It's a question of how important market segmentation is today given all the powerful distribution channels that exist.
Think big. Start small.
You should always think of the bigger picture (i.e. Facebook for everyone in the world), because you want to make sure that you enable yourself to grow towards that point. Using Steve Jobs' analogy, it's about anticipating where the dots will be. Or as Wayne Gretzky puts it: skate to where you expect the puck will be, not where it is at the moment. Having this bigger vision in mind, will help you move forward.
That said, always start small. If you can make your product or service valuable for a small group of people (that are also representative of a bigger population), you can definitely figure out ways to reach those people. The initial challenge though is to make those first 10 / 100 / 1000 people really use your product or service (and preferably pay for it).
IMHO more often start ups fail because they haven't built something useful for even a small segment of people. So design for one person first, then one college, then scale.
Facebook today = Instagram.
Regardless of the constrained market (Colleges, Mobile, Format Type (Ex: Video) you focus on, you need to have it and create a great social experience.
The truth is, the only thing that will disrupt Facebook will either be a Photo or Messaging product, more likely photos (since their language is universal)
So maybe not colleges, but maybe photo site w/ a focus (ex: Pinterest), or format (ex: Vine, Cinemagram).