Ken Keeler came up with the idea for the episode from the one sentence statement: "Let's do spin-offs". His idea was to use intentionally bad writing and "crazy plots", which underlines their critique of spin-offs in general. After he had pitched the idea it was decided that "it was an idea that ought to work pretty well" and production went ahead.
The writers later noted that the episode divided fans. Matt Groening feared that the fans would interpret the episode in a negative light and was uneasy about the episode when it was in production. He later went on to say that the episode "turned out great".
The episode demanded a different approach to directing than a usual episode. Director Neil Affleck had to animate each segment so that it fit the style of the show it parodied. The Love-matic Grampa segment for instance emulates a three camera setup, as is normally used in sitcoms.
Lisa appears with one line in Chief Wiggum P.I. It is announced she is replaced in The Simpsons Family Smile Time Variety Hour, which is a likely spoof of the 1977 spin off The Brady Bunch Variety Hour (1976). Eve Plumb refused to participate in this spinoff (she didn't want to appear in all of the planned episodes), so she was replaced by another girl playing Jan Brady.
Matt Groening was uneasy about the idea, feeling that it could be mistranslated as actually bad sitcom writing. He also did not like the idea of breaking the fourth wall and the concept of saying that the Simpsons were just actors in a television show. The idea was later explored in the season 11 episode Behind the Laughter (2000).