diff --git a/src/ClaudeDo.Installer/Steps/InitDatabaseStep.cs b/src/ClaudeDo.Installer/Steps/InitDatabaseStep.cs
index 007b36c..9c4ed98 100644
--- a/src/ClaudeDo.Installer/Steps/InitDatabaseStep.cs
+++ b/src/ClaudeDo.Installer/Steps/InitDatabaseStep.cs
@@ -1,3 +1,4 @@
+using System.IO;
 using ClaudeDo.Data;
 using ClaudeDo.Installer.Core;
 using Microsoft.EntityFrameworkCore;
@@ -15,6 +16,10 @@ public sealed class InitDatabaseStep : IInstallStep
             var expandedPath = Paths.Expand(ctx.DbPath);
             progress.Report($"Initializing database at {expandedPath}");
 
+            var parent = Path.GetDirectoryName(expandedPath);
+            if (!string.IsNullOrEmpty(parent))
+                Directory.CreateDirectory(parent);
+
             var options = new DbContextOptionsBuilder<ClaudeDoDbContext>()
                 .UseSqlite($"Data Source={expandedPath}")
                 .Options;
diff --git a/src/ClaudeDo.Installer/Steps/RegisterServiceStep.cs b/src/ClaudeDo.Installer/Steps/RegisterServiceStep.cs
index 70baa28..6710925 100644
--- a/src/ClaudeDo.Installer/Steps/RegisterServiceStep.cs
+++ b/src/ClaudeDo.Installer/Steps/RegisterServiceStep.cs
@@ -43,13 +43,21 @@ public sealed class RegisterServiceStep : IInstallStep
 
         // Create service
         var startType = ctx.AutoStart ? "auto" : "demand";
-        var createArgs = $"create {ServiceName} binPath= \"{workerExe}\" start= {startType}";
 
         if (ctx.ServiceAccount == "CurrentUser")
             return StepResult.Fail(
                 "Service cannot run as Current User without a password. " +
                 "Select 'Local System' or extend ServicePage to capture a password.");
 
+        var objArg = ctx.ServiceAccount switch
+        {
+            "LocalSystem" => " obj= LocalSystem",
+            "NetworkService" => " obj= \"NT AUTHORITY\\NetworkService\"",
+            "LocalService" => " obj= \"NT AUTHORITY\\LocalService\"",
+            _ => "",
+        };
+        var createArgs = $"create {ServiceName} binPath= \"{workerExe}\" start= {startType}{objArg}";
+
         progress.Report("Creating service...");
         var (exitCode, output) = await RunSc(createArgs, ctx, progress, ct);
         if (exitCode == 1072)
diff --git a/src/ClaudeDo.Installer/Steps/StartServiceStep.cs b/src/ClaudeDo.Installer/Steps/StartServiceStep.cs
index 0b97ce7..3f59ed6 100644
--- a/src/ClaudeDo.Installer/Steps/StartServiceStep.cs
+++ b/src/ClaudeDo.Installer/Steps/StartServiceStep.cs
@@ -13,15 +13,26 @@ public sealed class StartServiceStep : IInstallStep
         progress.Report($"Starting {ServiceName}...");
 
         var (exit, _) = await ProcessRunner.RunAsync("sc.exe", $"start {ServiceName}", null, progress, ct);
-        if (exit == 0) return StepResult.Ok();
+        // 1056 = ERROR_SERVICE_ALREADY_RUNNING — fine, fall through to the readiness poll.
+        if (exit != 0 && exit != 1056)
+            return StepResult.Fail($"sc.exe start failed with exit code {exit}");
 
-        // Exit 1056 = ERROR_SERVICE_ALREADY_RUNNING — that's fine too.
         if (exit == 1056)
-        {
             progress.Report("Service was already running.");
-            return StepResult.Ok();
+
+        // sc.exe start returns as soon as SCM accepts the command. Poll until the
+        // service actually reports RUNNING so downstream steps and SignalR clients
+        // don't race the worker's startup.
+        progress.Report("Waiting for service to reach RUNNING state...");
+        for (var i = 0; i < 30; i++)
+        {
+            ct.ThrowIfCancellationRequested();
+            var (q, output) = await ProcessRunner.RunAsync("sc.exe", $"query {ServiceName}", null, progress, ct);
+            if (q == 0 && output.Contains("RUNNING", StringComparison.OrdinalIgnoreCase))
+                return StepResult.Ok();
+            await Task.Delay(1000, ct);
         }
 
-        return StepResult.Fail($"sc.exe start failed with exit code {exit}");
+        return StepResult.Fail("Service did not reach RUNNING state within 30 seconds.");
     }
 }