If you think of the Valley (or wherever you are) as a lottery then your chances of winning are about the same as those of a lottery. If you think of yourself as your personal VC then your odds approach those of a VC which while not great and moreover not diversified, they are much much better than a lottery.

How do you diversify as an employee/engineer? work for 10 startups at the same time?

You can't. That is what distinguishes you from a VC. Actually, you can. Serially. Plenty of people work for a startup through its early stage. A year here, a year there. That's diversification.

But how do you determine when it's time to jump ship? A year seems awfully short to make that determination.

If your object is diversification of your investment then one year isn't too short. However, typically your option vests monthly after the cliff. So you don't have to stay for two years unless you want to.

Bounce around until you find somewhere that has a rocketship trajectory? If you can work at 10 startups over a 20 year career, your odds aren't terrible

My point is that there are ways to manage risk as an employee, such as early exercising assuming you are joining an early stage startup where the cost is low enough.

I would've been screwed if I didn't early exercise.