Elon Musk, CEO of Tesla Motors and SpaceX first publicized the idea of a Hyperloop in 2013 in which pods would carry passengers and cargo through tubes at up to 700 miles per hour. The pods would levitate on either air cushions or magnetic fields while they travel though tubes that are kept at low pressure to reduce air resistance.

SpaceX organized the Hyperloop Pod Competition Design Weekend at Texas A&M in College Station to help accelerate development of a functional Hyperloop. A total of 22 student teams, and one non-university team organized through online forum Reddit, advanced through the first phase of the competition and will test their pods this summer on a SpaceX-built Hyperloop test track in Hawthorne, Calif. The field included 115 teams that had been winnowed from more than 1,000 applicants.

Twelve awards were also given to teams that focused on particular subsystems and design concepts.

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After the finalists were named, the crowd got a surprise when Musk himself strolled onto the stage to give an unscheduled pep talk to the jubilant crowd.

“I have a good feeling about this,” he said about the competition. “I think the work you guys are doing is going to blow people’s minds.”

The competition results were based on concept designs, and teams will spend the next six months building their pods at roughly half scale. Musk encouraged the teams to take a hands-on approach.

“You want to do a lot of dry runs with your pod,” he said. “Test it out very thoroughly, as close to the competition conditions as possible.”

Peter Chamberlain, a member of the winning MIT team, acknowledged that the construction and testing phases will be at least as challenging as the initial design. All of the teams will need to raise significant funding to build their pods, and he said his team is already actively looking for sponsors. It’s also considering a crowdfunding campaign.

“Now we have to do a lot of thinking,” echoed Keio University team member David Chew. His team, like a rival team from Delft in the Netherlands, will have the additional challenge of getting its multi-ton pod across an ocean.

Prizes for the teams with the best performance on the test track have not been finalized, but Musk provided new details of exactly how the next phase of the pod challenge will work. “The basic idea of the competition is that we want to get to the highest possible speed,” he said. The test track in Hawthorne will have a large display showing each pod’s speed, for what he anticipates will be a large audience.

“And then, of course, you have to slow down before the end,” continued Musk, laughing. “There’ll be a bit of tension – will it brake in time?”

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Also finishing in the top 22 were teams from Carnegie Mellon University, Japan’s Keio University, Oral Roberts University, and Texas A&M itself. According to judges, between 3 and 10 more teams will also be invited to the finals after further review.

In addition to the student teams, private companies have begun work on various aspects of the Hyperloop project. The most progress has been made by Hyperloop Tech, whose Chief Technology Officer, Brogan BamBrogan, said in an interview at the event that the Hyperloop will be roughly as energy efficient as a conventional train, and much more efficient than high-speed rail or conventional magnetic levitation trains–while moving faster than any of them.

Musk went on to answer questions from the audience for about 20 minutes, in what has become his signature style – relaxed, forthright, and slightly awkward. He reiterated his desire to colonize Mars, and expressed some surprise that the Hyperloop concept has sparked such fascination, including from hundreds of members of the public who came to the event from as far as Dallas. He also gave a glimpse of what could be his next big idea.

“I’ve been thinking about the vertical takeoff and landing electric jet a bit more,” Musk said. “I think I have something that might be close.”

“I’m quite tempted to do something about it.”