools before I jump into my objections.

The alumni network seems to be good. This does seem to be important. I can't really qualify how much better it is than other places since I didn't go to a well known school, but it does seem to be big, and well, often rich. (Though, strength of the alumni network doesn't seem really to be a linear function of prestige. There are a lot of places out there with freakishly strong alumni networks that aren't that hard to get into. Looking at the school's endowment might be a good place to suss this out.) Location, as others have pointed out, can make a big difference too. And while I don't at all believe that going to Harvard or Stanford is a reliable indicator of intelligence, I suspect that it is a pretty good indicator of people who are able to set hard to reach goals and get them done. The last bit is brand recognition. Harvard and Stanford and similar have that and I suspect "BS in Computer Science from Harvard" sounds better on a VC pitch than, "moderately intelligent charismatic insomniac workaholic with delusions of grandeur", even though the latter would probably be closer to The Right Stuff.

There are smart and motivated people at every decent college. And pretty much everywhere they're in the minority. It's enticing to think when you're at College A that if you'd just gone to College B that it'd be better.

One of the funny statistics from where I went to college was that, at the time that I went there, we had the highest percentage of students that went on to receive PhDs of any college in the country. I say funny because, well, I'm sure you've never heard of where I went to college (now, apparently, according to US News, the 116th ranked liberal arts college). So, a few years after college I had friends were TA-ing at Berkeley, Cornell, MIT and they all said pretty much the same thing -- that the students were almost frustratingly similar to us. It's easy to forget that for every Larry Page there are thousands of Stanford grads that are working at boring jobs just like everybody else.

Community and skills seem about the same. I'm not saying that people aren't better at more prestigious schools. I'm pretty sure they are. But my feeling is that the top 1% where I went are probably about on par with the top 10% from Harvard. And that was still several dozen people and I reckon I knew most of them. In the house I was living in senior year, I was the only one of the five of us that wasn't a national merit scholar. But I'm not sure that matters very much.

My next door neighbor and I are both from Southeast Texas. This is quite a coincidence, because, you see, I live in east Berlin. His startup (smartertours.com) has really taken off in the last year. I'm probably smarter than him, but he's a charismatic insomniac workaholic with delusions of grandeur. Dude's a machine.

Ryan went to University of Texas I think. My other ex-pat friend here, Jeff, runs the cafe down the street where Ryan and I often see each other at lunch. He went to some unknown bible college. Jeff's also managed to do pretty well for himself since he managed to pick a trendy street just before it got trendy. He's also worked his ass off.

Now, I'm not an entrepreneur yet. I couldn't legally start a business here until I got my permanent residence a few weeks ago. But I've done pretty well for myself as a hacker. When I look back at my brilliant college roommates, and compare them to me, Ryan or Jeff, my old roommies were definitely a smarter bunch with a more impressive collection of degrees. They've all got normal jobs now. But Ryan and Jeff seem to have what it takes.

I'm not saying that an aspiring student shouldn't go to Harvard or Stanford. I couldn't have gotten in, personally, but I'm sure they're great places to hit the ground running. I'm just saying don't get hung up on it.