diff --git a/core/protocol/ideWebview.ts b/core/protocol/ideWebview.ts
index e3c2e946c8..0a7dc19a74 100644
--- a/core/protocol/ideWebview.ts
+++ b/core/protocol/ideWebview.ts
@@ -1,4 +1,5 @@
 import { AiderState } from "../../extensions/vscode/src/integrations/aider/types/aiderTypes.js";
+import { ToolType } from "../../extensions/vscode/src/util/integrationUtils.js";
 import type { RangeInFileWithContents } from "../commands/util.js";
 import type { ContextSubmenuItem } from "../index.js";
 import { ToIdeFromWebviewOrCoreProtocol } from "./ide.js";
@@ -56,12 +57,13 @@ export type ToIdeFromWebviewProtocol = ToIdeFromWebviewOrCoreProtocol & {
   completeWelcome: [undefined, void];
   openInventory: [undefined, void];
   getUrlTitle: [string, string];
+  pearAIinstallation: [{tools: ToolType[], installExtensions: boolean}, void];
 };
 
 export type ToWebviewFromIdeProtocol = ToWebviewFromIdeOrCoreProtocol & {
   setInactive: [undefined, void];
   setActiveFilePath: [string | undefined, void];
-  resetInteractiveContinueTutorial: [undefined, void];
+  restFirstLaunchInGUI: [undefined, void];
   showInteractiveContinueTutorial: [undefined, void];
   submitMessage: [{ message: any }, void]; // any -> JSONContent from TipTap
   updateSubmenuItems: [
diff --git a/extensions/vscode/src/commands.ts b/extensions/vscode/src/commands.ts
index 8614004cc9..f4ab103ba8 100644
--- a/extensions/vscode/src/commands.ts
+++ b/extensions/vscode/src/commands.ts
@@ -252,11 +252,12 @@ const commandsMap: (
       await importUserSettingsFromVSCode();
     },
     "pearai.welcome.markNewOnboardingComplete": async () => {
-      // vscode.window.showInformationMessage("Marking onboarding complete.");
       await extensionContext.globalState.update(FIRST_LAUNCH_KEY, true);
+      await vscode.commands.executeCommand('pearai.unlockOverlay');
+      await vscode.commands.executeCommand('pearai.hideOverlay');
     },
-    "pearai.resetInteractiveContinueTutorial": async () => {
-      sidebar.webviewProtocol?.request("resetInteractiveContinueTutorial", undefined, [PEAR_CONTINUE_VIEW_ID]);
+    "pearai.restFirstLaunchInGUI": async () => {
+      sidebar.webviewProtocol?.request("restFirstLaunchInGUI", undefined, [PEAR_CONTINUE_VIEW_ID]);
     },
     "pearai.showInteractiveContinueTutorial": async () => {
       sidebar.webviewProtocol?.request("showInteractiveContinueTutorial", undefined, [PEAR_CONTINUE_VIEW_ID]);
@@ -386,7 +387,7 @@ const commandsMap: (
       await vscode.commands.executeCommand("pearai.showInteractiveContinueTutorial");
     },
     "pearai.developer.restFirstLaunch": async () => {
-      vscode.commands.executeCommand("pearai.resetInteractiveContinueTutorial");
+      vscode.commands.executeCommand("pearai.restFirstLaunchInGUI");
       extensionContext.globalState.update(FIRST_LAUNCH_KEY, false);
       vscode.window.showInformationMessage("Successfully reset PearAI first launch flag, RELOAD WINDOW TO SEE WELCOME PAGE", 'Reload Window')
         .then(selection => {
diff --git a/extensions/vscode/src/extension/VsCodeMessenger.ts b/extensions/vscode/src/extension/VsCodeMessenger.ts
index 8facd20991..b98437f7cd 100644
--- a/extensions/vscode/src/extension/VsCodeMessenger.ts
+++ b/extensions/vscode/src/extension/VsCodeMessenger.ts
@@ -28,6 +28,7 @@ import { getExtensionUri } from "../util/vscode";
 import { VsCodeWebviewProtocol } from "../webviewProtocol";
 import { attemptInstallExtension, attemptUninstallExtension, isVSCodeExtensionInstalled } from "../activation/activate";
 import { checkAiderInstallation } from "../integrations/aider/aiderUtil";
+import { TOOL_COMMANDS, ToolType } from "../util/integrationUtils";
 
