Go and grab the .blend file.

The first thing I did in Blender was to sculpt a rough head design. Once I had one ready I started duplicating and changing them to explore different designs. I did not spend much time polishing any of them since the exercise was to try out and throw away ideas quickly. I also painted the heads with vertex painting to get a rough sense of what the characters would look like textured later on.

Although I had a rough idea in mind of where I wanted to take the character design I also added some alternative designs to see if I get inspired to try out a totally different direction. In the end I went for the 3rd design from the left with the ponytail haircut from the designs on the right.