An early version of Puppets rejected by publisher

A while ago, I decided to try my luck and submit a novella to Naked Reader Press.  It's a reputable epublisher that doesn't shy away from shorter works such as novellas and the like, plus has Dave Freer's stuff.  This morning, I got the following response:

Thank you for your submission. Unfortunately, at this time we are unable to offer you a contract. While our editorial board enjoyed your novella, it doesn't meet what we are looking for at this time. Good luck finding the right home for it.

This has been my first submission in two years, and am actually happy with it.

Does this mean I'm not going to go the way of an independent writer?  It means that the skills are there, and I need to have a good think about it.

Now back onto the drawing board.