Hawking is extrapolating a graph backwards in time. The universe is expanding now so, if you go backwards in time, the universe shrinks down to the size of a single atom or smaller. Before the Big Bang, there's no way to understand the conditions because 1. We weren't there. 2. There's no way to measure the conditions in the minute pre Big Bang universe.
It's almost like Hawking is sitting in the circle from That 70s Show.
"Like, whoa man. There's this universe (cough, cough)... and it runs on time. It's expanding, man. I tell you it's expanding. But before it expanded, it was still there, man. Just really, really small. (cough, cough)"