It seems you want to use the internet connection of your computer on android phone. Hotspot button actually does not create a hotspot in ubuntu instead creates an ad-hoc.
First of all as we all know stock rom of android i.e. the one which comes with the phone does not support ad-hoc mode (surprisingly), and even ice-cream sandwich (android 4.0) won't support ad-hoc mode. So, we need to create an access point (hotspot) using Ubuntu to which any android phone can easily connect. In windows you can use connectify to do that and it works perfectly well but with Ubuntu you may have certain problems, depending on whether your wifi-card supports access point mode (master mode) or not. Now, even if your wifi-card supports access point mode, the next problem is whether the driver of your wifi-card supports AP mode or not, if it does then the problem is solved and if does not then you have three options:
1- Wait till the driver recieves an update for AP mode. (many wifi-card drivers are still in staging stage)
2- Buy a wifi-dongle and make sure it supports AP mode on ubuntu.
3- Use windows, where connectify will do the job for you.
If you are interested you can post the name of your wifi-card driver so that i can help you further. command: lshw -c network