I'd like to know which options I have or which routes you went in order to get some data about how well an idea "can" do in the real world. How can I do market research/analysis myself? Should I bring in somebody else to do it?
I am a tech person. The only option that comes to my mind is to build the "product", go live and hope for the best. However, if I want to raise some money, investors probably need/want data about the market.
Building a product before ever determining if there is a demand for said product could end up being a huge waste of time and money. I can almost guarantee that nobody will give you money if you haven't spent a second figuring out who could potentially be interested in the product.
Who would be interested in it?
Who would actually utilize it?
Would they be willing to pay for it?
You have to get out there and talk to people. Are there similar products on the market that you could study for more information?
I'm not an expert by any means but I feel like these are the basic first questions you should be asking yourself before doing anything.
Like tbowman said, you need to go through the customer discovery phase and build up a solid amount of feedback from your target market. Read the Lean Startup and any of Steve Blank's customer development books / essays. Check out Ash Maurya's Lean Canvas as well - those 3 resources will give you a roadmap to follow.
If you've talked to 20 - 30 people and they are giving you really good feedback already, that's great because it sounds like you're on the right path. 20 - 30 is not really enough to be truly representative though, so you should aim to interview around 200 people from your target market, which can be quite a daunting process.
There are platforms like Instant.ly that will gather large amounts of data from a target market for you (although it's quite expensive). I recently saw a great interview with the founder of LikeBright, he used mTurk to set up phone interviews with his target market, although obviously if you have a niche product mTurk doesn't really allow you to drill down to a specific TM.
So yeah, aim for 200 people from your target market, and be prepared to pay for it, or spend time setting up interviews yourself. Good feedback from a large number of your TM will put you in a good position to approach an incubator or seed investor (oh yeah, check out Angel List as well:)