I don't think we ever developed any software targeted at the Lisa (or if we did, it was in the brief period before I joined). We were always developing for the Mac, initially cross-compiling from Lisa.
We did move to Mac-based development after not too long. I have zero memory of why/how that happened, but I'm sure it was clear even at the time that the Mac was the more sustainable long-term platform (also the Lisas were insanely expensive). Still, for a while there it was a real stretch to squeeze a reasonable dev environment into Mac hardware. I remember – and this feels insane as I'm typing it, but it happened – at some point we actually paid someone to fab an add-on circuit board that we somehow glommed into our Macs (these were probably 512KB or 1MB models, I can't remember) that doubled the RAM size. The additional RAM couldn't be used for normal applications, it somehow manifested as a RAM drive. We had one RAM drive in the add-on memory, a second RAM drive partitioned from the standard motherboard memory, and the rest of the standard memory was used to run dev tools and/or the application under test. Putting all of the source code into a RAM drive was necessary to make the development experience tolerable (I can't remember whether the concern was source code navigation, build times, or both... EDIT now that I think about it, it might have been the object code rather than the source code that needed to be on the RAM drive; or perhaps both).
In the mid-late 1980s we compiled and tested Amiga software on the Amiga entirely from RAM drives using rather expensive 2 MB RAM add ons, and then stored the updated source code on 3.5" floppy disks that had to be rotated out regularly because they regularly went bad.
Only towards the end of the 1980s were hard drives inexpensive enough to become commonplace. My first 65 MB drive cost $949 (ca 1989), and that is why we were using floppies and RAM drives instead. The RAM drives did survive reboots and crashes most of the time, which helped quite a bit as you may imagine.
We did move to Mac-based development after not too long. I have zero memory of why/how that happened, but I'm sure it was clear even at the time that the Mac was the more sustainable long-term platform (also the Lisas were insanely expensive). Still, for a while there it was a real stretch to squeeze a reasonable dev environment into Mac hardware. I remember – and this feels insane as I'm typing it, but it happened – at some point we actually paid someone to fab an add-on circuit board that we somehow glommed into our Macs (these were probably 512KB or 1MB models, I can't remember) that doubled the RAM size. The additional RAM couldn't be used for normal applications, it somehow manifested as a RAM drive. We had one RAM drive in the add-on memory, a second RAM drive partitioned from the standard motherboard memory, and the rest of the standard memory was used to run dev tools and/or the application under test. Putting all of the source code into a RAM drive was necessary to make the development experience tolerable (I can't remember whether the concern was source code navigation, build times, or both... EDIT now that I think about it, it might have been the object code rather than the source code that needed to be on the RAM drive; or perhaps both).
Different times...