HT1175 I would like to set up my first time capsule to back up in an external HD

I hit the Time machine icon, then a windows pop up,
the window shows the button to turn it on, I click and a airtime capsule came over I click on that,
Then another windows appeared that will connect to a "Station" ? what is this ?
I left on overnight but nothing happened.
I would like to make a back to an external HD, but I can't because I need to create this airtime capsule"
I have OS Lion 10.7.5 but I would like to upgrade my OS to the latest system Maverick.
I don't want to loose anything so I would like to make a back.
Please help me out to find the solution.
Thanks

Any idea how to capture my original password
See this User Tip by forum expert Tesserax:
                 AirPort - Regain Access from Forgotten Passwords
If that does not work, then you can always perform a "Soft Reset" by pushing the reset button on the Time Capsule for 1 second, then release. When you do this, you now have 5 minutes of free access to go into AirPort Utility and change all the passwords without affecting the network settings.

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