Ouch. How wrong they were, we think.
But were they?
Common publishing practice recommends querying agents and editors by sending a 250-word letter introducing the novel (like back cover copy--the intent is to entice, not to give away the ending) and the first chapter. I have no idea what Rowling's query letter looked like. Writing engaging query letters is a different skill from writing good novels.
The world Rowling built in the Harry Potter books is wonderful, amazing, magical. That's really hard to demonstrate in 250 words. And that first chapter . . .
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My eldest daughter is 14 years old. She has Down syndrome and isn't an especially strong reader. As we're heading to the Wizarding World of Harry Potter later this summer, Ellie is reading Harry Potter and the Sorcerer's Stone aloud to me. This is a laborious process for both of us. We stop after every paragraph to discuss and make sure she's "getting" it.
I've read Chapter One at least four times before, but never like this. And I've gotta be honest--it breaks all the rules. It's sloooooooow. It's really more of a prologue than a first chapter. We start with a not-very-interesting minor character (Vernon Dursley) and follow him through an entire day. I get why Rowling starts this way. She's introducing the world of magic through the eyes of someone very much outside that world.
For a fast reader, someone already invested in the story, or someone willing to give a book longer than one chapter to get interesting, this works great. But let's be honest. Harry Potter and the Sorcerer's Stone really picks up in Diagon Alley. That's Chapter 5.
So if publishers were wrong to reject Harry Potter (and financially, obviously, they were) it's perhaps because of the early decision model as much as any individual business decision. It's a tricky thing to allow for a potential break-out success that breaks the rules.
