Stitch People portraits are definitely unique. I've written some blog posts about "Why Stitch People?" and "Stitch People's Character Design Explained" that you can read here, and here. But to sum it up:
Stitch People works because creativity loves constraints. It does work to squish a lot of personality into small, little squares of embroidery. Plus, Stitch People portraits feel do-able. They're not a huge mountain to scale. They're a walk in the park. And because they're 100% hand-made and 100% personalized, they feel 100% awesome to make.
As far as the design goes, I believe the greatest way to customize an individual for a cross-stitch portrait is with their hair color, hair style, and clothing choices, as well as with their placement and position within the portrait. It is this line of thought that guides the entire design process.
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