Oh, that time display! So confusing, right? Here's the low-down.
When you close the lid, press Pressure Cook (or Manual) and set the desired cook time, the Instant pot will look like it's not doing anything. It's easy to think you've missed a step or need to do something else. Nope. It just pauses for 10 seconds or so in case you want to adjust the time. Then it will beep and the display will say “On”. It will stay like that while it builds up pressure, which can take from 3-25 minutes, depending on how much liquid you have in there. One cup of hot water might only take 3 or 4 minutes. A gallon of chili or soup may take 20 minutes or so.
Important: 00:02 means 2 minutes, not 2 seconds. If you set the time for 02:00, it will cook for 2 hours, not 2 minutes.
Once the Instant Pot reaches pressure, “On” will disappear and the display will start counting down the cook time. When it's finished, it will beep ten times and the display time will begin counting UP. That way, you can see how long ago the cook cycle ended. It also indicates how long it has been naturally releasing pressure so if you're busy chasing rabbits out of your garden or decorating cream puffs or something, you can easily see how long your Instant Pot has been naturally releasing pressure on Keep Warm.
Do not press the “TIMER” button for general use. "Timer" is for programming the IP to cook later. Kind of like setting a coffee maker for the next morning or using Time Bake on an oven. Just press Pressure Cook (or Manual) and use the + and – buttons to program the number of minutes.