"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).