Singapore’s virus-hit economic slump is even worse than many feared, with new figures this morning confirming an historically massive 12.6% drop in gross domestic product (GDP).

Economists knew it’d be rough, but they were predicting a not-quite-so-bad 10.5% contraction, reports Reuters today.

The downturn comes after a strict Singapore lockdown—aka: “circuit breaker”—for seven weeks in April and June that has flattened the Covid curve, allowing workplaces and schools to reopen in phases.

How startups can still thrive

Well-known tech entrepreneur and investor Paul Graham reckons that a good time to begin a company is during a bad economy. Here’s a summary, condensed from The Startup, of why that’s the case:

• History shows that a bad economy can give birth to long-lasting companies, such as Airbnb, Slack, Uber, Glassdoor, and Square
• There may be less competition within your product segment during a downturn
• New, lean companies can survive on fewer resources than existing firms
• Customers, whether consumers or enterprises, are more open to alternatives where they can save on costs or earn new forms of revenue
• Marketing is cheaper. Plus, as existing firms cut back drastically on advertising, there’s less overall noise for you to compete against
• Less competition for talent. And, it may be a chance to cherry-pick talent where people have been hit by layoffs
• Funding is still available. And now that some movement restrictions have been scrapped, you can actually meet VCs face-to-face if they’re in the same country
• For investors, the focus is still on the quality of the founder and her/his core team and product

See: 💸 Here’s a handy list of Southeast Asia’s newest VC funds