| There were no startups in the USSR because no one was willing to put a large amount of effort into something that would eventually be owned by the government.

While this is correct, people were prohibited to start their own enterprises in the first place. Hence it's not the lack of profits that stopped the people - it's the fear of getting punished by the government.

In my humble opinion, Soviet Union did not prove that society needs self-profit motivation, not in terms of accumulating wealth. What it did prove is that the State will sooner or later collapse(because of the class war) when it threatens, oppresses and all the power is situated in the hands of a few people at the top.