He makes a point of all of these companies having been ugly at the outset. I don't disagree, they were, however the landscape has changed. In the past, when the world was really still figuring out what the web is, it was okay to be ugly -- because so much of the web actually was ugly. Now, however, there is a lot of beautiful design on the web and people are having higher and higher expectations.
Its a lot about signaling, I think. People want to know that they aren't wasting their time. If a website is ugly and poorly designed, then its easy to think "Whoever made this didn't put a lot of effort into it, and may continue to not put effort into it." In the old days of the web, just being on the web was signal enough that you put a fair amount of effort into your project. Now, we have more sophisticated methods of signaling that our websites are better than others. However, its a bit like clothing and jewelry in that it can be superficial -- just because something is dressed up and pretty on the outside doesn't always mean theres something worthwhile underneath.
Humorously, the Github repo title of my product contains the very words "Humble Beginnings". We're launching this week, right Justin? ;)
I think you're overestimating how much the average person really pays to design. Having worked in online advertising for a long time, I have seen some seriously hideous sites convert far better than well manicured ones. For an example of one of the ugliest, highly successful sites on the internet, one need look no further than GoDaddy. That site looks like it was made in the dark. People don't really care.
"a website is ugly and poorly designed, then its easy to think "Whoever made this didn't put a lot of effort into it, and may continue to not put effort into it."
Useful will still trump pretty, 9 times out of 10. Especially for a down-and-dirty, early-stage site or service. Think about CraigsList: the site looks like it could conceivably have existed on text-based interfaces in the early 1980s. And that simplicity is part of its ease of use.
I'm not suggesting good design doesn't matter. But pretty, for pretty's sake, is overrated. The primary goal of design is to entice people to use something, and to make using it as easy and rewarding as possible. Often, this means making something as minimalist as possible. Depending on your targeted early adopters, they may be willing to overlook an ugly site if they derive a lot of value from using it.
In a weird way, I almost have the opposite gut reaction to yours when I encounter an early-stage service. If it's too slick and professional looking, I start wondering where the dollars are being spent, and where the priorities are. Especially if the startup is pre-funded or bootstrapped. Champagne tastes on beer budgets are often harbingers of doom.
As a corollary, I will say that people seem a lot more forgiving of ugliness if the service is very novel. The more new-to-the-world your product or service is, the more people will put up with its warts and irregularities (at least in the beginning). Conversely, if your product is attemting to outcompete an established competitor, design becomes a fairly big priority: not graphic design, per se, so much as UX design (think: the simplicity of Google vs. the complexity of Yahoo).
The landscape in total may have changed, but in my opinion, it seems the theme of success stories hasn't changed that much... Groupon had humble beginnings, chatroullette was completely lacking in design, and reddit is seeing it's heyday as we speak. Their perceived lack of design didn't seem to preclude them from incredible/almost unparalleled growth (and all were in the last two years).
On the contrary i see websites that try hard to be "beautiful" looking more and more like each other (thank you bootstrap), as if one company that loves rounded rectangles now controls the design of everything (thank you apple). Beauty is in the eye of the beholder, not the designer's.
keep in mind the state of internet speed at the time back then too. Its easy to look nice when you dont have to worry about it taking 30 minutes to render a page on a 2400 baud modem.
Also the tools are so much easier. I remember setting up wordpress about 6 years ago and compared to today it is so much easier to set up and also so much easier and cheaper to make it look nice too!
Its a lot about signaling, I think. People want to know that they aren't wasting their time. If a website is ugly and poorly designed, then its easy to think "Whoever made this didn't put a lot of effort into it, and may continue to not put effort into it." In the old days of the web, just being on the web was signal enough that you put a fair amount of effort into your project. Now, we have more sophisticated methods of signaling that our websites are better than others. However, its a bit like clothing and jewelry in that it can be superficial -- just because something is dressed up and pretty on the outside doesn't always mean theres something worthwhile underneath.
Humorously, the Github repo title of my product contains the very words "Humble Beginnings". We're launching this week, right Justin? ;)