Sinisa Mihajlovic was proud of his Milan side's performance despite their derby defeat to Inter on Sunday.
Fredy Guarin's second-half strike gave the Nerazzurri the win, though Luiz Adriano spurned two clear-cut chances early in the first half and Mario Balotelli rattled the post in the second.
Mihajlovic was frustrated with the result but is confident that Milan are showing encouraging signs, despite having lost twice in their opening three Serie A matches.
"We played badly against Empoli but better tonight," he said to Sky Sport.
"It's a shame we lost, but I cannot complain about the performance. Tonight, I found my team again. I can be happy when we lose and unhappy when we win, because if we keep playing like this then we'll be successful.
"The only thing I'm unhappy with is the result. We took the initiative. We could've done better in the goal situation, but we also have to give credit to Inter and Guarin for scoring a great goal."
Balotelli proved a real handful to the Inter defence after replacing the ineffective Carlos Bacca and Mihajalovic has urged the Italy striker to make the most of his loan spell back at San Siro.
"Bacca didn't keep the ball as well and was not his usual self, so I opted to make this change," added the former Sampdoria boss.
"Balotelli came on, we can't judge him after one game. He is training well and behaving well, he knows what he has to do and must make the most of the chances he is given."
