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As a client I would have chosen "A good idea with a bad design" as I feel that if the foundation is good eventually everything will fall in place. The main focus is to be in the right direction, with more refinements and fine touches, the design is bound to be better in long course.
Beauty lies in the eyes of the beholder!
What any client would want is AN IDEA and no matter how bad the design is, a smart idea is what I'd go for.
I good idea is prime. A bad design could be fixed . But a good design that is purposeless is a waste. I would take the risk of a bad design for a profitable idea.
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