Joe Coffee: Scaling up without selling your soul

Wearing his trademark thin cashmere pullover sweater and jeans, Jonathan Rubinstein's gentle demeanor reminds one more of the children's television star Mr. Rogers than that of a coffee king. Yet, Rubinstein and his sister Gabrielle preside over one of the most beloved coffee chains in New York City, Joe Coffee. "I never thought of Joe as a business until recently. Gabrielle and I ran it like it was ma and pa amateur hour for a number of years," explains Rubinstein humbly.

Now, it's time for this little ma and pa to bust out. After years of steady growth, Joe has recently accelerated its expansion plans. "We think there's room for 30 Joe Coffees in New York," enthuses Jonathan. He is considering expanding to other cities as well.

But, first the Rubinsteins have to figure out how to expand without losing what makes their shops special. If you could boil down Joe Coffee's core values, they would be "fanatical" attention to quality control;and coffee served up with downright affection. "Accessibility is important," explains Jonathan. "We're not clubby and exclusive. We don't want to intimidate people. Everyone should feel welcome." Watch the video in the player above to learn more about how the Rubinsteins approach these and other startup concerns

Like any startup, Joe Coffee has had its ups and its downs. When the Rubinsteins opened their first shop in 2002, they were at the forefront of the specialty coffee movement on the East Coast. By 2006, competitors had moved onto Joe Coffee's turf and, in some cases, were doing a better job. "Our wake up call was an article in The New York Times about artisanal coffee," says Jonathan. The piece named the best coffee shops in New York City and Joe Coffee wasn't on the list.

"The Times reporter said our quality was wildly inconsistent. And I thought, 'Holy Cow, what's happened to us?'" says Jonathan. The Rubinsteins quickly regrouped and did a top-to-bottom assessment of their processes. "It made us realize we needed to put much more into the company. We had been living in a bubble for a long time, doing things our way, not asking for expertise from outside world."

Over the next two years, Joe Coffee shook things up and revamped everything from their quality control procedures to their equipment cleaning processes to staff training. Today, not only are they respected by coffee geeks nationwide, but Joe Coffee has a staunch and growing cadre of adoring customers locally. Watch the segment below to learn more about Jonathan's about-face:

Joe Coffee wouldn't be what it is without its baristas, who each go through three months of exhaustive training to learn everything from "milk chemistry," to "progressive brewing." Watch the following video to learn how Joe Coffee maintains quality control while keeping its staff happy. Turnover is an astoundingly low 20 percent a year (in an industry that averages 70 percent turnover):

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    Laurel Touby is the founder of mediabistro, the largest media community website in the US. Touby is an Internet pioneer, who started her company in 1996, took it to profitability, grew it to millions in sales, and sold it in 2007 for $23 million. She currently is an investor in and advisor to small Internet companies.

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