Tandy enjoyed an autumn win against Japan, but was agonisingly close to a first statement victory of his reign.
Wales led at half-time for the first time since he has called the shots and were 20-5 and 23-12 in front in the second half.
“I am bitterly disappointed not to win the game, but have massive pride in the group,” said the former Scotland defence coach.
“That was a step in the right direction, but we’ve got to be better next time. There was a lot to like in the first half with how we attacked the game. That was excellent.”
After French fans took over Principality Stadium in round two, Tandy hailed the impact of the home backing in a crowd of 70,649.
“The support today was incredible,” he said. “There are lots of questions asked about the crowds, but they were unbelievable.
“Everyone felt it. The players gave them something to cheer about, but ultimately they got behind the team. It’s a snapshot of what we want to be.”
Back-row forward Taine Plumtree and fly-half Sam Costelow look unlikely to play again in the tournament.
The Scarlets pair will be sent for scan after injuries to their right shoulder and lower left leg respectively in the defeat.
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