Use this as an opportunity to learn. I have at least four unambiguously failed projects under my belt, and every one of these taught me something important.
As explained in this fantastic answer,
Judgement comes not from success, but from failures. Most companies want to hire people that have had their failures paid for by previous companies, that is why they require
N+ years of experience, it implies they made all the basic, entry level mistakes already and someone else had to pay for them.
This judgement only comes with experience.
Edison invented the light bulb through experiencing failure, not through some raw in-experienced skill...
Even the most skilled don't achieve success without a proportional amount of failure. This is how good judgement is earned...
Explain above to your team members, help them find out how to apply acquired experience to improve in next project(s).
Set up a project postmortem / retrospective. Study how it went, what was done right and what could have been done better. Learn how to apply... oh wait, it is impossible to adequately cover in an answer such a topic without knowing specifics of your project.
For a starting point, refer Conducting a Project Postmortem article by Steve Pavlina:
The best time to conduct a postmortem is about two weeks after a product is released (or for certain products, after the project is cancelled). This allows you to regain your objectivity without forgetting the details. Your memories will still be fresh, and you'll have a good perspective to see the project as a whole rather than focusing too strongly on the most recent work...
Another useful reference is Scott Berkun essay, How to learn from your mistakes:
The learning from mistakes checklist
- Accepting responsibility makes learning possible.
- Don’t equate making mistakes with being a mistake.
- You can’t change mistakes, but you can choose how to respond to them.
- Growth starts when you can see room for improvement.
- Work to understand why it happened and what the factors were.
- What information could have avoided the mistake?
- What small mistakes, in sequence, contributed to the bigger mistake?
- Are there alternatives you should have considered but did not?
- What kinds of changes are required to avoid making this mistake again?What kinds of change are difficult for you?
- How do you think your behavior should/would change in you were in a similar situation again?
- Work to understand the mistake until you can make fun of it (or not want to kill others that make fun).
- Don’t over-compensate: the next situation won’t be the same as the last.