Now, Step 2 should take longer than step one, in my opinion, but it doesn't have to. The recommendation here is that you would want to have at least 4-5 sentences, and probably not more than 6-7. This is based on my interpretation of Randy's original description. Randy stated that he liked a 3 Act run for his story, which works out like this: the first sentence would start setting the scene for the story, the second sentence would be Act 1 (major conflict #1), the third sentence would be Act 2 (major conflict #2 that escalates in scope from conflict #1, the fourth sentence would be Act 3 (major conflict #3 that escalates and expands in scope conflict #2), and then finally the fifth sentence would be the story resolution that ties everything together.
Interestingly, and Randy explains this, is that the work you do here could, and probably should, be used or at least referenced for the back cover of your book - the sales copy that gets someone to actually purchase your book. Obviously, you don't want to give away the ending of the story (that's why they buy the book!), but you can use a cliffhanger approach to things: will he make it out alive; will she discover the killer; will they burn up on re-entry; etc.
This paragraph will help to get you to a resolution for the end of your story, while also giving you very important way-points in your story so that you don't get too far afield when you get to actually writing your story. At this point, you may discover the need for an additional major or minor character, a new location, another thread to a character's back story, etc. These are all good things, and should be written down for future inclusion with your story.
As I started in Step 1, I'll provide you with what I have for my current story below. This builds on what I did in Step 1, so you can see the progress that I've made. These aren't perfect, and I intend to tweak these a bit in the end, but it's a start, and that's all that I need.
Out camping and geocaching in the deep Wisconsin woods, two best friends unwittingly get drawn into a voyeur's murderous game. They start by following a series of clues to an old, abandoned church, where one of them gets trapped in a sinister torture room. While searching for his friend, the other gets lost in an abandoned mine. Desperately trying to escape, they each meet The Woodsman, the voyeur who's been pulling all of the strings. One of them escapes...but can he live long enough to reach help?