 /**
  * A shared messenger class between Core and Webview
@@ -122,13 +123,6 @@ export class VsCodeMessenger {
     });
     this.onWebview("pearWelcomeOpenFolder", (msg) => {
       vscode.commands.executeCommand("workbench.action.files.openFolder");
-        // force close overlay if a folder is already open
-      if (vscode.workspace.workspaceFolders?.length) {
-        vscode.commands.executeCommand("pearai.unlockOverlay");
-        vscode.commands.executeCommand("pearai.hideOverlay");
-        // force reload to update overlay with new global state
-        vscode.commands.executeCommand("workbench.action.reloadWindow");
-      }
     });
     this.onWebview("pearInstallCommandLine", (msg) => {
       vscode.commands.executeCommand("workbench.action.installCommandLine");
@@ -168,11 +162,28 @@ export class VsCodeMessenger {
     this.onWebview("openInventory", (msg) => {
       vscode.commands.executeCommand("pearai.toggleInventoryHome");
     });
-    this.onWebview("completeWelcome", (msg) => {
+    this.onWebview("pearAIinstallation", (msg) => {
+      const { tools, installExtensions } = msg.data;
+      if (installExtensions) {
+        vscode.commands.executeCommand("pearai.welcome.importUserSettingsFromVSCode");
+      }
+
+      tools.forEach((tool: ToolType) => {
+        const toolCommand = TOOL_COMMANDS[tool];
+        if (toolCommand) {
+          if (toolCommand.args) {
+            vscode.commands.executeCommand(toolCommand.command, toolCommand.args);
+          } else {
+            vscode.commands.executeCommand(toolCommand.command);
+          }
+        } else {
+          console.warn(`Unknown tool: ${tool}`);
+        }
+      });
+    });
+    this.onWebview("closePearAIOverlay", (msg) => {
       vscode.commands.executeCommand("pearai.unlockOverlay");
       vscode.commands.executeCommand("pearai.hideOverlay");
-      // force reload to update overlay with new global state
-      vscode.commands.executeCommand("workbench.action.reloadWindow");
     });
     this.onWebview("highlightElement", (msg) => {
       vscode.commands.executeCommand("pearai.highlightElement", msg);
diff --git a/extensions/vscode/src/util/integrationUtils.ts b/extensions/vscode/src/util/integrationUtils.ts
index 74fad706a2..f2ea21b8fd 100644
--- a/extensions/vscode/src/util/integrationUtils.ts
+++ b/extensions/vscode/src/util/integrationUtils.ts
@@ -1,7 +1,30 @@
+/* eslint-disable @typescript-eslint/naming-convention */
 import * as vscode from "vscode";
 import { ContinueGUIWebviewViewProvider } from "../ContinueGUIWebviewViewProvider";
 import { ToWebviewProtocol } from "core/protocol";
 
+export enum InstallableTool {
+  AIDER = "aider",
+  SUPERMAVEN = "supermaven"
+}
+
+export interface ToolCommand {
+  command: string;
+  args?: any;
+}
+
+export type ToolType = typeof InstallableTool[keyof typeof InstallableTool];
+
+export const TOOL_COMMANDS: Record<ToolType, ToolCommand> = {
+  [InstallableTool.AIDER]: {
+    command: "pearai.installAider"
+  },
+  [InstallableTool.SUPERMAVEN]: {
+    command: "workbench.extensions.installExtension",
+    args: "supermaven.supermaven"
+  }
+};
+
 
 export function getIntegrationTab(webviewName: string) {
     const tabs = vscode.window.tabGroups.all.flatMap((tabGroup) => tabGroup.tabs);
diff --git a/gui/src/pages/gui.tsx b/gui/src/pages/gui.tsx
index 35d2cf8a6b..afe174e9fe 100644
--- a/gui/src/pages/gui.tsx
+++ b/gui/src/pages/gui.tsx
@@ -293,8 +293,10 @@ function GUI() {
     [loadMostRecentChat],
   );
 
