Right, there's a simplifying assumption of fungibility in my post. In your counter example, you go to the other extreme, where its either a successful but low-social-utility business, or an unsuccessful high-social-utility one.
In reality, the entrepreneur is going to have to make some tradeoff between likelihood of success (given motivation) and utility of success.
But entrepreneurs intuitively make these sort of tradeoffs all the time. This is just another judgement to make.
