The problem is actually with creating an icon in Ubuntu itself more than anything else. Solution from Julian is very close to the working icon solution however, the number of steps for the icon can be further reduced to only two steps (at least in Ubuntu 16.04.2).
1. Install gksudo: The reason you want to install this is because you will be turning off the terminal when you create the icon. This is a small graphical interface with a forced sudo backend (more on that later)
sudo apt-get install gksudo
2. create icon: open terminal and enter the following command
sudo gedit ~/.local/share/applications/matlab.desktop
a blank text editor will open up. In that editor paste the following set and save
Exec=gksudo -S "<matlab location>/matlab -desktop"
if you search for "MATLAB" now you will see an icon that can be dragged and dropped to the launcher (Ubuntu's equivilant for windows taskbar) or desktop.
the "<matlab location>" is a placeholder for where your matlab installation is stored. By default, it should be store in the /usr/local/MATLAB/.....
the "<icon location>" is a placeholder for where the matlab icon should be stored. It can be a .png,.ico or .xmp .
Comments on what is going on in the background:
1. The gksudo is running the sudo as its backend (https://linux.die.net/man/1/gksudo), if your linux box has a password, it will ask you for it when you click the icon you have created using the above instruction. Since we turned the terminal off (line 5) there will be no way for you to enter this password and matlab will keep crashing. gksudo provides a GUI interface that will allow the user to input his/her password.
2. matlab -desktop, forces matlab to run in desktop mode with the full matlab shell