12 September Pondera’s Founding September 12, 2016By Jon Coss - Blog Manager General Google, Pondera, Pondera Solutions 0 I am often asked what motivated me to start Pondera. So… Here goes.In 2011, after my previous company was acquired, a good friend working at Google asked me to visit their Mountain View campus. He was interested in learning how to embed Google products in large government programs like Medicaid, Unemployment Insurance, and eligibility systems.Over the course of a couple of days, I was briefed on Google’s products and capabilities and I was struck by the massive computing power that their customers could literally “rent” as needed. Having spent over 20 years in technology, it was becoming clear to me that cloud computing was more than the latest tech buzzword. But it was during a discussion about the Google Prediction API though, that my imagination was really piqued.With Prediction API, I realized, government organizations could analyze huge amounts of data to predict future events and identify data anomalies. All without ever buying a single piece of hardware or software. Thinking back to my time working on large government systems, I realized that this new technology had the potential to solve one of the problems that had always bothered me: fraud, waste, and abuse.Over the years, I had worked on over 100 large government projects. And it had always amazed me that despite the fact that improper payments often exceeded 10% of program disbursements, most government bids had only a handful of requirements to address the problem. My government colleagues explained that they were under such pressure to deliver their services with such limited budgets that they simply could not invest appropriately in fraud detection.Sitting in that room at Google headquarters, it was apparent to me that emerging technologies offered a new way to solve an old problem. One week later, I founded Pondera and set out to change the fraud detection market. Five years later, we’ve helped our clients prevent and collect hundreds of millions of dollars in improper payments. And we’re just getting started... Related Posts Pondera’s Modified Bucket Theory I once worked for a manager that operated under what he called his “Bucket Theory”. His theory went like this: hire successful people, throw them in a “bucket”, and see who can climb their way out. Those that did, he explained, were the type that could succeed at this particular tech company. Those that couldn’t climb out were soon shown the exit. Pretty Spartan of him.When I founded Pondera, I thought it might be interesting to make modified use of the “Bucket Theory”. Here’s how my theory goes: hire skilled and dedicated people with diverse backgrounds and experiences, broadly define the problem that needs to be solved, then throw them in a “bucket” and ask them to come up with a solution for the problem. The only guidelines: treat each other with respect, expect mistakes, share in success, and “think outside the bucket”.Turns out that this modified bucket theory works pretty well. I’m constantly amazed by the innovations made by Pondera’s employees. And walking around the office, it’s not unusual to see a former FBI agent working with a PHD in Learning and Mind Sciences, an Unemployment Insurance investigator collaborating with the former founder of a Silicon Valley drone company, or a data scientist talking with a Certified Fraud Examiner.Since founding Pondera, I’ve read a number of articles about the importance of hiring staff from “adjacent” markets. For example, one article detailed how some skateboarders were able to help improve construction site safety equipment. And I think we’ve all seen images of football players in training sessions with ballet instructors. I imagine that the conversations between these two groups were equally as entertaining as the ones among Pondera’s employees.So why don’t more companies take this approach? I think there are two main reasons for this. First, many companies start with or develop the belief (sometimes arrogance) that their way is the only way. Like the proverbial hammer, they subsequently see every problem like a nail. The second reason: it can be very difficult to maintain a healthy company culture across such varied career experiences. Success depends on a clear and transparent vision combined with world class human beings. I personally feel very fortunate to work side-by-side with such people in the Pondera Bucket. Pondera’s High Potential Leader: Amanda Huston Established in 1636, Harvard University is the United States' oldest institution of higher learning and one of the world's most prestigious universities. A couple of weeks ago, I had the remarkable opportunity to participate in the Harvard Business School Executive Education Program for High Potential Leaders. To step foot on this amazing campus filled with brick buildings plush with deep green climbing ivy, you almost immediately feel like you are part of something special (or perhaps inside some Matt Damon/Ben Affleck movie). Stepping foot in the state-of-the-art classroom with the instructor "pit" in the center, surrounded by 100 of the world's most talented and up-and-coming leaders, I wondered if I fit in this group or would have any common ground. My learning group, a smaller team designed to facilitate debate and discussion on assigned topics, included eight talented young professionals; only two originally from the United States. They represented a variety of industries, none of which had anything to do with mine. What I learned by working with this group, is that despite my initial hesitation, we were far more alike than I could have imagined. No matter their business, job title, or Country of operation, we faced so many of the same challenges and experiences in our professional lives. During one group activity, I began to think about how this applied to the clientele I serve at Pondera. Whether it's a small State unemployment program or the Nation's largest Medicaid program, these teams of dedicated professionals face so many of the same challenges and share similar experiences. Perhaps, I could bring them together through the Pondera client network and facilitate cross-state, cross-program sharing and learning. My brain was really starting to kick into high gear now. Reflecting back on my time at Harvard, I decided to focus on the key ways I could translate my experience into benefit for my company and clients. I decided upon three themes: Bold, passionate, inspiring leaders can change everything. No matter if you are managing financial accounts worth billions or a Government employee overseeing a Federal entitlement program, the culture created from these kinds of leaders brings success to the whole organization. Skills can be taught, management can be improved, but make no mistake, there is no substitute for extraordinary leadership. We must find these leaders, and then cultivate and cherish them. Networks are critical to continued learning and success; make time to grow and nurture yours. Your network could be persons within or outside of your