You only have to have the buttons pressed when you insert the cable, then release at your leisure.
The stick will be recognized by the update software at this point and the firmware update can start when you click on start.
Have you checked that you definitely have the latest revision from Brook's site? Just trying to rule out any errors.
ykd, when doing an update to my UFB, I didn't use a small USB cable or anything just the regular cable I use to plug my stick into the PS4.
Hold PS + Share as you connect it to your PC and it should all be good.
I'm sure you've already done this but I just wanted to make sure.