Hi. I'm researching sensor startups business models and was wondering how to validate a new sensor idea. I believe the founder(s) would first work on a proof of concept (e.g. make one sensor prototype, see if works/measures). Then, a second step would be to research fabrication methods and costs (using present tech, for instance, micromachining). However, what if the sensor works and can be manufactured but fails to solve a problem worth-solving? Or what if it does but not in a profitable way? Any comment, opinion, and advice is welcome.
This is fundamental product development research. It is completely unimportant what the device is that you intend to manufacture. What is MOST important is that you have a product-market fit. The steps are to start with a marketing strategy. This will lead you to do extensive research, to test your assumptions, and to validate the options. Marketing strategy should drive product development, because as you noted, if you develop something people don't want, then it was a completely wasted effort.
Ideas are unimportant until they have been tested. Manufacturing is a completely separate issue and you can begin researching the steps involved in mass production once you have determined that your invention is a product that will sell.