The Pacers were 98-80 victors in Cleveland as LeBron James was beaten in the first game of a first-round playoff for the first time in his career.
The Cavs never recovered from a poor start, having been 33-14 down at the end of the first quarter.
And Lue was not impressed by his side’s showing early on.
“I would say the desire was there but you can’t ease into the playoffs,” Lue said.
“They came in and they attacked us. They hit us first and we were never able to recover, but you can’t ease into the game.
“You have to be physical, mentally tough and mentally strong. They were aggressive from game one.”
The two meet again in Ohio on Wednesday for the second clash in the seven-match series.
The Cavaliers have won the Eastern Conference in each of the last three years and will need a response to continue that run.
Only once have they gone on to lift the NBA Championship, being victorious in 2016.
The loss in the first game though put an end to a couple of records for Cavs hero James.
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The superstar hadn’t lost a first-round game at all since 2012 with defeat against the Pacers his first loss at this stage in 21 matches.
You need to go back even longer since the King lost a first-round match at home, with the Washington Wizards the last to taste victory in Cleveland in April 2008.
