That's absolutely right. The problem can be mitigated by focusing on specific roles and locations, though. You don't need that many candidates if your client only hires SWEs in SF. Our approach is to capture a maximum number of companies per vertical before expanding.
The cold start problem is really tough. Overcoming it will require things that are orthogonal to site design and business model design.
Actively and cleverly priming the pump on one side or both.