diff --git a/components/project-creation-modal.tsx b/components/project-creation-modal.tsx
index 0d8a2d2..9b669a0 100644
--- a/components/project-creation-modal.tsx
+++ b/components/project-creation-modal.tsx
@@ -11,21 +11,33 @@ interface ProjectCreationModalProps {
   initialWorkspacePath?: string;
 }
 
+const PROJECT_TYPES = [
+  { id: 'web-app',     label: 'Web App',      icon: '⬡', desc: 'SaaS product users log into — dashboards, accounts, core features' },
+  { id: 'website',     label: 'Website',       icon: '◎', desc: 'Marketing site, landing page, or content-driven public site' },
+  { id: 'marketplace', label: 'Marketplace',   icon: '⇄', desc: 'Two-sided platform connecting buyers and sellers or providers' },
+  { id: 'mobile',      label: 'Mobile App',    icon: '▢', desc: 'iOS and Android app — touch-first, native feel' },
+  { id: 'internal',    label: 'Internal Tool', icon: '◫', desc: 'Admin panel, ops dashboard, or business process tool' },
+  { id: 'ai-product',  label: 'AI Product',    icon: '◈', desc: 'AI-native product — copilot, agent, or model-powered workflow' },
+];
+
 export function ProjectCreationModal({ open, onOpenChange, workspace }: ProjectCreationModalProps) {
   const router = useRouter();
+  const [step, setStep] = useState<1 | 2>(1);
   const [productName, setProductName] = useState('');
+  const [projectType, setProjectType] = useState<string | null>(null);
   const [loading, setLoading] = useState(false);
   const inputRef = useRef<HTMLInputElement>(null);
 
   useEffect(() => {
     if (open) {
+      setStep(1);
       setProductName('');
+      setProjectType(null);
       setLoading(false);
       setTimeout(() => inputRef.current?.focus(), 80);
     }
   }, [open]);
 
-  // Close on Escape
   useEffect(() => {
     if (!open) return;
     const handler = (e: KeyboardEvent) => { if (e.key === 'Escape') onOpenChange(false); };
@@ -34,18 +46,17 @@ export function ProjectCreationModal({ open, onOpenChange, workspace }: ProjectC
   }, [open, onOpenChange]);
 
   const handleCreate = async () => {
-    const name = productName.trim();
-    if (!name) return;
+    if (!productName.trim() || !projectType) return;
     setLoading(true);
     try {
       const res = await fetch('/api/projects/create', {
         method: 'POST',
         headers: { 'Content-Type': 'application/json' },
         body: JSON.stringify({
-          projectName: name,
-          projectType: 'scratch',
-          slug: name.toLowerCase().replace(/[^a-z0-9]+/g, '-'),
-          product: { name },
+          projectName: productName.trim(),
+          projectType,
+          slug: productName.toLowerCase().replace(/[^a-z0-9]+/g, '-'),
+          product: { name: productName.trim(), type: projectType },
         }),
       });
       if (!res.ok) {
@@ -84,39 +95,56 @@ export function ProjectCreationModal({ open, onOpenChange, workspace }: ProjectC
         padding: 24, pointerEvents: 'none',
       }}>
         <div
+          onClick={e => e.stopPropagation()}
           style={{
             background: '#fff', borderRadius: 14,
             boxShadow: '0 8px 40px rgba(26,26,26,0.14)',
-            padding: '36px 40px',
-            width: '100%', maxWidth: 480,
+            padding: '32px 36px',
+            width: '100%', maxWidth: step === 2 ? 560 : 460,
             fontFamily: 'Outfit, sans-serif',
             pointerEvents: 'all',
             animation: 'slideUp 0.18s cubic-bezier(0.4,0,0.2,1)',
+            transition: 'max-width 0.2s ease',
           }}
-          onClick={e => e.stopPropagation()}
         >
           <style>{`
-            @keyframes fadeIn { from { opacity: 0; } to { opacity: 1; } }
-            @keyframes slideUp { from { opacity: 0; transform: translateY(12px); } to { opacity: 1; transform: translateY(0); } }
+            @keyframes fadeIn { from { opacity:0; } to { opacity:1; } }
+            @keyframes slideUp { from { opacity:0; transform:translateY(12px); } to { opacity:1; transform:translateY(0); } }
+            @keyframes spin { to { transform:rotate(360deg); } }
           `}</style>
 
