We study the kinetic pathways for the isotropic-to-nematic transition in a fluid of colloidal hard rods. In order to follow the formation of the nematic phase, we develop a new cluster criterion that distinguishes nematic clusters from the isotropic phase. Applying this criterion in Monte Carlo simulations, we find spinodal decomposition as well as nucleation and growth depending on the supersaturation. We determine the height of the nucleation barrier and we study the shape and structure of the cluster. More specifically, we find ellipsoidal nematic clusters with an aspect ratio of about 1.7 and a homogeneous nematic director field. Our results are consistent with theoretical predictions on the shape and director field of nematic tactoids. Classical nucleation theory gives reasonable predictions for the height of the nucleation barrier and the critical nucleus size.