Jurgen Klopp felt the positioning of Kevin De Bruyne and Ilkay Gundogan caused Liverpool problems in the Carabao Cup defeat to on Thursday.
City made an electric start at the Etihad and could have led inside 20 seconds, with Erling Haaland sending a chip over the bar. The Norwegian made no mistake on 10 minutes, converting a cross from De Bruyne.
Liverpool twice equalised against the Blues but goals from Riyad Mahrez and Nathan Ake eventually secured a quarter-final trip to Southampton for Pep Guardiola's side.
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Klopp admitted Mahrez's control and finish was "world-class" but felt his side could have defended all three goals better. But he felt City's fast start owed plenty to the way they set up and the combination play between the advanced midfielders and the wide players in Cole Palmer and Mahrez.
"A difficult start. First 15 minutes we had problems and City played much too often through our midfield," said Klopp.
"We all know City always have different ideas for different games and you always have to get used to it during the game, you never know exactly what will happen. And obviously the positioning of De Bruyne and Gundogan in combination with Palmer and Mahrez gave us some problems, on top of the problems [that] you have Erling Haaland in the centre, which you should not forget in all these movements.
"In these situations we were not compact enough, that’s why they could pass the ball through; that costs you confidence, conviction, stuff like this. But we found a way back in the game. We were 1-0 down, scored our goal, a wonderful goal. [We] had good football moments, before the goal already we caused them problems as well. So, 1-1 result, OK, half-time.
"The second half starts and I don’t know how many minutes were played and they scored the second goal. By the way, the first chance of Haaland at the start of the game, first half, was offside wasn’t it? Yes, it was. That gives the game a direction, that’s like the first situation, boom, oh my God, they are through. It was offside but nobody whistled, no flag up in all the build-up, it gives you a bad feeling, just to say that.
"But then the second half, the goal, they scored that. We should have defended all three goals much better. This one, not in the last moment because when Riyad takes the ball with the first touch it’s just world-class and I respect that a lot. But before, on the side, we should be in better positions, on the other side.
"Third goal especially, we are not switched on when they start their little routine, cross is coming in, we are not in the right positions, not enough players watched the ball early. These kinds of things. So there is obviously still a lot of space for improvement.
"But then we had our moments, we could have scored more goals, they had more chances. Spectacular game, I would say, for that early stage again. High-intensity. So there’s a lot to take from [the game] – the result obviously not and the goals we conceded not.
"But in between, yes, we played – I said it a couple of times – probably the best team in the world, they are unbelievable how they are and what they do, so it’s normal that you struggle in moments, so I accept that. That’s why, especially in the big difficulties I will not count too much now because we will not play every three days against Man City."
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