Software start-ups should in particular note: If you're selling B2C and your target market is technically savvy, the folks who will pirate and distribute your work are considered heroes by many you've hoped to sell to.
The fact that it's my product is unfortunate, but ultimately, I have to compete with them. I can only do that if I can make it easier to deal with my company than with the Pirate Bay. (Which is exactly how iTunes and Spotify work, for instance. You can compete with free: you do it by being convenient, and by finding ways to add value where it wouldn't otherwise exist.)
I've downloaded quite a bit of stuff from various torrent sites, but you know what's funny? I've never downloaded anything that I could have purchased from the copyright holder instead. Whose fault is that?