-  useWebviewListener("resetInteractiveContinueTutorial", async () => {
+  useWebviewListener("restFirstLaunchInGUI", async () => {
     setLocalStorage("showTutorialCard", true);
+    localStorage.removeItem("onboardingSelectedTools");
+    localStorage.removeItem("importUserSettingsFromVSCode");
     dispatch(setShowInteractiveContinueTutorial(true));
   });
 
diff --git a/gui/src/pages/inventory.tsx b/gui/src/pages/inventory.tsx
index 3d2a4e9dec..d55dcc6ae9 100644
--- a/gui/src/pages/inventory.tsx
+++ b/gui/src/pages/inventory.tsx
@@ -108,7 +108,7 @@ export default function Inventory() {
               <TabsContent
                 key={id}
                 value={id}
-                className="max-h-full data-[state=active]:flex flex-col"
+                className="h-full data-[state=active]:flex flex-col"
               >
                 {component}
               </TabsContent>
diff --git a/gui/src/pages/welcome/FinalStep.tsx b/gui/src/pages/welcome/FinalStep.tsx
index b65c1d48ce..16d86c6168 100644
--- a/gui/src/pages/welcome/FinalStep.tsx
+++ b/gui/src/pages/welcome/FinalStep.tsx
@@ -6,22 +6,28 @@ import { IdeMessengerContext } from "@/context/IdeMessenger";
 import { FolderOpen } from "lucide-react";
 import { useNavigate } from "react-router-dom";
 
-export default function FinalStep({ onBack }: { onBack: () => void }) {
+export default function FinalStep({ onNext }: { onNext: () => void }) {
 
   const navigate = useNavigate();
+  const selectedTools = JSON.parse(localStorage.getItem('onboardingSelectedTools'));
+  const installExtensions = localStorage.getItem('importUserSettingsFromVSCode') === 'true';
 
   const handleOpenFolder = () => {
     ideMessenger.post("pearWelcomeOpenFolder", undefined);
+    ideMessenger.post("pearAIinstallation", {tools: selectedTools, installExtensions: installExtensions})
+    ideMessenger.post("markNewOnboardingComplete", undefined);
+    onNext() // navigates to inventory page
   };
 
   const handleClose = () => {
-    ideMessenger.post("completeWelcome", undefined);
+    ideMessenger.post("pearAIinstallation", {tools: selectedTools, installExtensions: installExtensions});
+    ideMessenger.post("markNewOnboardingComplete", undefined);
+    onNext() // navigates to inventory page
   };
 
   useEffect(() => {
     // unlock overlay when we get to last page
     ideMessenger.post("unlockOverlay", undefined);
-    ideMessenger.post("markNewOnboardingComplete", undefined);
     const handleKeyPress = (event: KeyboardEvent) => {
       if (event.key === 'Enter') {
         handleOpenFolder();
@@ -34,7 +40,6 @@ export default function FinalStep({ onBack }: { onBack: () => void }) {
   const ideMessenger = useContext(IdeMessengerContext);
   return (
     <div className="flex w-full overflow-hidden text-foreground">
-
     <div className="w-[35%] min-w-[320px] max-w-[420px] flex flex-col h-screen">
       <div className="flex-1 overflow-y-auto">
         <div className="p-6 space-y-6 pt-8">
diff --git a/gui/src/pages/welcome/SetupPage.tsx b/gui/src/pages/welcome/SetupPage.tsx
index e11ce960e5..28ecc0fb9b 100644
--- a/gui/src/pages/welcome/SetupPage.tsx
+++ b/gui/src/pages/welcome/SetupPage.tsx
@@ -45,10 +45,11 @@ export default function SetupPage({ onNext }: { onNext: () => void }) {
 
