The Saddlers conceded twice inside the opening 12 minutes at Holker Street as Tyrell Warren and Sam McClelland took advantage of slack defending at corners to give the hosts a commanding lead.
Danny Johnson pulled one back early in the second half but an equaliser never looked likely as Walsall slid to their first defeat of the season.
Flynn said: "The first half we were nowhere near it. We conceded two set plays, were outmuscled and outpressed.
"We kicked the ball too long playing with the wind. The first half it looked like we were still on the bus. It wasn't good enough."
Goalkeeper Owen Evans kept the Saddlers in the match with some impressive saves, denying former Walsall striker Josh Gordon in the second half.
Peter Clarke then nearly snatched a point at the death when he shot inches with the last kick of the match.
Flynn added: "What I will say is at least they showed some character in the second half and kept pushing.
"They had chances as well. We know that. It was down our misplaced passes or switching off.
"We need to be better in the final third. We didn't hit the target enough or put the keeper under pressure enough. The first 12 minutes killed us."