We're going to do this from a running Debian Stretch system, it'll be simpler.
To "prepare" the environment (here a Stretch system w/ contrib & non-free repos enabled:
lb config -d stretch --archive-areas "main contrib non-free" --debian-installer live
If you need some special packages installed in your Live environment, the lists are in
config/package-lists/ (1 package name per line)
Finally, to build the image:
If you did this on a x86_64 system, the image will by default be named
live-image-amd64.hybrid.iso. To put it on a USB stick, you can use
dd the normal way.