organization, family, friends, peers, professional mentors, etc. Networks serve as a vibrant source of creative energy, partnership, and may just offer the solution to whatever challenge you or your organization is facing. Make time in your daily grind to have a coffee, make a quick call, or even share a meal with key persons in your network. Always be willing to adapt and evolve or be prepared for extinction. This is especially true in leading innovation, particularly in the data analytics arena. Fraud schemes change, data sources emerge, programs transform. At Pondera, we can never get comfortable or diminish our aggressive pursuit to lead the way. Governments must embrace the "information age" and transform their processes, modernize their programs, and challenge the status quo. Graduation Flying Pigs with Unicorn Horns Earlier this week, I was surfing one of Pondera’s internal messaging boards when I came across a photo of some painted rocks depicting flying pigs with multi-colored unicorn horns. It seems that one of our investigators is also a part-time artist. I must admit that I was confused by the subject matter. This is the response that I received to my question about the rocks:Within Pondera’s Special Investigations Unit, you have to earn the flying pig rock by accomplishing something that others might consider implausible, so that they’d say “that’ll happen when pigs fly”… but more than that, you also have to do it like only a beautiful, magical unicorn could do it.This is absolutely one of the most unexpected and satisfying things I’ve discovered in all my years in business. This tradition explains so much about Pondera’s success. We have a team of incredibly successful and dedicated people that continue to work on doing what many previously thought impossible. They do it themselves with only broad guidelines from the management team (hence my not knowing about the “pigacorn”). And they have fun while doing their work, taking pride in knowing how truly important it is.While I continue to take pride in the success that Pondera is having fighting fraud alongside our clients, my recent discovery serves as yet another reminder of what makes this company go (dare I say fly?). I often say that everyone at Pondera left something great to join our team and align behind our mission. With people like that, I expect a lot more flying pigs and a lot less fraud. New Drug Overdose Death Statistics A common topic on Pondera’s blog is the seemingly endless acceleration in the number of drug overdose deaths. And based on recently released data from the CDC, this will likely be a topic into the future as well. In fact, the CDC points out that drug overdose deaths nearly tripled between 1999 and 2014, and increased an additional 11.4% last year to 47,055.Of particular concern to Pondera is the growth in opioid-related addictions which now account for 63% of drug overdose deaths. Opioids include heroin, prescription drugs like oxycodone and hydrocodone, and synthetic opioids like fentanyl. Each of these drugs, some legal, others illegal, can offer a similar high to those who use them without medical supervision. This is why you read stories of users who “graduate” from prescription medications to heroin when the prescription is no longer available or affordable to them.Another tragic consequence of opioid abuse is the growing number of babies born with drug withdrawal systems. This problem is especially prevalent in rural areas of the country where 7 out of every 1,000 babies enter the world with drug withdrawals. This represents a 700% increase over the past decade.So now that we agree that this is problem, what can we do about it? In my opinion, we can stem this dangerous tide through increased media coverage, more patient and doctor education, the use of less harmful drugs, and technology to track abuses. As patients, it is important to ask questions of your doctor, to safeguard pills at home, and to dispose of them safely. And as citizens, it is important to demand education for medical professionals and the use of technology to track illegal “pill mills” and imports from other countries.It’s clear that curbing opioid abuse is going to require a difficult and sustained fight. However, I’m confident that by working together, we can make a difference. New Age of Identity Theft Problems Remember back to last year when the IRS announced that cyber thieves stole personal data from 100,000 taxpayers? This sophisticated scheme accumulated personal data from other sites and used it to answer identity validation questions on the IRS web site to gain access to taxpayer accounts.The 100,000 taxpayers affected? The IRS revised that number later in the year to 334,000 Last week they raised the number again to more than 700,000! Combine this with the high-profile hacks at Sony, Target, Anthem, and other organizations and one thing becomes very clear: bad actors are rapidly improving their identity theft methods.In response, government agencies need to prepare for an onslaught of fraudulent tax returns, unemployment claims, Medicaid treatments, and other services. In 2015, the IRS paid out $5.8 billion in fraudulent returns. Several of Pondera’s clients also saw dramatic increases in “ghost” beneficiaries, often paired with fictitious businesses, set up solely to defraud government programs. 2016 promises to be even more problematic.As program integrity experts, we have to recognize that we are moving into a new age of identity theft problems. We can log on to YouTube and watch a music video about Unemployment Insurance Fraud. CNN has run stories on street gangs trading liquor store holdups for benefits fraud. The barbarians are at the gate and it’s our responsibility to strengthen the defenses. Welcome to the new Pondera Blog We’re all in this together. You may work in Medicaid, Unemployment Insurance, Integrated Eligibility, SNAP, WIC, TANF, or any of the other important government programs that so many Americans depend on. Regardless of the program though, we all share the common goal of fighting fraud, waste, and abuse to make sure that our programs help those people who qualify for and truly need the assistance.The goal of the Pondera Blog is to post and share information that is relevant to all government program integrity professionals. If we’ve learned nothing else as we work across programs and across states, it’s that bad actors don’t limit their activities to one program or one state. They follow the money wherever it leads them. For PI professionals, this means there is a lot to learn from your peers in other states and other programs.We hope you’ll check back often for new content. Our intent is to post information on emerging fraud methods, promising detection techniques, lessons learned from our projects, and a variety of other topics. Some might question why we would share this information in a public forum where Pondera’s competitors can easily view what’s of interest to us (clearly we’ll never post anything that could help fraudsters). Our answer to that question is simple: we’re all in this together. Comment (0) Comments are closed.