My favorite scene from the adaptation of Wonder Boys comes when Grady, Crabtree, and James concoct the life story of a man on the other side of the bar, naming him Vernon Hardapple. While they’re wildly off the mark on who this man actually is, they still manage to create a compelling idea of who he could be.
Which brings us to the exercise:
Step 1: Go somewhere public and crowded. Focus on a single person. Do not, under any circumstances, behave in a way resembling a creepy stalker.
Step 2: Note everything you observe about this person, but don’t editorialize. Be literal, clear, and capture as many details as you can.
Step 3: Use your observations to make them a character. Give them a name. What were they doing when you saw them? Where did they come from? Where were they going next? Go as far into their backstory as you can with the information you’ve gathered from watching them.
Remember, you’re not trying to figure out who they actually are. This is an exercise in being a writer, not a detective. Find ways to take what you see in this stranger and bring out the potential for conflict in their life. What stories could you write about someone like this person?
Using an actual person as a base is a way of grounding the character. You can mash up any number of characteristics when you start from scratch, but a flesh and blood model will remind you that while a character may have contradictions, they are still a single, unified identity.