When you generate the game, you have to create a SM race instead the default player race. There is a box in the generation window which does this. After the game has been created you want to switch to SM-mode and generate a Sol-System (unless you don't want Sol, of course).
Then you have to go into system-view(F9) and click the create empire button you have already found. It must be a planet with either oxygen or methane. I think you could first create a colony with SM-race on the planet and change the atmosphere so it suits your needs. When creating the empire watch out to create a new race, too, except you have multiple human colonies fighting each other.
On the race overview window (the alien head) you can also change the species conditions later, if needed(give the a greater temperature range, set their temp midpoint, ...).
I hope I could help.
