Follow these steps (in this exact order):
1. Plug in Ethernet cable into SHIELD TV (make sure your local network has DHCP enabled)
2. Plug in SHIELD controller to a USB port on SHIELD TV
3. Plug in Power to SHIELD TV.
4. Wait for one minute without touching any buttons on SHIELD controller
5. Press and hold the the Home button and Dpad-left button on SHIELD controller for 3 seconds
6. The blue LED on the controller will blink 3 times. This is to acknowledge that step 5 was correctly completed.
7. If LED does not blink, repeat steps starting at Step #2
8. Leave the system alone for 2 hours. Download of software update might take a long time depending on download speed.
9. Once SHIELD boots and you see the display, SHIELD should be ready to use.