Here are some thoughts on how to deal with rejection:

Rely on your motivation
Accept self-doubt and fear and keep writing and submitting
Be stubborn
Look at rejection from the publisher's point of view
Find a long-term balance between writing, family, and friends

A few things first. I can see you've chosen your beta readers well (not friends and family) and if you think their criticism is sincere (usually mixed with some things they didn't like, they thought could be better, etc) you have all external confirmation you need.

You've stated that you can't stop writing, so the solution to your problem—stop writing—is also something I'm not going to suggest. I think most successful authors share that can't-stop-writing-bug. I'm beginning to think it's a requirement...

Motivation

I think motivation is paramount.

If you know why you're writing and that it is important, you have a solid ground to stand on.

You want your books to be read, I'm assuming because you have something you need to say, perhaps something you think is important for people to hear.

In my opinion, that's all the motivation you need!

Accept self-doubt and fear and keep writing and submitting

You're probably always going to feel self-doubt and fear. One might even argue that it sharpens your skills.

When I was younger I used to play theater. All times before I went on stage, except for one, I was extremely nervous. That one time, when I was calm I got on stage, suddenly realizing where I was, and that I had to start acting, and that I was totally unprepared. The first moment was horrifying, and I am pretty sure at least the first act was somewhere between also-ran and discomforting in a bad way...

My nervousness, however painful, had kept me sharp and focused.

Fighting my nervousness by trying to ignore it and distract myself from it, resulted in me not being prepared to go on stage. My "solution" to the problem tripped me up.

What I learned was to get on that stage and act, while being nervous... because guess what?

What goes on inside your head does not have to impact what happens outside of it if you can keep going while it goes on.

In your case that means, having self-doubt and fear that your work isn't going to be good enough while writing and submitting stories for publication.

Self-doubt and fear do not automatically exclude getting published. They aren't even necessarily a bad or dangerous thing.

In fact, as in my case, the remedy for the problem can be more detrimental to your results than the problem itself ever was. Or, that the "problem" can turn out be a tool for making you better.

Instead of fighting or suppressing problematic thoughts and feelings, accept them and know they don't have to mean anything for the quality of your work or your chances at success.

But acceptance goes one step further.

In many more cases than we like we're actually unable to control our thoughts!

Example: I want you to concentrate really hard and do everything you possibly can to not imagine a red firetruck.

There. You imagined a red firetruck!

I told you not to imagine a red firetruck...

Try it again.

Do not imagine a red firetruck!

Your only saving grace is that said firetruck didn't suddenly materialize in the air above your head...

Because things inside our heads can't do that... not without our help!

Be stubborn

Stubbornness, preferably in ridiculous amounts also helps.

After all, Eddison, according to legend, didn't consider himself a failure when he was unable to create a light bulb. He thought of it as finding ways it couldn't be done. Finally, he did succeed, and now we're able to tell stories about it ...

And as you mention, being rejected 800 times and still getting published... we're talking about fanatic levels of stubbornness here!

It all comes back to motivation.

If you know you have something important to say, keep pounding on that door, your head full of doubt and misgivings or not. Don't stop until someone opens!

Look at rejection from the publisher's point of view

I subscribe to a magazine for writers ("Skriva," in Swedish—I think "Writer's Digest" may be a sister publication).

One of the many great things in "Skriva" are interviews with publishers. Several of those interviews cover what they want and why they reject submissions.

There are many reasons why a publisher would reject a piece (wrong genre, or bad quality, to mention two) but one that stuck out was the fact that they get perhaps a hundred times as many submissions than they can ever hope to publish. They just can't afford more than a handful each year, and in the end, it pretty much comes down to the equivalent of a coin toss.

A publisher is, above all else, a for-profit company. A for-profit company has one main goal: to generate profit for its owners.

Everything else is secondary to that. Everything!

Sure, making money off of readers means you have to do stuff readers love, and writers get motivated to write and submit by, but if the economic equation doesn't work out, it's not going to happen.

A well-managed publisher will only help you or support you if they think there is a good chance to make money off of you.

And, even if they are sure they can make a fortune off of you, there are likely a bunch of authors with the exact same promising future. The publisher's time and money force them to choose.

Making money for a publisher depends not just on the quality of what they publish, but also on their chance to sell it and its chance to gain a readership.

Unfortunately, good quality alone doesn't guarantee that the readers will come.

I'm guessing you don't want to be picked up by a publisher on the verge of bankruptcy? ("Skriva" had an article about an author who had that specific experience and I think I take rejection over a bankrupt publisher any day...)

There are many reasons for rejection and far from all of them has anything to do with the quality of your work.

Find a long-term balance between writing, family, and friends

I'd also like to mention your questions about family and friends with regards to everything I've said.

Life is about balance. Many times about mixing opposites...

This is what you may have to do as well. Compromise and decide how to set things up. Perhaps skip TV to get time for your family AND writing. Negotiate solutions where your effort in the home or your time with friends vary depending on your writing. Dropping hobbies (I'm not saying writing is a hobby, but it might help if you replace one or several hobbies with it...) or any other ways to compromise and reorganize to make time for writing.

You should aim for a long-term solution, one your family and friends can live with until you've had your 800 rejections... One that survives the fact that even when you do get published you will in all likelihood still have the same fears and doubts and still work the same hours to get published again... and that this will repeat over and over.

Think of it as building a lifestyle more than anything else...

You will likely have to sacrifice something to become a successful author, but it doesn't have to be your family, friends or health.

A lot of writing can be done with just one less hour in front of the TV in the evening and/or getting out of bed an hour earlier in the morning.

After all, if you are well motivated... if you have something important to say... if you accept that certain thoughts will always want you to doubt that, you have all you need to start making the changes you want.

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