Is this the wrong way to go about creating a startup

I'm tech side; he's business side.

We're about 3-4 months in, and he works full time (closer to 50 hours a week) at another job. I'm a full-time student.

I asked my business partner when he was going to cut back hours from work to work more heavily, in-tuned with this business and he said "when we're making 20-30k of sales per month".

He told me upfront in the beginning he had plenty of time for this business. Just a few weeks ago he told me he'll have 8-12 hours per week. These last few weeks he's put at top 5 hours during the week... most likely even less.

What are the best ways of resolving this if he doesn't seem like he wants to let go of his job, or cut back on any hours at all? Are there any other options, or should I just write this off as a failure because my business partner clearly doesn't want to invest more time into (his original idea)?

This is a classic. Business person has a day job and will frankly not do much until the new business brings enough money to provide a similar salary. Guess what? It will never happen. It's a chicken and eggs problem: with no one working the sales/business angle, no money will come in. No money, no work done.

It's time to make a decision for you: why did you connect with that business person in the first place? Legally, I believe you own the code and pretty much the whole product. So in theory, you could kick him out. I'm not saying that's the right thing to do. But you need to ask yourself seriously what value this "partner" brings, and if the answer is none, draw your own conclusions.

On the other hand, business skils are critical for a company. Would you be able to pick them up? Many engineers completely underestimate how hard sales is.

No hard feelings. This is business.

Out of respect that it was your friends idea in the first place you should confront him with the issue and make a legal binding agreement that he is walking away and you are moving forward with the idea. You should learn from the experience of Zuckerberg and the movie the social network.
I also will disagree that there are plenty of great business leaders. I see start-ups that have horrible leaders and have worked for horrible sales managers. It is a true talent to be an inspirational leader and it is just as important as knowing how to code if not more...So choose your next partner wisely.

I have gone through your issues with interest. This is a typical situation being faced by many. Sometime technical partner fails and sometime marketing partner fails.

With a plain reading, I do not feel you have any case. Email can proof the intentions but probably is not legally binding.

Even if it is binding, and the marketing guys fails to bring the required number of customers, what options you have ? Probably you will have to marketing cost with no result from a person who is not dedicated.

You have to evaluate your alternatives and one could be let the new person come in. and keep the right to product or services with you and gave the new company a marketing right even at a nominal royalty.

You can also think about other alternative. Since the product or services is not clarified, it is not possible to think further in terms of exactly possible work around.

Are you incorporated? Do you have a formal shareholder agreement? If not, you can take the IP you developed, walk away and find someone more willing and able. It is nasty, but you are in a bind and have to take drastic action.

If there is a shareholder agreement, it might be trickier, but most likely you still can walk away with IP.

You will have to talk to a lawyer about this scenario, with more concrete details, but as a rule of thumb, since he did not contribute much, he does not own much and cannot claim any damages (as none have occurred). It is possible that even a threat to walk away will be enough to motivate your partner.