Martin O'Neill watched his Sunderland side slip out of the Capital One Cup at the hands of local rivals Middlesbrough at the Stadium of Light.
Scott McDonald put the visitors in front late in the second half and the Black Cats were unable to come back.
Following the defeat O'Neill was forthright with his comments: "We're obviously disappointed. We didn't do well enough.
"We were unable to score a goal to give ourselves a chance in the game.
"We had an opportunity to get through to the quarter finals of the competition and we failed."
The loss is the Black Cats' first on home turf this term.
"During the course of the season you meet a number of tests and this is the first one." O'Neill continued.
"We have to pick ourselves up, which is easy to say, but we didn't play well enough and we didn't give our supporters enough to get enthused about.
"Middlesbrough came with a totally free spirit and enjoyed the game. If they won, great, if not it wouldn't have been make or break for their season.
"However, for us this was a big night and we've failed the test.
"I think you learn more about people in adversity. We need to get a grip of the situation and prepare ourselves for Saturday, it's a different competition and it's a big game for us."