ukBack in 2008 I wrote a column for BusinessWeek on how ecommerce had hit a wall. Although numbers– and all empirical evidence– backed my griping up, at the time there was only one venture capitalist I knew who was aggressively betting on a new generation of ecommerce companies: Danny Rimer of Index Ventures.

And — astonishingly enough– a lot of the new ideas were coming out of stodgy old Europe. In a recent conversation, Rimer quipped that European entrepreneurs are actually better at ecommerce than Americans– at least in this generation. I was intrigued given Europe’s comparative paucity of big exits, so I caught up with Rimer to elaborate. It seemed a fitting end to our month-long series on ecommerce 2.0.

While Rimer has backed some pretty stellar US ecommerce companies of late– including Etsy and NastyGal– he is right that the Europeans deserve some credit for the emergence of this new wave and many of its characteristics.

To hear much more of where Rimer is investing, I hope you’ll join us for our PandoMonthly this Thursday in San Francisco.

Sarah Lacy: Why’d you start looking at ecommerce before so many others?

Danny Rimer: I was actually one of the equity analysts that took Amazon public, and I got such an understanding of Jeff Bezos’ vision and how focused he was going to be on owning ecommerce. That was a big insight. The second was that eBay was having difficulty with its auction model. Amazon had differentiated on scale and technology, while eBay had grown out of little affinity groups that got diluted as it got bigger. They had to change the business model.

What happened in Europe was this realization that there were these big US companies and in order to compete, they had to be different from what was online. The second thing was the offline world of retail in Europe is so much more competitive than the US. They had to be significantly differentiated from offline competition as well. They were very data-oriented discount retailers that were on the same fast-fashion trend. They were so aware of pricing dynamics that flash sales and daily deals didn’t really take off. They had to find a subsegment that was very hard for the big retailers to compete with, but not so big they’d be seen as competitive.

Net-A-Porter and Asos were early examples of companies that married content and community with the product. They essentially realized that Zara had done such a good job in the physical world, that they didn’t have time to compete in the digital world.

So that was one trend. The other was: Let’s see what Amazon has done well and let’s try to apply it to new markets. That lead us to Ozon. It was similar to Amazon when I first saw it. Ozon was one of the biggest traffic sites in Russia because there were so few sites.

SL: Let’s get back to Net-A-Porter and Asos. What did they do better?

DR: Curation. Fundamentally, Net-A-Porter was started by amazing buyers. They came up with an online way of consuming that content as well as making it easy to buy. Net-A-Porter had to create an environment where you could buy and they’d deliver it on the same day in London and New York.

In the US, commerce sites leveraged bloggers and other content sites and then redirected them to another site where they were supposed to buy something. The actual experience was confused. It wasn’t as seamless or frictionless as what Net-A-Porter had.

Asos was planting their product in physical magazines making sure celebrities were wearing Asos. It became a phenomenon. 85% of girls aged 18-34 were aware of Asos and would cite it unprompted.

SL: That’s interesting that Asos got so much out of celebrity, when you’ve been pretty critical of the role of celebrity in some of the up and coming ecommerce companies.

DR: Celebrities were wearing Asos, because they were choosing it. They were wearing it because they liked the product, not because they were coerced or getting a kickback for wearing an Asos product.

The flaw is thinking that just getting a celebrity to wear something means all their fans are going to love it. It assumes the population doesn’t think for itself, which I don’t think is right. Celebrity endorsement is not something I believe in. Celebrity as a style icon I believe in very strongly.

The trend was very big in 2010 and 2011 and it slowed in 2012. I think the obsession with Silicon Valley wanting to marry with Hollywood is dying down finally, and I think that’s healthy. Techies are good at what they do and celebrities are good at their craft and those two should remain separate.

SL: You haven’t mentioned Vente Privee which was the European company that started flash sales.

DR: They did it for a specific reason. The only way to sell discounted clothes online in France was through a membership program. It made sense for the French economy and was doing well. That concept got abstracted and made everyone assume that it’ll work even better everywhere else. That is definitely not the case.

The other aspect is the Vente Privee guys come out of the actual apparel business. They know fashion and clothes incredibly well. Many of the replicas of flash sale sites were starting out from tech and then trying to figure out fashion. That’s much more difficult.

SL: What other fads in ecommerce did you avoid?

DR: The something in a box trend. We did a seed investment, but we liked the entrepreneur and we still had huge reservations about it. We like sites that celebrate what is unique and curatorial and focus on the product. I like sites that are able to create a link with the user base over the product. The whole notion of celebrity endorsement and things in a box are business model tweaks. If those get any traction at all, Amazon will do a better job of it than anyone else. Subscriptions are interesting as a way of capturing an audience then migrating them to classic ecommerce rather than build a business off of that model. It might be an interesting Trojan Horse.

SL: What about ecommerce companies that are aggressively paying up to acquire customers?

DR: The lesson I learned in the first Internet bubble that I wasn’t keen replicate was paying ten dollars for one dollar of revenue. It doesn’t scale over time. We’re trying to avoid those models. Brands are created by customers really associating themselves and identifying with a brand. That is something you can’t buy. It’s based on genuine understanding of what your customer wants and delivering on that again and again.

That’s why I was so excited about Nasty Gal, with 20% of monthly uniques showing up everyday. Etsy too was a movement. And Asos with its 85% awareness in the UK. Those are things you can’t buy, you have to enable them to happen and unleash them.

SL: What do you think about social and ecommerce?

DR: It’s absolutely essential. The question is whether it’s a lubricant or an effective platform for advertising. It works well on the former, but is unproven and expensive when it comes to the latter. You can’t rely on it. It’s not proven yet.

SL: And what about the impact of mobile on commerce?

DR: Mobile offers the ability to buy in a different environment than you could before. Mobile commerce is doing well despite itself. Most companies have not optimized the mobile experience at all– the same way social on mobile is doing well despite itself. There was a lot of pent up demand of the customer wanting to shop on mobile and that is what’s made it so phenomenal, not anything retailers have done.

SL: Is there any deal you wish you were in?

DR: Pinterest hurts. I must say, Pinterest really hurts. It’s not an ecommerce company in the way we’ve been talking about, but it’s an incredible facilitator of ecommerce. That one I will continue to see a shrink about for a long time.

SL: Have you made any recent investments in ecommerce?

DR: Not that we’ve announced.

SL: What do you want to see in an entrepreneur? Someone from the fashion side or the tech side?

DR: It’s tough not to sound corny on this one, but what I look for is entrepreneurs who have soul, who really have very focused and differentiated taste and understand their customer incredibly well and care about that customer. I’m definitely not looking for technologists when it comes to ecommerce. I want people who have a really good understanding of their customer. That’s why Nasty Gal just screamed out at us and the same with Asos and Net-a-porter as well. It’s the deep understanding of who the customer was. That’s why you haven’t seen us doing any ecommerce out of Silicon Valley.