   const allSetupSteps = [
     {
-      icon: <User className="h-6 w-6" />,
-      title: "Sign in",
-      description: "Have PearAI work for free out of the box by signing in.",
-      component: <SignIn onNext={handleNextClick} />,
+      icon: <Move className="h-5 w-5" />,
+      title: "Import VSCode Extensions",
+      description:
+        "Automatically import your extensions from VSCode to feel at home.",
+      component: <ImportExtensions onNext={handleNextClick} />,
     },
     {
       icon: <Terminal className="h-6 w-6" />,
@@ -63,15 +64,12 @@ export default function SetupPage({ onNext }: { onNext: () => void }) {
       description: "Install recommended tools to enhance your PearAI experience.",
       component: <InstallTools onNext={handleNextClick} />,
     },
-    // devnote: keep import extensions as last step.
-    // because if user has lots of extensions, it can take a while to activate them all 
-    // which makes extension host unresponsive and it makes the UI feel more laggy.
+
     {
-      icon: <Move className="h-5 w-5" />,
-      title: "Import VSCode Extensions",
-      description:
-        "Automatically import your extensions from VSCode to feel at home.",
-      component: <ImportExtensions onNext={handleNextClick} />,
+      icon: <User className="h-6 w-6" />,
+      title: "Sign in",
+      description: "Have PearAI work for free out of the box by signing in.",
+      component: <SignIn onNext={handleNextClick} />,
     },
   ];
 
diff --git a/gui/src/pages/welcome/setup/ImportExtensions.tsx b/gui/src/pages/welcome/setup/ImportExtensions.tsx
index 8167c1a834..8273d80b53 100644
--- a/gui/src/pages/welcome/setup/ImportExtensions.tsx
+++ b/gui/src/pages/welcome/setup/ImportExtensions.tsx
@@ -14,15 +14,21 @@ export default function ImportExtensions({
 }: {
   onNext: () => void;
 }) {
-  const ideMessenger = useContext(IdeMessengerContext);
   const [isImporting, setIsImporting] = useState(false);
 
   const handleImport = () => {
+    localStorage.setItem('importUserSettingsFromVSCode', 'true');
     setIsImporting(true);
-    ideMessenger.post("importUserSettingsFromVSCode", undefined);
+    onNext();
   };
 
+  const handleSkip = () => {
+    localStorage.setItem('importUserSettingsFromVSCode', 'false');
+    onNext()
+  }
+
   useEffect(() => {
+    setIsImporting(localStorage.getItem('importUserSettingsFromVSCode') === 'true')
     const handleKeyPress = (event: KeyboardEvent) => {
       if (event.key === 'Enter' && !isImporting) {
         handleImport();
@@ -51,7 +57,7 @@ export default function ImportExtensions({
 
             {!isImporting ? 
           <div className="absolute bottom-8 right-8 flex items-center gap-4">
-              <div onClick={onNext} className="flex items-center gap-2 cursor-pointer">
+              <div onClick={handleSkip} className="flex items-center gap-2 cursor-pointer">
                 <span className="text-center w-full">Skip</span>
               </div>
               <Button
diff --git a/gui/src/pages/welcome/setup/InstallTools.tsx b/gui/src/pages/welcome/setup/InstallTools.tsx
index a54178cfc5..2aa259c461 100644
--- a/gui/src/pages/welcome/setup/InstallTools.tsx
+++ b/gui/src/pages/welcome/setup/InstallTools.tsx
@@ -11,7 +11,6 @@ interface Tool {
     name: string;
     description: string;
     icon: JSX.Element | string;
-    installCommand: () => Promise<void>;
     preInstalled: boolean;
 }
 
@@ -22,21 +21,12 @@ export default function InstallTools({
     onNext: () => void;
 }) {
 
