Finished stand-up looks effortless because it has been rebuilt many times in front of small audiences. The development process is closer to iterative testing than to writing.
The premise is tested before the joke exists
A comedian usually starts with an observation rather than a finished joke, and takes it on stage in rough form to see whether an audience recognises the situation at all.
If nobody responds to the premise, no amount of rewriting the punchline will help, so the first test is about whether the subject is shared rather than whether the joke works.
Premises that survive this stage are then developed, which is why comedians talk about material in terms of what a bit is about long before it has a fixed shape.
Small rooms exist because failure has to be cheap
New material fails often, and failing in front of a large paying audience damages a show. Small late-night rooms provide a place where an unfinished bit costs little.
The audiences in those rooms often know they are watching work in progress, which changes their tolerance and makes honest reactions possible.
Wording is refined a word at a time
Once a joke works, the process shifts to compression, removing anything that delays the turn and moving the operative word as close to the end as the sentence allows.
Comedians record their sets to compare versions, because the difference between a joke landing and not landing is often a syllable or a pause rather than an idea.
That level of precision is only reachable through repetition, since it requires hearing the same joke against many different audiences to separate the material from the room.
Order matters as much as content
Jokes are then arranged so that each establishes something the next can use, which lets later material work with less setup and land harder.
Callbacks depend entirely on this sequencing, since a reference only functions once the earlier bit has been performed in the same set.
The set is finished when it stops changing
An hour is considered ready when performances stop producing new improvements, which typically takes a year or more of regular touring.
Recording it then retires the material, and the comedian returns to small rooms with nothing, which is why the cycle restarts from unfinished premises after every special.
That reset is the reason established performers still appear unannounced in small venues, working on material that will not be seen for another two years.