Since joining Index Ventures as general partner in 2002, VC Danny Rimer has been building out an investment portfolio of some of the biggest names in retail and e-commerce: He led Farfetch’s second round, had a later stage investment in Glossier, and established stakes in Asos, Etsy and Net-a-Porter. He’s also tapped into the rise of streetwear, investing in GOAT, Grailed and End Clothing since 2014.

“Fashion is replacing music as that cultural lubricant that breaks down barriers,” Rimer said. “Streetwear is a big part of that.”

Before Index, he was an equity analyst at boutique investment bank Hambrecht & Quist, where he worked on the Amazon IPO.

For the latest edition in Glossy’s Ask a VC series, Rimer discussed how Amazon is currently impacting retail, how brick-and-mortar stores need to evolve and what he learned from investing in Nasty Gal.

Why invest in competitors, as you did with Net-a-Porter and Farfetch?
We come up with an investment theme, and we try and invest across it. We’re based out of London, so in the beginning, we were looking for investment themes that were more unique to Europe than our peers in the U.S., and fashion was one of them; many of the fashion houses and ateliers are based in Europe. So we invested in Asos for fast fashion, which was, and still is, a great business online. And we invested in Net-a-Porter. We realized Net-a-Porter was a great business, but that fundamentally, marketplaces were probably going to be a better business model for scale. And so we decided to double down on Farfetch instead. It was a little tap dance to do between Net-a-Porter and Farfetch, but now it’s all good, because [Net-a-Porter founder] Natalie [Massenet] is co-chair of Farfetch; it’s like the team is back together.

What drove your investment in advanced contemporary line Anine Bing in September?
She is so authentic with what she’s doing. She’s an influencer, she was early on in the days of Instagram, and she had a clear sense of what she wanted to do. The brand also manufactures product, which was really important. And they have a number of stores. It’s a really interesting question of: Can you, from the ground up, starting with Instagram, create a really important fashion label or brand? I don’t know; the jury’s out. It’s still a small brand, but so far, so good.

Is it important that the brands you invest in have physical stores?
The physical component is absolutely critical, but it has to be rethought, and it has to be experiential, and it has to provide something differentiated from the online experience, and very few companies are doing that well. Anine [Bing] is, and it’s related to the freshness of the offering: the fact that you go into the store and you see things that were not online, and you go online, and you see things that were not in the store. It’s a new way of thinking about the supply chain, which I think they’re very thoughtful about. In the case of Glossier, it’s much more about the experience of the store. I would be very surprised if Emily [Weiss] ever had 10 stores, but every store is an experience, and every store is a way of the brand being manifested through the experience, and she does that through pop-ups, as well.

Have you become more interested in beauty and wellness, now that the categories are booming?
Beauty is a really important category. But there are really significant challenges around a number of these huge conglomerates — Estée Lauder, L’Oréal — that have a lot of wherewithal and basically dominate many parts of the chain of the customer life cycle, from the manufacturing to the branding to the selling. There’s a lot of history there, and so it doesn’t really lend itself to being able to upset the category in the same way that a fashion brand can. There are more significant challenges to really building a beauty company of significance.

What have been some key learnings in your years of investing in fashion brands?
I learn more from my mistakes than successes. Understanding the end goals of the entrepreneur is a really important one. Jose [Neves] at Farfetch and Emily at Glossier and Natalie at Net-a-Porter — they were all very interested in building the businesses they were in and they had started. I invested in Nasty Gal with Sophia Amoruso, and that was a different story. Sophia is really building now much more of the business that she was really excited about, which is much more a movement for women who want to be professionals, which is not really a fashion brand. So that was a big lesson. I also learned the importance of being more in control of your future by manufacturing product and understanding supply chain, rather than buying end product or a finished good and remarketing it — that’s a much more difficult way of building differentiation.

Has Amazon’s impact on retail affected your investment strategy?
Amazon does a really good job on mainstream products that are all about convenience, and when you really know what you want — toiletries, things for your kitchen. But when it comes to something that’s going to define who you are, or it starts touching on your identity and the way you’re represented, it’s not really a core competency of theirs. That’s really where we spend our time, thinking about: OK, if Amazon really wins in the mainstream, what are the other areas that are more relevant to the way a person defines themselves? Someone is not going to buy sneakers that are going to give them a sense of self from Amazon or Zappos. They’re not going to buy a blouse or a skirt from Amazon. It’s going to be a more thoughtful purchase, so they’re going to end up on Farfetch, hopefully. Or maybe if they wanted a crafted good, like a beautiful tea set, they’ll go on Etsy, because it will be made by craftspeople, rather than something that’s generic that they could buy at Target or at all these other retailers that are going out of business because of Amazon.

Is there a common link among the successful brands you’ve invested in?
A lot of the businesses have won because they have supply that no one else has. If you think of Farfetch and its success, it’s fundamentally not because of the brand they’ve built; the brand has really been an offshoot of the superior supply they’ve provided with the great customer experience. Now they’re working on brand, but it’s not part of Jose’s DNA to think of brand first — it’s thinking of supply for the customer, and how to help the industry, and how to provide a platform that will enable folks who don’t want to engage in the Amazon monolith to survive or to thrive. Now, there’s a lot they’re having to rethink.