           {/* Header */}
-          <div style={{ display: 'flex', alignItems: 'flex-start', justifyContent: 'space-between', marginBottom: 28 }}>
-            <div>
-              <h2 style={{ fontFamily: 'Newsreader, serif', fontSize: '1.35rem', fontWeight: 400, color: '#1a1a1a', marginBottom: 4 }}>
-                New project
-              </h2>
-              <p style={{ fontSize: '0.8rem', color: '#a09a90' }}>
-                Give your project a name to get started.
-              </p>
+          <div style={{ display: 'flex', alignItems: 'flex-start', justifyContent: 'space-between', marginBottom: 24 }}>
+            <div style={{ display: 'flex', alignItems: 'center', gap: 10 }}>
+              {step === 2 && (
+                <button
+                  onClick={() => setStep(1)}
+                  style={{
+                    background: 'none', border: 'none', cursor: 'pointer',
+                    color: '#a09a90', fontSize: '1rem', padding: '2px 4px',
+                    borderRadius: 4, transition: 'color 0.12s', lineHeight: 1,
+                  }}
+                  onMouseEnter={e => (e.currentTarget.style.color = '#1a1a1a')}
+                  onMouseLeave={e => (e.currentTarget.style.color = '#a09a90')}
+                >
+                  ←
+                </button>
+              )}
+              <div>
+                <h2 style={{ fontFamily: 'Newsreader, serif', fontSize: '1.3rem', fontWeight: 400, color: '#1a1a1a', marginBottom: 2 }}>
+                  {step === 1 ? 'New project' : `What are you building?`}
+                </h2>
+                <p style={{ fontSize: '0.78rem', color: '#a09a90' }}>
+                  {step === 1 ? 'Give your project a name to get started.' : `Choose the type that best fits "${productName}".`}
+                </p>
+              </div>
             </div>
             <button
               onClick={() => onOpenChange(false)}
               style={{
                 background: 'none', border: 'none', cursor: 'pointer',
                 color: '#b5b0a6', fontSize: '1.1rem', lineHeight: 1,
-                padding: '2px 4px', borderRadius: 4,
-                transition: 'color 0.12s',
+                padding: '2px 4px', borderRadius: 4, transition: 'color 0.12s', flexShrink: 0,
               }}
               onMouseEnter={e => (e.currentTarget.style.color = '#6b6560')}
               onMouseLeave={e => (e.currentTarget.style.color = '#b5b0a6')}
@@ -125,59 +153,122 @@ export function ProjectCreationModal({ open, onOpenChange, workspace }: ProjectC
             </button>
           </div>
 
-          {/* Name input */}
-          <div style={{ marginBottom: 20 }}>
-            <label style={{ display: 'block', fontSize: '0.72rem', fontWeight: 600, color: '#6b6560', marginBottom: 7, letterSpacing: '0.02em' }}>
-              Project name
-            </label>
-            <input
-              ref={inputRef}
-              type="text"
-              value={productName}
-              onChange={e => setProductName(e.target.value)}
-              onKeyDown={e => { if (e.key === 'Enter' && productName.trim() && !loading) handleCreate(); }}
-              placeholder="e.g. Foxglove, Meridian, OpsAI…"
-              style={{
-                width: '100%', padding: '11px 14px',
-                borderRadius: 8, border: '1px solid #e0dcd4',
-                background: '#faf8f5', fontSize: '0.9rem',
-                fontFamily: 'Outfit, sans-serif', color: '#1a1a1a',
-                outline: 'none', transition: 'border-color 0.12s',
-                boxSizing: 'border-box',
-              }}
-              onFocus={e => (e.currentTarget.style.borderColor = '#1a1a1a')}
-              onBlur={e => (e.currentTarget.style.borderColor = '#e0dcd4')}
-            />
-          </div>
+          {/* Step 1 — Name */}
+          {step === 1 && (
+            <div>
+              <label style={{ display: 'block', fontSize: '0.72rem', fontWeight: 600, color: '#6b6560', marginBottom: 7, letterSpacing: '0.02em' }}>
+                Project name
+              </label>
+              <input
+                ref={inputRef}
+                type="text"
+                value={productName}
+                onChange={e => setProductName(e.target.value)}
+                onKeyDown={e => { if (e.key === 'Enter' && productName.trim()) setStep(2); }}
+                placeholder="e.g. Foxglove, Meridian, OpsAI…"
+                style={{
+                  width: '100%', padding: '11px 14px', marginBottom: 16,
+                  borderRadius: 8, border: '1px solid #e0dcd4',
+                  background: '#faf8f5', fontSize: '0.9rem',
+                  fontFamily: 'Outfit, sans-serif', color: '#1a1a1a',
+                  outline: 'none', transition: 'border-color 0.12s',
+                  boxSizing: 'border-box',
+                }}
+                onFocus={e => (e.currentTarget.style.borderColor = '#1a1a1a')}
+                onBlur={e => (e.currentTarget.style.borderColor = '#e0dcd4')}
+              />
+              <button
+                onClick={() => { if (productName.trim()) setStep(2); }}
+                disabled={!productName.trim()}
+                style={{
+                  width: '100%', padding: '12px',
+                  borderRadius: 8, border: 'none',
+                  background: productName.trim() ? '#1a1a1a' : '#e0dcd4',
+                  color: productName.trim() ? '#fff' : '#b5b0a6',
+                  fontSize: '0.88rem', fontWeight: 600,
+                  fontFamily: 'Outfit, sans-serif',
+                  cursor: productName.trim() ? 'pointer' : 'not-allowed',
+                  transition: 'opacity 0.15s, background 0.15s',
+                }}
+                onMouseEnter={e => { if (productName.trim()) (e.currentTarget.style.opacity = '0.85'); }}
+                onMouseLeave={e => { (e.currentTarget.style.opacity = '1'); }}
+              >
+                Next →
+              </button>
+            </div>
+          )}
 
