Failure is almost inevitable in the innovation process. However, little is known about how individuals can innovate from failure. Drawing on the dual pathway to creativity model and the cognitive appraisal theories, this study proposes two pathways of innovating from failure: a cognitive flexibility pathway and a negative emotion pathway. Using a sample of 252 undergraduate students, this study found that the cognitive flexibility-innovating from failure link is fully mediated by learning from failure, and the negative emotion-innovating from failure link is moderated by self-compassion.