A Level 1 outline entry is on the first line; the second line awaits another Level 1 entry.
To add your first entry, just type it at the insertion point.
You'll notice that the text is large and bold; it's a "heading." Word automatically formats it with a built-in style (Heading 1).
When one entry is complete, you press ENTER to move to the next line. Word starts a new paragraph at the same level of indentation (or, to think of it another way, the same level of importance in the overall document structure). You can continue this way until all of your top-level ideas are in place.