Sword of Spirit
Legend
I agree with the basic premise, though I vary in implementation.
I look at the monster straight out of the book (hit points and hit dice and all) and assign it an effective character level (based on an algorithm I haven't yet finished developing). That's the level of that character, and you can (and must) multiclass into another class (following normal rules) to advance. If the original monster entry's CR wasn't the same as the assigned monster level (which it probably wasn't) you need to recalculate the proficiency bonus for it based on its new monster level and any class levels. For ability scores, I'm basically just going to have the PC start with the ones in the statblock, and then be able to adjust them up or down (again, I'll have to make rules for how that works) a little bit. The monster's entry will be the guide for what weapon and armor proficiencies they begin with (probably simple weapons for anything that has hands, martial for anyone listed with a martial weapon or portrayed as being a warrior, and armor up to whatever category they are shown using, keeping medium and shields together). Certain features that are similar to class abilities can get replaced with class abilities--like Multiattack with weapons and a bite being replaced with Extra Attack and the ability to bite as a Bonus action. You then add a Background as normal (I'll probably have to come up with some more monster appropriate background features).
I haven't figured out how to deal with certain things, like saving throw proficiencies. Many monsters have none at all, and since you don't get any from your class that seems a bit harsh. I may decide to let you have a minimum of one, or I may just not worry about it and let them take Resilient later if they want a save. Skills aren't as big of a deal, since you will always get 2 from your Background.
It gets trickier with some things, usually involving stacking with class levels. A prime example is the Spellcasting trait, which necessarily sets a minimum level for the monster class level. I haven't decided whether to treat it as if they actually have that class (ie, arcanoloths actually have 16 wizard levels and probably get appropriate extra features added like Arcane Recovery and Arcane Tradition), or just to say they have the spellcasting components of it and if they take levels in the actual class the spellcasting stacks but the class features are based purely on actual class levels. In any event, arcanoloth and ultroloth are real stress-tests of the system, since ultroloth is supposed to be more powerful than the arcanoloth, but you probably need to make the arcanoloth equivalent to at least an 18th-level PC, and the ultroloth can't be any lower level than that.
That's an extreme example. Most monsters, even those with game-altering abilities, aren't that tricky. I think thinking in terms of "game-altering" versus "game-changing" is a key. Aarakocra can fly at 1st-level, but they aren't really an unbalanced race. It's just that a low-level game with an aarakocra plays differently than a typical game because certain exploration tasks are easily solvable. In the same way, I don't think there is any problem with having regeneration on a 10th level character (or whatever a troll is equivalent to), when they are basically just a brute otherwise. It mostly just means they will use up less healing resources from the party. The same thing applies to most monster features that people are afraid of. You have to separate actual PC power considerations (used to determine its monster class level) from game-altering considerations (used to determine if it should be allowed in a particular game/campaign).
Probably the toughest one though is lycanthropy...still haven't figured that one out, but I'm not happy with the idea that while a typical werebear you run into has 135 hit points, a 2nd-level fighter who gets the curse just keeps their 20 hp. And immunity to non-magical bludgeoning, piercing, and slashing damage actually is a serious game balance issue on a PC that I haven't figured out how to deal with (not giving it to them isn't an option I'm interested in).
I look at the monster straight out of the book (hit points and hit dice and all) and assign it an effective character level (based on an algorithm I haven't yet finished developing). That's the level of that character, and you can (and must) multiclass into another class (following normal rules) to advance. If the original monster entry's CR wasn't the same as the assigned monster level (which it probably wasn't) you need to recalculate the proficiency bonus for it based on its new monster level and any class levels. For ability scores, I'm basically just going to have the PC start with the ones in the statblock, and then be able to adjust them up or down (again, I'll have to make rules for how that works) a little bit. The monster's entry will be the guide for what weapon and armor proficiencies they begin with (probably simple weapons for anything that has hands, martial for anyone listed with a martial weapon or portrayed as being a warrior, and armor up to whatever category they are shown using, keeping medium and shields together). Certain features that are similar to class abilities can get replaced with class abilities--like Multiattack with weapons and a bite being replaced with Extra Attack and the ability to bite as a Bonus action. You then add a Background as normal (I'll probably have to come up with some more monster appropriate background features).
I haven't figured out how to deal with certain things, like saving throw proficiencies. Many monsters have none at all, and since you don't get any from your class that seems a bit harsh. I may decide to let you have a minimum of one, or I may just not worry about it and let them take Resilient later if they want a save. Skills aren't as big of a deal, since you will always get 2 from your Background.
It gets trickier with some things, usually involving stacking with class levels. A prime example is the Spellcasting trait, which necessarily sets a minimum level for the monster class level. I haven't decided whether to treat it as if they actually have that class (ie, arcanoloths actually have 16 wizard levels and probably get appropriate extra features added like Arcane Recovery and Arcane Tradition), or just to say they have the spellcasting components of it and if they take levels in the actual class the spellcasting stacks but the class features are based purely on actual class levels. In any event, arcanoloth and ultroloth are real stress-tests of the system, since ultroloth is supposed to be more powerful than the arcanoloth, but you probably need to make the arcanoloth equivalent to at least an 18th-level PC, and the ultroloth can't be any lower level than that.
That's an extreme example. Most monsters, even those with game-altering abilities, aren't that tricky. I think thinking in terms of "game-altering" versus "game-changing" is a key. Aarakocra can fly at 1st-level, but they aren't really an unbalanced race. It's just that a low-level game with an aarakocra plays differently than a typical game because certain exploration tasks are easily solvable. In the same way, I don't think there is any problem with having regeneration on a 10th level character (or whatever a troll is equivalent to), when they are basically just a brute otherwise. It mostly just means they will use up less healing resources from the party. The same thing applies to most monster features that people are afraid of. You have to separate actual PC power considerations (used to determine its monster class level) from game-altering considerations (used to determine if it should be allowed in a particular game/campaign).
Probably the toughest one though is lycanthropy...still haven't figured that one out, but I'm not happy with the idea that while a typical werebear you run into has 135 hit points, a 2nd-level fighter who gets the curse just keeps their 20 hp. And immunity to non-magical bludgeoning, piercing, and slashing damage actually is a serious game balance issue on a PC that I haven't figured out how to deal with (not giving it to them isn't an option I'm interested in).
