Why does Elon Musk believe that 'the starting point for entrepreneurship is not market size, but physical constraints'?

Think of it this way: most people starting a business first look at "what sells well." For example, seeing the huge milk tea market, worth hundreds of billions a year, they think, "I'll make milk tea too, and try to get a small slice of that pie." This is "market size thinking." You're playing a game within existing, predefined rules, and your goal is to do slightly better than others—perhaps better taste, prettier packaging, or lower prices. This is a "better" competition.

But Elon Musk doesn't operate that way. He directly disregards existing markets and products and asks the most fundamental questions, down to the laws of physics. This is "physical constraints thinking."

For instance, let's say we want to solve the transportation problem "from Beijing to Shanghai."

• Market Size Thinking: You'd look at the current market: planes, high-speed trains, cars. "Oh, the aviation market is the biggest, so let's start an airline, offering more comfortable service and more punctual flights." Or, "High-speed train tickets are hard to get, so let's make better ticket-grabbing software." You're optimizing within the existing "plane/high-speed train" framework.

• Physical Constraints Thinking (How Musk would think): He would ask: "What's the fastest, most energy-efficient way to move an object (a person) from point A to point B? What are the physical limitations?" He would calculate air resistance and the limits of energy consumption. Then he might think: "If you move in a near-vacuum tube, wouldn't that eliminate air resistance and achieve extremely high speeds and low energy consumption?" — Thus, the concept of Hyperloop was born.

You see, he wasn't trying to make a "better" plane, but to create a completely new, disruptive mode of transportation based on physical principles.

Take rocket manufacturing as another example:

• Others look at the market: "Launching satellites is so expensive, hundreds of millions of dollars per launch. The market is only so big, with only a few countries and companies as clients. If we can reduce costs by 10%, we can win contracts."
• Musk looks at the physics: "What's the raw material cost of a rocket? Aluminum, fuel, electronic components... it accounts for less than 2% of the total cost. So why is it so expensive? Because rockets are thrown away after one use! Physics doesn't dictate that rockets must be consumables; planes can be reused. Therefore, the biggest problem isn't how to make rockets cheaper, but how to recover them and make them reusable." Once the physical challenge of "vertical landing and recovery" is solved, costs can drop to one-tenth or even less.

So, Musk's logic is:

Don't let existing products and markets limit your imagination. They are merely "accidental solutions" under historical and current technological constraints, likely very inefficient ones. You should start directly from the most fundamental scientific principles, see what the theoretical optimal solution looks like, and then figure out how to implement it with engineering technology.

By doing this, you're no longer fighting for a slice of the pie; you're creating an entirely new, much larger pie. Your competitor is no longer other milk tea shops, but "thirst" itself. Your goal isn't to make a "better" product, but to make a product that is "fundamentally different," making the old things look like antiques.