-          {/* Create button */}
-          <button
-            onClick={handleCreate}
-            disabled={!productName.trim() || loading}
-            style={{
-              width: '100%', padding: '12px',
-              borderRadius: 8, border: 'none',
-              background: productName.trim() && !loading ? '#1a1a1a' : '#e0dcd4',
-              color: productName.trim() && !loading ? '#fff' : '#b5b0a6',
-              fontSize: '0.88rem', fontWeight: 600,
-              fontFamily: 'Outfit, sans-serif',
-              cursor: productName.trim() && !loading ? 'pointer' : 'not-allowed',
-              transition: 'opacity 0.15s, background 0.15s',
-              display: 'flex', alignItems: 'center', justifyContent: 'center', gap: 8,
-            }}
-            onMouseEnter={e => { if (productName.trim() && !loading) (e.currentTarget.style.opacity = '0.85'); }}
-            onMouseLeave={e => { (e.currentTarget.style.opacity = '1'); }}
-          >
-            {loading ? (
-              <>
-                <span style={{ width: 14, height: 14, borderRadius: '50%', border: '2px solid #fff4', borderTopColor: '#fff', animation: 'spin 0.7s linear infinite', display: 'inline-block' }} />
-                <style>{`@keyframes spin { to { transform: rotate(360deg); } }`}</style>
-                Creating…
-              </>
-            ) : (
-              'Next →'
-            )}
-          </button>
+          {/* Step 2 — Project type */}
+          {step === 2 && (
+            <div>
+              <div style={{ display: 'grid', gridTemplateColumns: '1fr 1fr', gap: 8, marginBottom: 20 }}>
+                {PROJECT_TYPES.map(type => {
+                  const isSelected = projectType === type.id;
+                  return (
+                    <button
+                      key={type.id}
+                      onClick={() => setProjectType(type.id)}
+                      style={{
+                        display: 'flex', alignItems: 'flex-start', gap: 12,
+                        padding: '14px 16px', borderRadius: 10, textAlign: 'left',
+                        border: `1px solid ${isSelected ? '#1a1a1a' : '#e8e4dc'}`,
+                        background: isSelected ? '#1a1a1a08' : '#fff',
+                        boxShadow: isSelected ? '0 0 0 1px #1a1a1a' : '0 1px 2px #1a1a1a04',
+                        cursor: 'pointer', transition: 'all 0.12s',
+                        fontFamily: 'Outfit, sans-serif',
+                      }}
+                      onMouseEnter={e => { if (!isSelected) (e.currentTarget.style.borderColor = '#d0ccc4'); }}
+                      onMouseLeave={e => { if (!isSelected) (e.currentTarget.style.borderColor = '#e8e4dc'); }}
+                    >
+                      <div style={{
+                        width: 30, height: 30, borderRadius: 7, flexShrink: 0,
+                        background: isSelected ? '#1a1a1a' : '#f6f4f0',
+                        display: 'flex', alignItems: 'center', justifyContent: 'center',
+                        fontSize: '0.95rem', color: isSelected ? '#fff' : '#8a8478',
+                      }}>
+                        {type.icon}
+                      </div>
+                      <div style={{ flex: 1, minWidth: 0 }}>
+                        <div style={{ fontSize: '0.84rem', fontWeight: 600, color: '#1a1a1a', marginBottom: 2 }}>
+                          {type.label}
+                        </div>
+                        <div style={{ fontSize: '0.71rem', color: '#8a8478', lineHeight: 1.45 }}>
+                          {type.desc}
+                        </div>
+                      </div>
+                    </button>
+                  );
+                })}
+              </div>
+
+              <button
+                onClick={handleCreate}
+                disabled={!projectType || loading}
+                style={{
+                  width: '100%', padding: '12px',
+                  borderRadius: 8, border: 'none',
+                  background: projectType && !loading ? '#1a1a1a' : '#e0dcd4',
+                  color: projectType && !loading ? '#fff' : '#b5b0a6',
+                  fontSize: '0.88rem', fontWeight: 600,
+                  fontFamily: 'Outfit, sans-serif',
+                  cursor: projectType && !loading ? 'pointer' : 'not-allowed',
+                  transition: 'opacity 0.15s, background 0.15s',
+                  display: 'flex', alignItems: 'center', justifyContent: 'center', gap: 8,
+                }}
+                onMouseEnter={e => { if (projectType && !loading) (e.currentTarget.style.opacity = '0.85'); }}
+                onMouseLeave={e => { (e.currentTarget.style.opacity = '1'); }}
+              >
+                {loading ? (
+                  <>
+                    <span style={{ width: 14, height: 14, borderRadius: '50%', border: '2px solid #fff4', borderTopColor: '#fff', animation: 'spin 0.7s linear infinite', display: 'inline-block' }} />
+                    Creating…
+                  </>
+                ) : (
+                  `Create ${productName} →`
+                )}
+              </button>
+            </div>
+          )}
         </div>
       </div>
     </>