How to do it...

1. On the VM host, mount Server 2016 installation ISO:

      $Server2016ISOPath = 'D:\iso\WinServer2016.iso'
      $MountResult = Mount-DiskImage -ImagePath $Server2016ISOPath `
                                     -PassThru
      $MountResult | Select-Object -Property *

1. Determine the drive letter(s) of mounted ISO(s), including the colon (:):

      $Server2016InstallationRoot = ($MountResult |
          Get-Volume |
              Select-object -ExpandProperty Driveletter) + ':'
      $Server2016InstallationRoot

1. Get the path of the NanoServerImageGenerator module within the server installation disk:

      $NanoServerFolder = `
          Join-Path -Path $Server2016InstallationRoot `
                    -ChildPath 'NanoServer'
      $NsigFolder = Join-Path -Path $NanoServerFolder `
                              -ChildPath 'NanoServerImageGenerator'

1. Review the contents of the NanoServerImageGenerator module folder:

      $NsigFolder
      Get-ChildItem -Path $NsigFolder -Recurse

1. Import the NanoServerImageGenerator module and review the commands it contains:

      Import-Module -Name $NanoServerImageGeneratorModuleFolder
      Get-Command -Module NanoServerImageGenerator

1. Designate the folder for the base Nano Server images:

      $NanoBaseFolder = 'C:\NanoBase'

1. Designate the folder for the VM images:

      $VMFolder = 'D:\VMs'

1. Define the Nano Server computer name and file paths for your Nano Server VM:

      $NanoComputerName = 'NANO1'
      $NanoVMFolder     = Join-Path -Path $VMFolder   
                                 -ChildPath $NanoComputerName
      $NanoVMPath       = Join-Path -Path $NanoVMFolder `
                                 -ChildPath "$NanoComputerName.vhdx"

1. Create a Nano Server VM image, as a guest VM within Hyper-V and prompt for the administrator password:

      New-NanoServerImage -DeploymentType Guest -Edition Datacenter 
                          -MediaPath  $Server2016InstallationRoot `
                          -BasePath   $NanoBaseFolder `
                          -TargetPath $NanoVMPath `
                          -ComputerName $NanoComputerName

1. Define a VM switch for your Nano Server:

      $SwitchName = Get-VMSwitch | 
        Select-Object -ExpandProperty Name -First 1

1. Create a new VM in Hyper-V using the Nano Server VM image:

      New-VM -VHDPath $NanoVMPath -Name $NanoComputerName `
          -Path $NanoVMFolder `
          -SwitchName $SwitchName `
          -Generation 2 -Verbose

1. Start your new Nano Server VM:

      Start-VM -Name $NanoComputerName -Verbose