-    const handleVSCExtensionInstall = async (extensionId: string) => {
-        ideMessenger.post("installVscodeExtension", { extensionId });
-    };
-
-    const handleAiderInstall = async () => {
-        ideMessenger.post("installAider", undefined);
-    };
-
     const tools: Tool[] = [
         {
             id: "aider",
             name: "PearAI Creator",
             description: "PearAI Creator is a no-code tool powered by aider* that let's you build complete features with just a prompt.",
             icon: "inventory-creator.svg",
-            installCommand: handleAiderInstall,
             preInstalled: false
         },
         {
@@ -44,15 +34,12 @@ export default function InstallTools({
             name: "PearAI Predict",
             description: "PearAI Predict is our upcoming code autocomplete tool. While it’s under development, we recommend using Supermaven* as a standalone extension within PearAI for code autocompletion. Selecting this option will install Supermaven.",
             icon: "inventory-autocomplete.svg",
-            installCommand: () => handleVSCExtensionInstall("supermaven.supermaven"),
             preInstalled: false
         }
     ];
 
-    const ideMessenger = useContext(IdeMessengerContext);
-    const [isInstallingAll, setIsInstallingAll] = useState(false);
     const [attemptedInstalls, setAttemptedInstalls] = useState<string[]>(() => {
-        const saved = localStorage.getItem('onboardingAttemptedInstalls');
+        const saved = localStorage.getItem('onboardingSelectedTools');
         return saved ? JSON.parse(saved) : [];
     });
 
@@ -64,46 +51,17 @@ export default function InstallTools({
         return initialState;
     });
 
-
-
-    const handleInstallAll = async () => {
-        setIsInstallingAll(true);
-
-        const toolsToInstall = tools.filter(tool => !attemptedInstalls.includes(tool.id));
-        toolsToInstall.forEach(tool => tool.installCommand());
-
-        // Save to attempted installations
-        const newAttemptedInstalls = [...new Set([...attemptedInstalls, ...toolsToInstall.map(t => t.id)])];
-        localStorage.setItem('onboardingAttemptedInstalls', JSON.stringify(newAttemptedInstalls));
-        setAttemptedInstalls(newAttemptedInstalls);
-
-        setTimeout(() => {
-            setIsInstallingAll(false);
-            onNext();
-        }, 3000);
-    };
-
     const handleCheckboxChange = (toolId: string) => {
         setCheckedTools(prev => ({ ...prev, [toolId]: !prev[toolId] }));
     };
 
     const handleInstallChecked = async () => {
-        setIsInstallingAll(true);
-
         const selectedTools = tools.filter(tool =>
-            checkedTools[tool.id] && !attemptedInstalls.includes(tool.id)
+            checkedTools[tool.id]
         );
-        selectedTools.forEach(tool => tool.installCommand());
-
-        // Save to attempted installations
-        const newAttemptedInstalls = [...new Set([...attemptedInstalls, ...selectedTools.map(t => t.id)])];
-        localStorage.setItem('onboardingAttemptedInstalls', JSON.stringify(newAttemptedInstalls));
-        setAttemptedInstalls(newAttemptedInstalls);
 
-        setTimeout(() => {
-            setIsInstallingAll(false);
-            onNext();
-        }, 3000);
+        localStorage.setItem('onboardingSelectedTools', JSON.stringify(selectedTools.map(t => t.id)));
+        onNext()
     };
 
     const areAllToolsSelected = () => {
@@ -119,19 +77,22 @@ export default function InstallTools({
     };
 
     const getButtonText = () => {
-        if (areAllToolsAttempted()) {
-            return "All Tools Setup Initiated";
+        if (areAllToolsAttempted() || !areAnyToolsSelected()) {
+            return "Next"
+        }
+        if (areAllToolsSelected() && attemptedInstalls?.length > 0) {
+            return "Install Selected Tool";
         }
-        if (!areAnyToolsSelected()) {
-            return "None Selected";
+        if (attemptedInstalls?.length > 0) {
+            return "Next";
         }
         return areAllToolsSelected() ? "Install All Tools" : "Install Selected Tools";
     };
 
