A few years back, someone on RPGnet started a thread about backstory's role in chargen. His argument was that backstory can easily become a hindrance to play because it encourages the player to create a character with a completed story arc. Things such as lots of detail or important events that have already occurred, he argued, have the paradoxical effect of making a character harder to play because all the cool stuff has already happened.
Now, IMO, there's a grain of truth in that. A backstory can be useful if it helps people get a feel about what the character is like, and it sets up something to be resolved in play (an issue, conflict, goal, whatever). Either backstory is directly facilitating play, or it's causing problems for play. I look back at some of the 10+ page histories I wrote up for my characters back in college, and what I see is the first goal (getting a feel) being achieved at the expense of the second one (facilitating play). The result were characters that were always cooler when they were inert, before play started. One thing that helps avoid this is not writing it in isolation. The more it is written with the GM & players in mind, possibly with their input, the better off it will be.
What I like about the 100-word method is it enforces parsimony, which encourages one not to write a backstory that is sprawling or complete. You can put elements of a backstory in if you want ("I seek revenge on the six-fingered man who killed my father 10 years ago"), but you don't have the room to construct a narrative. It really forces one to zero in on what their character is really about. The 100-word description is basically "PC concentrate," kinda like orange juice concentrate (only I think it probably involves soda instead of water being added).
With some practice, I find it is fun writing 100-word descriptions. And the editing process is, strangely, part of the fun. It is decidedly NOT a backstory, though for many gamers, I suspect it can serve the same function.
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