Xavi said Barcelona have to face up to "reality" after their disappointing Champions League campaign was ended in the group stage for a second successive season on Wednesday.
Barcelona were already eliminated from Group C before a ball had been kicked against Bayern Munich at Camp Nou, following Inter Milan's 4-0 win over Viktoria Plzen earlier in the evening.
Despite the circumstances, it was still a poor performance from Barca, who fell to a 3-0 defeat to Bayern after goals from Sadio Mane, Eric Choupo-Moting, and Benjamin Pavard.
It means for a second straight year, the Catalans have dropped into the Europa League, although this season's campaign will feel a greater disappointment than 12 months ago.
Xavi, appointed last November, inherited a mess from predecessor Ronald Koeman as Barcelona contended with spiralling financial problems which resulted in the departure of several key players, including Lionel Messi.
This year, though, Barcelona entered the competition with high hopes following a summer that saw seven new arrivals - including the likes of Robert Lewandowski and Raphinha - and more than €150 million spent, while their early domestic form suggested a deep Champions League run might be possible.
"This is our reality and we have to face it. Maybe that's what we needed, to be given a beating in order to grow," Xavi said.
"Today it was already over, too late to do anything. The main reason that we got to this situation was because of our own mistakes in the previous games, we failed to be effective up front.
"We go out with a really bad feeling but we need to reset and reconnect to fight for the other trophies left."
Barcelona v Bayern player ratings
Barca began encouragingly with a 5-1 opening-round win over Viktoria Plzen but successive defeats at Bayern and Inter left them playing catch-up, before the 3-3 draw at home against Inter left their hopes hanging by a thread.
The Champions League setback also comes after Barca surrendered top spot in La Liga following the 3-1 defeat at Real Madrid in the clasico, but Xavi has urged his team to quickly regroup and focus on the rest of the season.
"That game against Inter was the one that hit me the hardest, that was when we lost control of our own fate and I thought it was really cruel for our team," he said.
"But we need to stick together, our fans were great tonight, it was great to see more than 85,000 at Camp Nou supporting us till the end. Bad thing we didn't show up on the pitch.
"There are still other tournaments to play. It's a hard blow but we need to be self critical to be able to win those titles."