     useEffect(() => {
         const handleKeyPress = (event: KeyboardEvent) => {
-            if (event.key === 'Enter' && !isInstallingAll) {
-                handleInstallAll();
+            if (event.key === 'Enter') {
+                handleInstallChecked();
             } else if ((event.metaKey || event.ctrlKey) && event.key === 'ArrowRight') {
                 event.preventDefault();
                 onNext();
@@ -140,7 +101,7 @@ export default function InstallTools({
 
         window.addEventListener('keydown', handleKeyPress);
         return () => window.removeEventListener('keydown', handleKeyPress);
-    }, [isInstallingAll]);
+    }, []);
 
     return (
         <div className="step-content flex w-full h-screen items-center justify-center bg-background text-foreground">
@@ -195,9 +156,8 @@ export default function InstallTools({
                     Skip
                 </div>
                 <Button
-              className="w-[250px] text-button-foreground bg-button hover:bg-button-hover p-4 lg:py-6 lg:px-2 text-sm md:text-base cursor-pointer"
-              onClick={handleInstallChecked}
-                    disabled={isInstallingAll || !areAnyToolsSelected() || areAllToolsAttempted()}
+                    className="w-[250px] text-button-foreground bg-button hover:bg-button-hover p-4 lg:py-6 lg:px-2 text-sm md:text-base cursor-pointer"
+                    onClick={handleInstallChecked}
                 >
                     {getButtonText()}
                 </Button>
diff --git a/gui/src/pages/welcome/setup/SignIn.tsx b/gui/src/pages/welcome/setup/SignIn.tsx
index d776388348..13b0ecb6cb 100644
--- a/gui/src/pages/welcome/setup/SignIn.tsx
+++ b/gui/src/pages/welcome/setup/SignIn.tsx
@@ -39,7 +39,6 @@ export default function SignIn({
       } else if ((event.metaKey || event.ctrlKey) && event.key === 'ArrowRight') {
         // Ctrl/Cmd + ArrowRight for Skip
         event.preventDefault();
-        ideMessenger.post("markNewOnboardingComplete", undefined);
         onNext();
       }
     };
@@ -64,7 +63,6 @@ export default function SignIn({
           <div className="absolute bottom-8 right-8 flex items-center gap-4">
           <div
             onClick={() => {
-              ideMessenger.post("markNewOnboardingComplete", undefined);
               onNext();
             }}
             className="flex items-center gap-2 cursor-pointer"
diff --git a/gui/src/pages/welcome/welcomeGui.tsx b/gui/src/pages/welcome/welcomeGui.tsx
index b6c153841b..724914dd4f 100644
--- a/gui/src/pages/welcome/welcomeGui.tsx
+++ b/gui/src/pages/welcome/welcomeGui.tsx
@@ -4,6 +4,7 @@ import FinalStep from "./FinalStep";
 import SetupPage from "./SetupPage";
 import { IdeMessengerContext } from "@/context/IdeMessenger";
 import { WelcomeHeader } from "./WelcomeHeader";
+import InventoryPage from "@/inventory/pages/InventoryPage";
 
 export default function Welcome() {
   const ideMessenger = useContext(IdeMessengerContext);
@@ -44,8 +45,7 @@ export default function Welcome() {
   }, [ideMessenger]); // Dependency array ensures this runs once when the component mounts
 
   const handleNextStep = () => {
-    setStep((prevStep) => Math.min(prevStep + 1, 2));
-    console.dir(`step: ${step}`);
+    setStep((prevStep) => Math.min(prevStep + 1, 3));
   };
 
   const handleBackStep = () => {
@@ -59,7 +59,9 @@ export default function Welcome() {
       case 1:
           return <SetupPage onNext={handleNextStep} />;
       case 2:
-        return <FinalStep onBack={handleBackStep} />;
+        return <FinalStep onNext={handleNextStep} />;
+      case 3:
+        return <InventoryPage />;
       default:
         return null;
     }