No one seems to have much idea what their business model could be.

It's not such a mystery, really. One of their investors, Reid Hoffman (LinkedIn co-founder, sits on Blockstream's board of directors) laid it out pretty clearly:

> In this instance, the first objective is to increase the public good by strengthening the overall openness and functionality of the Bitcoin ecosystem through “sidechains” technology. Delivering returns to investors is an objective as well – but it’s a secondary objective. ...

> And that’s why I’m participating in this first-round financing as an individual investor, and why Blockstream itself will function similarly to the Mozilla Corporation. Here, our first interest is maintaining and enhancing Bitcoin’s strong open ecosystem. And the structure we’ve chosen will give us the freedom and flexibility to prioritize public good over returns to investors.

> Over time, I believe this ecosystem-first approach will ultimately create massive economic value – for everyone in the Bitcoin universe, including individual users, businesses of all types, developers, entrepreneurs, and investors.

https://www.linkedin.com/pulse/20141117154558-1213-the-futur...

    quite involved with bitcoin core development

There's a common misconception that Blockstream showed up and started hiring bitcoin developers. That is not the case: Blockstream was founded by developers that contributed to bitcoin for many years before starting a company together.