Next duplicate that button shape and use Ctrl+T > Free Transform to resize it down. If the proportions are not right, you might try to adjust it using Direct Selection Tool (A). This tool gives you the ability to change the placement of anchor points. You can change them by clicking on the shape path.
If you got lost or don’t know how to do this, there are two other ways of doing it quite fast:
1. You can simply go back to Rounded Rectangle Tool (U) and draw the same button shape, but a bit smaller, so it fits right in the center of our main shape
2. Refer to step 19 (first screen shot in this step) and follow the exact instructions there. It’s basically the same process, but the Contract value should be around 12 pixels now.