Open a new document in photoshop
Size should be 400 x 400 pixels
Color: white
Type some random text
Now add the following layer styles
This is the result
Be sure you have the text layer selected. then go to Select > Load selection (When a new window appear press OK )
Go to Select > Modify > Expand and use the following settings
This is the result
Now select the background layer, then press Ctrl+Shift+Alt+N
Then with this new layer selected go to Edit > Fill and use the following settings
Press on Ctrl+D to deselect
Then add the following layer styles on this button
This is the result
