Now, as far as creating the specific conflict for your main character, some obstacles are external, some internal, some both, but the best obstacles are those that are created by the characters themselves. This is why establishing very specific character flaws is so important in the first act: hubris, doubt, narcissism, jealousy, overconfidence, etc... because it is with the character's own flaw(s) that will get him or her into even more trouble. And more trouble is exactly what you want - self induced trouble is a recipe for success. To put it another way, it is better for the character to put his foot in his own mouth than for someone else to do it for him.
The 1967 film Cool Hand Luke is a great example. In the opening scene, we see Luke (Paul Newman) using a pipe cutter to cut off parking meter heads. We see he's cheerful, drunk, and wearing a faded GI Field jacket, with a bottle opener hanging on a silver chain around his neck. And as two officers approach, Donn Pearce and Frank Pierson's screenplay reads that Luke "lifts a bottle of beer, opens it and drinks, smiling. On his smile, FREEZE FRAME."
That's it. By page one we have everything we need to know about Luke's major flaws.
We understand that this is a man who defies authority and the cutting off of parking meters is his way of sticking it to "the man": the police, the government, or anyone who conforms while wearing a uniform. Yet a second flaw illustrates a psychology of rash, impulsive action. He must know he's going to get caught, which seems clear enough with his smile to the police. So despite knowing the consequences, Luke still follows his impulsive drive.
And the irony of all this is that even though his prison sentence is relatively short (it was just parking meters), his inability to conform to prison life along with his reckless decision making creates much larger obstacles, leading him down a tragic and deadly road if he so chooses to continue.
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